The Wealth of Common Sense blog recently published a great post on what matters and what doesn’t in investing. It’s aimed at general investors, and some of the advice rings true for property investors, too. Here’s our take on what matters and what doesn’t matter in property investing.
Doesn’t Matter: Short-term market moves or short-term changes in local prices.
Does Matter: Creating a long-term strategy that can guide your decisions through long-term market changes and meeting your long-term financial needs.
Doesn’t Matter: Your political views (in relation to property).
Does Matter: Creating a comprehensive financial plan.
Doesn’t Matter: The inevitable (temporary) decline in property prices
Does Matter: How you react when prices fall.
Doesn’t Matter: What happened in the market last month.
Does Matter: An understanding of your long-term financial plan.
Doesn’t Matter: Trying to time the market.
Does Matter: Your decision making with each individual property so you don’t pay too much or sell too cheap.
Doesn’t Matter: What your friend made or lost flicking a property last year.
Does Matter: The fact that many of the people who kept property for under 12 months last year lost money on their deals.
Doesn’t Matter: How many cars and toys your neighbour owns.
Does Matter: Your net worth.
Doesn’t Matter: The daily value of your property portfolio.
Does Matter: The value of your property portfolio and your overall financial portfolio when you retire.
This advice comes straight from the Wealth of Common Sense blog – we can’t improve on this:
“Doesn’t Matter: Making occasional mistakes.
Does Matter: Continuing to make the same mistakes over and over again.”
“Doesn’t Matter: Losing money in your portfolio occasionally.
Does Matter: Running out of money before you need it by not taking any risk.”
“Doesn’t Matter: Consistently beating ‘the market’.
Does Matter: Slowly building wealth over time to achieve your goals.”
“Doesn’t Matter: How much risk everyone else takes.
Does Matter: How much risk you are willing and able to take.”