Today’s blog is a little different – it’s not about property – it’s about you!

I would like to share the words of the late, great Jim Rohn. He said:

Here’s the great challenge of life – You can have more than you’ve got because you can become more than you are.

I have found that income seldom will exceed your own personal development. Once in a while income takes a lucky jump, but unless you grow out to where it is it will go back to where you are.

Somebody once said if you took all the money in the world and divided it among everyone equally; it would soon be back in the same pockets.

However, you can have more because you can become more.

You see, here is how the other side of the coin reads – unless you change how you are, you will always have what you’ve got. In order to have more, you need to become more.

The guy says “If I had a good job I would really pour it on, but I have this lousy job so I just goof off.” If that is your philosophy you are destined to stay there. Some people say if I had a lot of money I would be really generous, but I don’t have much so I’m not generous. See, you’ve got to change that philosophy or you will never have “the lots of money”.

Unless YOU change, IT won’t change. Amazingly, however, when we throw out our blame list and start becoming more ourselves – the difference is everything else will begin to change around us.

How do you like change? Change is not all that popular – is it?

Most of us would prefer a predictable futurefor our investments, our businesses and the world in general. As we move through this new financial era, a time of change, unfortunately these are all subject to the whims of the markets and the economy and therefore are not predictable.

Successful investors not only adapt to change; they exploit it. While many Australians will sit on the sidelines wondring what is going on, successful investors are looking for and buying investment opportunities created by the change. That’s right, some people will thrive not just survive in these changing times.

While this may seem difficult to believe given the number of mixed messages bombarding us in the media, the truth is that fortunes are always made in times of change. Over the next few years the gap between the rich and the average Australian is going to widen. It’s not because the rich will somehow be luckier than everyone else, it’s because they will be able to weather these economic changes better than most because they are financially fluent (they understand how money works).

If we have learnt anything from the recent economic crisis, it’s that life will always provide you with challenges and obstacles to overcome.

One of the big differences between successful investors and the average person is that successful people see such obstacles or setbacks as opportunities to grow and learn from, rather than insurmountable problems or personal failures. They persist through them, seeing them as challenges to overcome and strengthen their conviction as they move forward.

There’s no denying that the world economic crisis is currently creating issues which are affecting our banking system and the availability of easy finance for some property investors and business people. We’re experiencing a severe downturn in parts of the world economy, but really it’s just part of the economic cycle and does not mean the end of capitalism or bankruptcy of the banking system.

The problem is that the press loves to play on our fears and keeps feeding us a slanted view with a bias towards the bad. I remember reading and hearing similar doom and gloom prognostications in the early seventies, the early eighties and again in the early nineties. They said that the less than perfect financial situation back then spelt the end of capitalism, the ‘end of the world’ and that our property markets would collapse forever, never to recover. It didn’t happen then and it’s not going to happen now.

Let’s face it: the financial world around us is in turmoil.

The news is full of stories of recession, companies going bankrupt, banks going broke and even countries failing to pay their debts. Venerable international financial institutions that had survived for hundreds of years have toppled over.

While Australia has pulled through well, as have a number of other countries, there’s no denying that there are probably some more suprises around the corner.

Just in the last few weeks many investors I have spoken to a number of investors who have lost a fortune as the value of their share portfolio’s plummeted after the problems in Europe and the introduction of the Resources Super Tax. (Interstingly, during the same time property invetsors have seen the value of their portfolio’s rising significantly.)

Don’t get me wrong, I’m not suggesting more bad news is coming because I’m a fearful person or because I think negatively…I’m not and I don’t. I understand and firmly believe that all progress comes from change.

I believe destruction allows for creation – oftentimes of something bigger and better (if I didn’t subscribe to this theory I wouldn’t be a very good property developer would I?) It’s part of the economic cycle. This is a time for cleaning up the excesses of the past and getting our financial houses in order to move on to the next stage of the economic cycle, which is the recovery phase.

I’ve found that when things are bad people believe they’re going to be bad forever and when things are good people forget the bad times ever existed and think that things are going to remain good forever.

Neither case is true!

In fact during booms people are most confident when they should probably be the least confident, as things can’t continue travelling at breakneck speed and above average rates of growth. Similarly, during less prosperous times, things have to eventually turn around. Ironically, people have the least confidence when it’s more likely that things are going to improve…that is, when markets are near their lowest point.

When prices of properties, stocks, commodities or economic indicators boom, the way they did recently, the charge is often led by people who have no real idea about what is going on or what they’re doing. They see something good and they want to go along for the ride. In reality, the frenzied craze to make big bucks that coincides with a boom means we’re setting ourselves up for the inevitable fall.

Conversely, when fear makes property or share values drop significantly below their intrinsic value, we’re unwittingly setting the stage for the next upturn. I realise times are tough and you may be having a difficult ride at the moment. But the fact is, this is the right time to educate yourself and get set to take advantage of the opportunities this stage of the cycle presents. Remember that when things are bad they’re never as bad as they seem and when they’re good they’re never as good as they seem. And in reality, it’s primarily human nature that dictates economic and/or market booms and busts.

So what am I doing now, in these confusing economic times?

Well, I’m continuing to invest the same way I’ve always done. I’m still looking for investment opportunities and while others are selling up and currently buying assets considerably below their intrinsic value.

I am buying properties with an element of scarcity in areas that are in the upturn phase of the proeprty cycle. As always I only buy properties in areas that have outperformed the averages in the long term and properties “with a twist” – ones to which I can add value through renovations or redevelopment so that I can create my own capital growth. And I’m not scared to pay full price when buying the right property.

I know I make my money when I purchase my property, by buying the “right” property, not by buying a cheap property.