ROE is totally misunderstood. It is the more standard return on equity but at the same time – and even sometimes more importantly – it can be translated into return on experience. Especially in the early years of real estate investing, experiences are priceless.
All the equity is already poured into getting some old money pit to start working on. The numbers are tight, maybe even negative on paper. Yet what you get “for free” is the stack of experiences you accumulate by trying, failing, repairing, and DIY’ing. Those hours with a paintbrush, a leaking faucet, or a broken floorboard teach you more than a spreadsheet ever could.
And it’s not just about saving money. It’s about building a foundation of know-how, confidence, and perspective. Sometimes you learn what not to do – that plumbing is best left to professionals, or that sanding floors is not your calling. But other times, you stumble into something you enjoy, something you are surprisingly good at. And who knows, one day those skills might turn into new opportunities, or at least save you from costly mistakes.
Two sides of experience
Experiences come in many forms. There is the hands-on, practical kind: fixing, managing, negotiating, renovating. These add up to a toolbox you can carry with you for life. They make you sharper, more resilient, and less dependent on outsourcing every small problem. In real estate, this often means you can move faster, make better calls, and even spot value where others only see trouble.
Then there are the softer, more intangible experiences. A concert you attended that left you buzzing for weeks. A journey across the world that shifted your perspective. A summer evening spent laughing with friends or playing with your kids. These don’t directly pay dividends in euros or dollars, but they enrich you in ways that compound over time. They anchor you, remind you why you are investing and working so hard in the first place.
The undervalued return
If you only measure life by the traditional ROE – return on equity – you might miss out on the hidden wealth of return on experience. The early years of investing are rarely glamorous. They can be filled with doubts, mess, and uncomfortable lessons. But those years are also where you collect the stories, the scars, and the skills that shape you as an investor and as a person.
Money compounds when invested wisely, but so do experiences. They shape decision-making, improve judgment, and give context to future opportunities. And beyond all financial gains, they make life richer, more textured, more alive.
Maybe the real secret is this: equity can be lost, but experiences might live forever.
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