Let me ask you a question – Have you made any mistakes in your investment career?
If you’re an investor, you almost certainly have made some mistakes.
Nobody starts out as a great investor – property investment is a learned skill.
Today, I’m going to share with you one of the biggest mistakes I made early on in my investment career indisputable proof that I began life as an investment suck up.
Today’s show is part of what I’m calling the 2021 Summer Series where we replay some of the best episodes of the past.
Throughout January I’m sharing 3 shows a week with you rather than normal 2; and the reason I’m keen for you to listen to today show is because I hope you’ll learn something from the big mistake I made.
You see… I was taken in by a spruiker.
In the almost 50 years that I’ve been an investor nobody has made mistakes in the investment journey than I have.
In fact, I often say I’m a real success at failure.
Yet I’m a very successful investor today, and that’s largely because I’ve learned from my mistakes.
So, as I said, I hope you learn from my mistake, made early on my investment journey where I lost 100% of my invested capital, and that was one of the many learning fees I paid to the market over the years.
Subsequently I made lots of mistakes and paid lots of learning fees along the way, and that’s one of the reasons I share these regular podcasts with you to help you avoid making the same mistakes.
Now the mistake that I’m going to share with you today was made in the early 1970s, but the lesson is just as relevant today because now that our property cycle is now entering a new stage there are plenty of sharks out there, plenty of property spruikers out there giving “advice” who have a vested interest rather than your interest at heart.
And I hope you enjoy our chat as I expose a few things about my past.
Then I’m then going to have a chat with Pete Wargent about 3 demographic trends you need to understand as a property investor.
But remember, this is the replay of a show that was recorded a couple of years ago, yet the information is timeless, so it’ll be interesting to see the comments we made about demographics before the coronavirus affected our markets in 2020. However, I believe the long-term trends Pete and I talk about are just as relevant today as they were back then.
I also have a great mindset message for you.
My Worst Investment Loss Exposed!
I’m keen to tell you the story of how I lost 100% of my invested capital many years ago, way back in the 1970s, and the investment mistakes I made which created this disastrous result.
But first I want to explain the 2 main reasons why I’m sharing this story.
- Losing investments can be great teachers.
You’ll not only learn from the investment mistakes you make, but you can also learn from other people’s investment errors so that you don’t have to make the same mistakes yourself.
Most investors pay the market a huge learning fee in the way of mistakes.
Studies show that around 50% of investors who buy an investment property sell up in the first 5 years. Clearly, they’ve done something wrong.
And most investors who stay in the game don’t make it past their first or second property, so clearly, they’re not doing things right.
So why not learn how to avoid their common mistakes?
- Losses are a natural and normal result of making investment decisions.
Don’t be so hard on yourself when things don’t go as planned because the key to long term success is what you do when this occurs and the lessons you learn from your mistakes, so you don’t repeat them.
Here are a few of the more obvious mistakes I made with this investment:
- I gave my money to a virtual stranger without doing enough due diligence
- I invested in something I didn’t understand
- I bought a story rather than investment fundamentals.
- I was lured by the opportunity of making quick money
- In reality, I was speculating, not investing and risked money I couldn’t afford to lose.
- I had no investment strategy – just a desire to get rich quick.
I learned many lessons from this experience including:
- Not everything that glitters is gold
- Sometimes your best investments are the ones you don’t make.
- Don’t invest in anything you don’t fully understand.
I knew nothing about gold mining, so I was speculating rather than investing. I had no competitive advantage and there was no mathematical expectation for my investment strategy.
- One of the worst things that can happen to an investor is to get it right the first time. I thought I was smarter than I was when in reality my investment success so far was in large part to a rising property market – a boom that made me look smarter than I was.
- Don’t become overconfident -the market will soon humble you.
- I didn’t understand the incentives of the so-called “advisor” who really had a vested interest which created biases in the recommendations he gave me.
My worst investment mistake was a cheap lesson
This investment was the first of many learning fees I’ve paid to the market over the years.
I’ve made a lot of mistakes and paid a lot of learning fees during my journey to investment success.
Nobody starts out as a great investor. Property investing is a learned skill.
You now have indisputable proof that I began life as an investment sucker.
Few people have made more mistakes in their investment journey than I did.
In fact, I’ve often said I’m a real success at failure.
Yet, I’m a successful investor today, and it’s largely because I’ve learned from my mistakes.
I hope you’ve also learned something from my mistake.
Highlights from my conversation with Pete Wargent about Demographics
- Demographics drive the property markets
- One of the big changes ahead are the technological advances that will change the way we work.
- As many as 30-40% of the jobs today may not exist in their current form by 2030
- Property price growth is linked to wage growth so it’s important to understand what’s going to happen to wages
- Livability becomes more challenging as cities become larger and infrastructure and transportation don’t keep up
- People will want to live near where they work and near public transportation, especially in cities large enough for car ownership to not be realistic for many people
Links and Resources:
Some of our favourite quotes from the show:
“I’ve actually learned to say no to more opportunities that come up than yes, and I’ve made more money by saying no to them.” – Michael Yardney
“One of the key factors to my investment success is that I always try to learn from my mistakes.” –Michael Yardney
“Your mentors are the people that you hang around with that you learn habits from.” – Michael Yardney
PLEASE LEAVE US A REVIEW
Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes – it’s your way of passing the message forward to others and saying thank you to me. Here’s how
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.