Education is Most Valuable when you Do Something with it

I remember many years ago, when I first started investing, meeting different people at various investment seminars that I went to. I was just beginning and wanted to hear more about different investment philosophies. But I had a purpose for learning, I really wanted to do something with the knowledge I was gaining.

Then when I began working with Bill Zheng here at Investors Direct, I particularly noticed one gentleman who would turn up to hear Bill speak again and again, then each time he would seek out a consultant to discuss in general terms what was possible for him.

On a number of occasions I managed to sit down with him and talk about his situation. Overall he was the perfect candidate to start benefitting from property investing. He had good surplus income, good equity in an existing property and he was definitely in a position to do something. But the result was always the same. He would decide not to do anything.

He always had many reasons NOT to buy. “The market is at its peak now I’ll wait!” “The market is bottoming out, I’ll give it a few months.”  “The latest hotspot is going cold now!” “I think rents are dropping.” “Commercial is better than residential right now!” “Oh residential is definitely outperforming commercial!” “The economy is slowing….  no wait, the economy is overheating now I think…”

You get the picture. He had so much information and statistics he could “prove” whatever he said was true.

The problem was “over-education”. He would  source so much information in order to ensure he was fully “educated” on the current posiition of the market that he was blind to what he was doing. He wanted to buy the perfect property, the one that would be just “right”. Trouble was he found so much information that he couldn’t interpret the data to support a single purpose.

Many ways to make money in property

You see, there are many ways to make money in property. You don’t have to do them all. And you don’t have to do only the perfect one. Just pick one and take some action. Remember it’s better to be in the market than it is to be out of it.  Property is a long term investment.

I sometimes think of how much this gentleman was paying for spending all this time becoming educated. If he had bought back in 2006, when I first met him, he would have had the benfit of 6 years growth and 6 years of negative gearing. More importantly he would have benefited from 6 years of experience.

Then I think of all the people I know who did buy back in 2006 and what they have gained since.

That is the trouble with education for education’s sake. It doesn’t provide you with the practical experience of buying and owning an investment property. It’s fine to do your due diligence before purchasing as long as you actually end up proceeding to a purchase.  There is no value in learning something if you have no intention of putting the knowledge into action.

Ultimately the true practical experience of owning a property can never be learned from a book, a website or a seminar. The experience comes from doing. It’s simple really. Most things in life are learned from doing and sometimes we forget that.

I learned to ride a bike when my older brother put me on the seat and pushed me along. I didn’t grab a book and read about balance, co-ordination skills or watching where I was going. (Actually I wish I had known about that part because I rode into a fence but that’s another story.)

If you are thinking of attending a seminar or workshop, you should go, only if you have the intention of taking action. By all means keep going to seminars to fine tune your strategy but be ready to take action. Ideas without actions remain dreams.

Going to open houses, talking with Real Estate Agents, putting finance in place, attending auctions are some simple ways to take action. Engage a Property Advisory company to buy for you if you are not comfortable bidding at an auction or negotiating a purchase price.

A wonderful saying I heard many years ago goes something like this;

Its one thing to know what to do but its more important to do what you know.

I wonder if the man at the seminar ever took any action? Perhaps he still out there, Googling away somewhere trying to find the answer to when he should buy….


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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
  • Investors Direct Financial Planning Pty Ltd(ABN: 50 141 139 228 ; AFSL: 385827)
  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)