Real Estate Investing Success Through Weighing Oppurtunity Costs

By
Real Estate Agent with Midwest Properties

One of the main reasons that people fail at any endeavor in life is that they fear failure, or fear the unknown. So many times new investors would rather live with a known bad situation, than put there neck out for an unknown outcome. Including outcomes that more often then not will end up better than where they are currently at in life.

One of my favorite, yet most saddening quotes is by Henry Thoreau "Most men lead lives of quiet desperation and go to the grave with the song still in them". Don't be one of those men or women. Instead live the life of this other Thoreau quote "I have learned, that if one advances confidently in the direction of his dreams, and endeavors to live the life he has imagined, he will meet with a success unexpected in common hours"

One of the tools that I have used to get beyond the ordinary, small life of quiet desperation is weighing my opportunity cost. Failing to weigh the opportunity cost of not doing, can leave you living your life like a paper weight. Opportunity cost is the cost of what you are doing compared to what you could be doing. Example: If your time is worth $30/hr, and you take a day off work to sit around on your butt, then your opportunity cost for sitting on your but is $30/hr. You are essentially paying $30/hr to sit on your but.

This relates to real estate investing because if you could be making an extra $20,000 a year as an investor, then your opportunity cost for doing nothing is $20,000 a year. Essentially, most wannabe investors who have become paralyzed by fear are paying at least $20,000 a year, to remain in the "getting ready, to get ready" state of mind.

Take a few moments and write down the things that you have been giving up in your life in exchange for giving into your feelings of fear. What is your fear costing your everyday. For many of you it may be costing you:

1.The great feelings of satisfaction from living the life of your dreams.
2.An extra $20,000 a year that could take you from living a life of scarcity to living the life of your dreams.
3. Paying for you child's education
4. Allowing retirement 15 years earlier. Think of all that you could do with 15 years of life.

The list could go on and on. Please take a few moments to write out what fear has cost you. Taking your thoughts down from your head and onto to paper will allow you to experience your thoughts with you senses. If you can come up with a list of 20 things that your FEAR is costing you, you will be well on your way to gaining the needed leverage to improve your life.

 

Feel free to check out my real estate wholesaling and real estate bird dog blog at http://www.themillioinairesblog.com/, or check out my real estate wholesaling Real Estate Courses at http://www.ultimatewholesalingsystem.com/ or http://www.theforeclosurecollege.com/ or my $30 introduction to real estate wholesaling course at http://www.investorslunch.com/

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Rainer
40,396
Frank Verna
Frank Realty - Jupiter, FL
Broker / Owner
You got it right, great info for realtors and investors, keep it coming!
Nov 15, 2007 12:36 PM #1
Rainmaker
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Don Eichler
Eichler Properties - Granbury, TX

Eric,  A very good post and one that sshould be read by anyone in any kind of business.  I have tried to explane your concept to many of my friends over the years.

 

Don

Nov 15, 2007 02:15 PM #2
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Rainmaker
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Eric Medemar

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