How To Become A Better Investor: Tips From Tim Ferriss
What steps can you take today to become a better real estate investor tomorrow?
Whether you still haven’t gotten started in real estate, or you already have 100 plus properties under your belt, what are some of the moves you can make to be a better investor?
Most entrepreneurs are now familiar with Tim Ferriss. What you may not know, however, is that he is also a serious investor. You’ve got to do something with all that money, right? According to a recent podcast episode, Ferriss reveals that he not only invests in startups, but real estate as well. He says his investment results have now far exceeded the success of publishing, which by most standards has been hyper-successful. So what are some of the tactics Tim has used to become a better investor himself?
When you start out investing, Tim Ferriss points out, it is important to realize you are probably not the best in the world. You probably wouldn’t bet on yourself if you stepped into the boxing ring with Mike Tyson, or were playing poker with a table full of world champions. But you can learn from the best. Ferriss has spent years interviewing leaders in all types of areas, learning from them, and networking with them. So keep learning, and look for power networking opportunities.
The love of reading may not be as common as it used to be, but that doesn’t make it any less important. In fact, it’s a great way to get the edge. Leaders read.
Reading is absolutely one of the most common habits of all types of leaders, especially among wealthy investors. Some specialize in speed reading, others juggle seven books at a time and read a few pages each day. Those seriously entrenched in the real estate business will be on top of the news, top real estate blogs, trending real estate social posts, and be reading real books, as well as working on courses each day and week. Ask Ferriss for a book recommendation, and he’ll probably give you a dozen on any topic.
Tim Ferriss is quick to point out the importance of knowing your advantages and disadvantages in the investment marketplace. Perhaps your advantage is knowledge of a certain location, the capital or credibility to influence market direction, skill at interpreting data, real estate marketing, sales skills, or handyman and construction work. Know your strengths and invest with those in mind.
There are many different strategies to use when investing, and specifically for investing in real estate. Will you wholesale, fix and flip, or buy and hold? Will you invest directly, actively, passively, or through an intermediary? Which strategy best suits your preferences, strengths, resources, and financial goals?
Diversify within different asset classes, and different properties. The better diversified you are, the better protected you are, and the more likely your returns are going to be consistent. Maybe you need to move 30 percent of that stock portfolio over to real estate? Or, opt for buying 3 to 5 cheaper rental properties.
Ferriss is perhaps best known for his experiments. He has experimented with everything from The 4-Hour Work Week, to publishing to startups to fitness and food, and more. So his message is clearly not only to try new things in investing, but in life too. Only by trying new things in real estate investing will you get new results. Striving to experience more in life and work will make sure you have a rich experience in and outside of your bank account.
One of the great takeaways from Ferriss’ revelations about his own experiments in investing is using practice accounts. Most may be familiar with using practice accounts to play around with, and teaching kids about stocks. However, investors can use the same concept for real estate too. If you are afraid of investing, or are uncertain of where the market is going, then run some practices. Go back and look at some investments you could have made, and then what the returns should have been like if you exited when you would have.