Favorite Quotes Vol. XXX: How risk in real estate is related to us.

I was chatting with a very unqiuely intelligent two graduate-degreed guy today.  The degrees?  An MBA and an MD.  Yep, a Doctor who could tell you how to live an extra ten years, and then tell you how much those ten years will cost you.

He told me a story about his first class in Biz School, which focused on investing in real estate, whether that meant your own home, or something you were looking to flip.  He said one of the very first things the Prof. said was . . .

If you’re not sweating just a little bit each month to make your mortgage payment, you didn’t risk enough when you made your purchase.

This quote hit ‘home’ for me, because when I bought my apartment 15 years ago, I could have had a much bigger place for just a bit more.  I could have made it work, but it would have been a little tougher to make the payments, and I didn’t want to risk it.  Well, 15 years later, that other apartment increased in value a lot more than my current apartment.  But I wanted to play it safe, and live comfortably, rather than challenge myself just a bit.

And I lost out because of it.

It’s a great real estate lesson . . . but isn’t this quote also true about in everything in life?

If you want to do big things, whether that’s write a musical, produce a play, make money in the stock market, or heck, even have a wonderful marriage and family  . . . do you think you’re going to get it without a little bit of sweat on your brow every once in a while?  You think you can achieve your dream without that little nauseous knot in your stomach every so often  . . . you know, the one that scares the crap out of you . . .  but also makes you work a little harder to make sure you do get what you want?

Everyone gets scared.  And everyone sweats.

What that Biz Professor was saying, and what I am repeating, is that if you’re not sweating, that’s when you should really be scared.

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Comments
  • Cindy says:

    This type of advice is just what I needed today…thanks Ken!

  • Lisa G says:

    Agreed, with one caveat. A person needs an anchor in her or his life. The risks pay off only when one has an area of stability to count on for when those sweaty risks fall flat. Once that anchor is secured, you can push against it to go beyond your comfort zone in everything else.

  • Kevin says:

    And if your reaction to this is “holy *** no *** way!” then maybe it’s a sign you don’t have the risk tolerance to be a producer!

  • micah says:

    Isn’t that how a lot of people got in trouble in the credit crisis?

  • Taryn says:

    This is my next facebook status! I would have put it up today, but I just put up the Walt Disney quote from Meet the Robinsons lol.

  • Rick says:

    Interesting advice.

  • gina says:

    I am not sure if I believe in “signs” however my husband and I were just about to put in our “highest and best” bid for an amazing house against another bidder – and I was getting very anxious on how high we should go and yet desperate not to loose the house – this post miraculously appeared and helped put it all in perspective for me – of course, do not get yourself into a untenable situation, however if we did not have confidence and take an educated risk, we would not have won! I had huge butterflies in my stomach, but then that was nothing compared to the rush of adrenaline when we were successful! Thanks!

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