tiistai 24. maaliskuuta 2020


In an earlier post of mine (Link to money makes money) I mentioned that when one uses leverage it is really a must to know what you are doing. It is always good to know what you are doing and to have a plan. Questions investors often ponder with are:

1. What?

2. Why?

3. How?

Lets start with WHAT:
What it is that one wants to achieve? Do you want to live of dividends or other passive income for the rest of your life? Kick off the shoes...
What is it that one wants to do? Does it have to be really that passive or does one want to be hands on and cut off all the middlemen?
In what one wants to invest? Real estate? Stocks? Funds? In all of them?
These questions need to find answers. From there one can continue to the next question...

So let us continue to WHY:
Why does one invest only in realestate? Does one need to diversify and why? Does one have a family or not makes a huge difference. Is investing a way to spend later on more time with family or with kids or exercising or what ever? It really does matter if one wants to enjoy life in 10 or 20 or 5 years from now. Different strategies for different approaches. 
Why one invests in the first place? And yes, it is pretty much the same question as what do you want to achieve?

And then HOW:
With leverage or savings one already has gathered? Monthly, weekly, yearly...? It is "easy" to invest monthly a portion of you income in some low cost index fund.... It is trendy to talk and know about investing... It is "easy" to be a landlord and a realestate investor, just collect rent and buy new houses or appartments... Leverage is not possible for everybody. Someone needs first cut expenses just to be able to save something regularly. And for someone stocks are way too volatile. Investing should be easy and in a way it is but in a way it is definitely not. 

These questions are not meant to be easy. The point is that these questions are thought through thoroughly. For some it takes seconds for some this kind of pondering takes years. Think it through, multiple times, right now, afterwards and even when the journey has already begun. One does not even need to get to the finish line, ever. Just keep on going and adapt and rethink these questions.

It is not only about the leverage like I mentioned in the beginning. One needs to think these questions even if everything can be done without leverage. Not using leverage, not to invest at all, they are both, hopefully, rational decisions. Not investing at all you miss all the potential gains. There are always reasons not to invest. It is a more positive way to look at things by thinking what, why and how to invest. Have a plan. If needed plans can be changed and things can be reorganized. We are living in a mad world. 

The landlord has left the building....

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