The Biggest Mistake You Can Make When Building Your Wealth

The Biggest Mistake You Can Make When Building Your Wealth

The biggest mistake that you can make when you're in the process of building your wealth, is by not getting started. I know that sounds simple, but so many people wait and want to research the best strategy, and look at all the options, and they go into analysis paralysis. This is basically consuming way too much information and having too many choices, which essentially just leads to inaction.

Inaction is going to be more costly than just going ahead and choosing something and doing it, and making some mistakes along the way.

 

Had I not made those mistakes, I wouldn't be where I'm at today.

If I let that fear stop me from investing in real estate and the analysis paralysis of trying to find the best strategy, and the best time, and trying to time the market, I wouldn't have done anything.

In my opinion, the best way to get around this analysis paralysis and this fear of making mistakes is to find a coach or a mentor, someone that has gotten to where you want to go, and have them show you a path so that you can get from A to B, and they can help you avoid many mistakes.

The second mistake that I see people make when they're investing their money is to pull out too soon. We've seen it in the market crash in 2008. People see the market starting to go down, and so many people cashed everything out, and thought that they were protecting their investments, when really, we know now that's the biggest mistake that you can make.

If you take yourself out of the market, you’re taking yourself out of the game. A lot of people were burned so badly that they just never got back in. I understand some people had to, and we're in different phases of their investment cycle, and were coming up on retirement and things like that that were unavoidable. But for the people that just cashed out and were too scared and said, "You know what? The stock market doesn't work," the same thing happens in real estate. You get in, something happens, you get burned, you cash out, and you say, "That doesn't work."

That's not going to get you anywhere.

It's not going to help you learn from your mistakes and get better. It’s just running away from your fears, and running away from any kind of challenges that will arise.

It's so much harder to regain those losses if you take yourself out of the game, than it is to just weather the storm, have a long term mindset, stay in, and hold onto the low times no matter what happens.

Eventually we see that the market rebounds and recovers. And you rebound from your mistakes. I have made many mistakes. If I had cashed out, I wouldn't have continued on the path and I wouldn't have anything to show for it today. I would have so many regrets about that.

My best advice for you, is to choose something that you can stick to for the long term. Choose something that has been proven, a proven system, a proven method of building wealth, and stick it out, have a long term mindset, and really just commit to it.

The one way that I can actually force myself to do this is through a concept called dollar cost averaging. Dollar cost averaging is essentially investing on a regular basis no matter what happens in the market. So if you're investing in the stock market, no matter what's going on in the market, you're still re-allocating your assets, balancing your portfolio, and continually putting money into the market.

Dollar cost averaging is basically continuing to purchase investments without taking the market temperature too much into consideration. Over time, any ups and downs will balance themselves out.

In other words, never try to time the market. I hear this a lot. People are saying that they want to wait for the market to crash in order to invest in real estate. They're waiting for that downturn. They're waiting for that correction. I have been talking to people that have been saying that for 10 years. Nobody can time the market. Nobody can forecast the market. Even if they did time it perfectly during the next downtown, they still wouldn’t be as far ahead as they would have been jumping in ten years ago.

If you've been sitting on the sidelines for the past 10 years and not investing in real estate because you're waiting for the market to crash, you have lost out on a massive amount of wealth that you could have been building.

If you're not in the market right now, the best thing to do is to start today. I don't care what market you're in. I don't care whether we are in an upturn or a downturn. You can find something that will work for your portfolio. As long as you're in it for the long term, you will see success at the end of the day.

Of course it's better to be able to buy low and sell high, but it's very difficult to know when those things are happening. We often don't even see a recession until it's already here.

If you're always putting money into the market, you're investing when it's low, and you're investing when it's high.

Eventually all of those ups and downs will average themselves out, and you will come out on top.

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