Michael Yardney looks at five different styles of property investment and their pros and cons
I'm probably opening a can of worms by asking this question, but rest assured I’m not trying to start a fight.
The truth is you can’t really argue that one gender does it any better than the other. Each brings certain skills to the table.
Men and women spend a bit of time debating the differences between the way they handle money, but what we should all really be focusing on is our investment styles and whether or not they’re helping us achieve our financial goals.
I’ve worked with many very successful men and women in my time, and here are some of the best investment styles I’ve uncovered:
- THE CAUTIOUS INVESTOR
Sometimes you can be overconfident in your investments. You may feel that you’ve learned everything there is to know and can handle anything the market throws your way.
Or you may think that fortune favours the brave and that you need to take lots of risks to get ahead with your investments.
However, not every bold move is the right move and it’s important to take the time to carefully analyse any investment opportunity you plan to pursue, do your due diligence and ensure it fits in with your long-term investment strategy as well as your risk profile.
A cautious investor isn’t necessarily timid; often they’re just smart.
They make sure they have all the information before they take action.
- THE LISTENING INVESTOR
We’ve all met the person who knows it all. They know how the stock market is going to play out in the next few months. They know the next property hotspot that’s on the cusp of booming.
They may be great people, and they might even be right about their predictions, but the know-it-all investor is not a listening investor. And that’s a big problem.
Why? Because they’ll never learn anything new that way. They’re so busy talking and they’re so busy proving how right they are that they usually miss information that could help them.
Listening is an underrated skill in the world of investing. Zip your mouth and you will be surprised what helpful information you pick up.
- THE ENERGETIC INVESTOR
To achieve your dreams, you’re going to need energy. Lots of it. And you’re also going to need to know how to access extra reserves of energy when you’re feeling sluggish, tired or a bit rundown.
That doesn’t mean you need to run around at a mile a minute. Quite the opposite. But you do need a certain level of enthusiasm and drive that’s instantly recognisable to others.
After all, you need to feel excited about what you’re doing. Otherwise, how can you expect others to be excited about it?
Remember this: the energetic investor energises others.
- THE PERSISTENT INVESTOR
There will be times you fail. That’s a given. But how are you going to handle it?
My advice is to take a leaf out of the persistent investor’s book and get back up on your feet again.
Learn from your mistakes. Take it on the chin. Keep going. Don’t give up because you made a mistake and you failed.
The persistent investor sees failure as a necessary part of getting very good at something. They know that everything that is easy today was once hard.
- THE PATIENT INVESTOR
Now, this one’s a bit of an endangered species these days. People, as you probably know from driving around on the roads, have no patience. But patience is essential if you’re going to succeed in investment, because victory is rarely fast and easy.
Property investment is a long-term endeavour and success comes after many roadblocks, many detours and many dead ends.
Patience is not something that’s encouraged that much these days, but it’s vital if you want to prosper.
You can’t expect instant results from hard work, and sometimes your hard work won’t yield much at all. But if you keep learning and growing and you stick at something, you will eventually be rewarded. You just can’t rush it.
As Warren Buffet once said, “wealth is the transfer of money from the impatient to the patient”.
So which investor type are you?
You are likely to have a strong suit – an investor style you’re more naturally aligned to, one where you are in your flow.
And there will be other styles where you’re not so strong.
The trick is to identify the investor styles you need to work on and then try to include those traits in your day-to-day life, because the best investors will be a pretty even mix of all of the various investor styles.
And what style is that one called? The successful investor.
Michael Yardney is director of Metropole Property Strategists and one of Australia’s leading experts in wealth creation through property. He is also a bestselling author and writes the Property Update blog.
This article first appeared in MPA's sister publication Your Investment Property