22 Nov We are not born with a 'how to' manual – Michael Yardney
Were you told from a very young age that if you want to succeed at something, you must put in time, hard work and importantly, practice. Successful property investors are not born with a “How to” manual and they certainly don’t rely on luck. Michael Yardney shares what he has learnt from working with these top people over the years.
Kevin: A question I’ve always wanted to ask is are great property investors born or made? Well, let’s ask one. Michael Yardney, who I consider to be a great property investor and an advisor joins me.
Good day, Michael.
Michael: Hello, Kevin. That’s an interesting question, isn’t it?
Kevin: Well, I know you were born, but were you born a great property investor?
Michael: No one is born with a how-to manual about doing money or other things in life, either, but I found that there are some innate qualities in some people that make them more likely to be successful. But you see successful people in business, property, shares become that way from all sorts of backgrounds, so I believe anyone can be – if they follow the right rules and develop the right habits, Kevin.
Kevin: I guess when you’re successful in life, it means you’re going to be successful at most things, but as you just alluded to there –and I think it’s a great point – there are common traits some of these people have, Michael. Is that what you’re finding?
Michael: I think that’s right. But what you said is right; you will find it in any area – in business or property. A small group of people will do consistently well and the vast majority won’t. Often, the way you do one thing is the way you do everything, so there are some underlying traits, Kevin.
I think one of them is that they have smart, rich thinking habits. It comes back in many ways to their mentality and how they think about things, but it also has a lot to do with your life’s experiences along the way. Every property investor who’s now successful who I’ve come across has had lots of little failures along the way, but all they’ve done is get up one more time and have another go at it.
Kevin: I quite often think of great sportspeople or people who are fantastic at anything, whether it be as a surgeon or a mechanic, one thing that they do have in common is that they might not have been born that way but they certainly did a lot of training, put in a lot of hours.
Michael: Sure. I remember many years ago there was a famous book by Malcolm Gladwell called Outliers, who noted that in most occupations where you needed complex cognitive and motor skills – whether it was performing surgery, whether it was being a musician, playing tennis – you needed a lot of training.
I think the key to that is over time, you learn to eliminate the noise. You need to be able to chunk down on information that’s usable, because there’s so much information out there, but you also need to know how to screen out the irrelevant options to you and only concentrate on the right things.
The way you do that is by doing it, and unfortunately, successful people will recognize that they have to fail to become successful, and that doesn’t put them off, while some people are scared of failing and they don’t have a go. That puts them off, and then they’re right; they won’t be successful.
Kevin: I think that is the first roadblock, not doing it for the fear of maybe failing.
Michael: That’s definitely one of them. So how do you know what to do when there are so many strategies out there?
I think one of the other challenges I see is that people are in a real hurry to get there. They want to do it quickly, and they’re lured by the things that are in my inbox and your inbox every day: “You can buy ten properties in ten years, you can buy five properties in three years, you can buy property with no money down.” I guess it’s our greed glands working overtime when you get those things.
One issue is understanding what’s realistic, and the other is becoming good at things by doing them over again. Rather than jumping from one shiny toy to the next, like the average investor does, the successful investors I see do the same thing over again: they set their goals, they map their course, and they keep doing what’s working, refining their skills along the way.
They stick to tried-and-true strategies, tested strategies. They know that way how to navigate the speedbumps along the way. And it means that their success then depends more on themselves, and on their skills that they’ve refined through familiarity, by doing it over and over again, rather than the marketplace.
Successful investors seem to do well in good times, Kevin, and they do well in reasonably bad times, while the average investor does reasonable in good times and they don’t do well in bad times. It seems to be that successful investors have something internal that makes them work, not the marketplace that drives them.
Kevin: Yes, consistency. You touched on that. Consistency is the key, doing it over and over. The way to become an expert at anything is to do it 100 times, rather than 100 things once.
Michael: That’s exactly right. That’s how you know when you are an expert, when you can repeat it, when you can do it over again, and when you get a consistent result. By doing it that way, it becomes boring, and that’s why some people look for other excitement, Kevin. I often recommend they go bungee jumping or they go trail bike riding. They should make their property investment boring so that the rest of their life is exciting.
Kevin: Very good advice. Michael Yardney, thank you so much for your time.
Michael: My pleasure, Kevin.