{"id":3762,"date":"2015-03-11T01:00:28","date_gmt":"2015-03-10T14:00:28","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=3762"},"modified":"2015-03-11T01:00:28","modified_gmt":"2015-03-10T14:00:28","slug":"are-property-investors-rational","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/","title":{"rendered":"Are property investors rational?"},"content":{"rendered":"

 
\nOn today’s show\u00a0Michael Yardne<\/a>y\u00a0will examine some further ways our brains sneakily convince us to make decisions that aren\u2019t always in our best interests.
\n <\/p>\n

Read the transcript here:<\/h4>\n

Kevin<\/b>:\u00a0 Most of us think that we\u2019re rational, but deep down, we\u2019re not. That\u2019s one of the lessons we\u2019ve learned over the last few weeks talking to Michael Yardney about the psychology of success. You\u2019ve taken us through a few of the biases, Michael, but we\u2019re not really all that rational, are we?
\nMichael<\/b>:\u00a0 No, Kevin, we\u2019re not, but simply becoming aware of these biases means we\u2019ve beaten half the battle against our own worst enemy, which happens to be ourselves.
\nKevin<\/b>:\u00a0 Yes. You\u2019ve shared a few great biases with us, the confirmation bias and the bandwagon effect, as well.
\nMichael<\/b>:\u00a0 Sure, so let\u2019s talk about a couple of others this week. One of them is what I call the \u201costrich effect.\u201d When an ostrich is scared, the bird supposedly buries its head in the sand to stay ignorant of the approaching threat.
\nNow, the logic in this is \u201cIf I can\u2019t see it, it doesn\u2019t exist.\u201d It may be right, but in fact, as ridiculous as it sounds considering other human beings do this, as well, we simply don\u2019t have a neck long enough, obviously, to stick your head in the sand. But we do deliberately look away from our money problems.
\nSome investors avoid unpleasant information, such as reading negative financial news, checking on the performance of their properties, while many Australians just bury their heads in the sand about their future financial security, and they put off investing altogether, Kevin.
\nKevin<\/b>:\u00a0 You can actually block things out, though, can\u2019t you?
\nMichael<\/b>:\u00a0 Yes. Now, one would say that\u2019s a protective mechanism, and it is, but it also doesn\u2019t really protect you. It\u2019s hiding in the sand, and it doesn\u2019t help you move on.
\nKevin<\/b>:\u00a0 It would be hard to communicate with someone and try to convince them that they\u2019ve actually got this ostrich effect because the first thing they\u2019re going do is block it out.
\nMichael<\/b>:\u00a0 You\u2019re right, Kevin. That\u2019s why we started this whole series by saying, \u201cWe are our own worst enemy.\u201d
\nKevin<\/b>:\u00a0 Yes, we are indeed. Sometimes, Michael, we tend to overlook some opportunities in the past because we\u2019re content with what we already have.
\nMichael<\/b>:\u00a0 Kevin, I think that\u2019s a good point. It\u2019s a bit like if you own a good Windows computer instead of Apple one like you and I do, you\u2019re more likely to downplay the faults of Windows and amplify the faults of Apple computers. It\u2019s just like when you\u2019re convinced an investment you\u2019ve made is great just because you spent so much time, so much research, so much emotion selecting it.
\nIn fact, you rationalize your past choices to protect your sense of self. Now, you may not necessarily be wrong, but it\u2019s a bias you should be aware of in the future when reviewing the performance of your property portfolio.
\nKevin<\/b>:\u00a0 You talked about research there, but what about people who look for patterns in research and make themselves believe that that\u2019s the path they should follow?
\nMichael<\/b>:\u00a0 Kevin, psychologists call this the clustering effect. It\u2019s a tendency to see patterns that happen in random events. This is particularly seen with gamblers. They\u2019re desperately trying to beat the system by seeing a pattern in the roll of the dice or the roulette wheel. \u201cI had four reds in a row. Now it must be black\u2019s turn,\u201d when in fact it\u2019s a 50\/50 chance next time.
\nWe\u2019re pattern machines and recognize people and things from the overall patterns rather than the full details. While this is very useful \u2013 it helps us get through life \u2013 it also means we can sometimes see patterns where there\u2019s nothing, as you said, Kevin. This selective thinking can lead to wrong conclusions when faced with the multitude of mixed messages we\u2019re currently getting in the property market, so it\u2019s just something to be aware of.
\nKevin<\/b>:\u00a0 Indeed it is. I know we come across it quite often, too, and that is that people end up with closed minds, Michael. They don\u2019t have an open mind; they\u2019re not even willing to even learn or listen.
\nMichael<\/b>:\u00a0 That\u2019s right. One of the challenges is more with intelligent people, I\u2019ve actually found, because intelligent people sometimes have difficulty remembering what it was like when they started. I see this particularly in property investment when I come across professionals who are successful in their own fields and believe that this can translate to success in the arena of real estate.
\nHighly intelligent people, I\u2019ve found, have difficulty asking for help or taking advice, because they think they should be able to work it out themselves. They try to tweak and improve and fine-tune someone else\u2019s property strategy, they interpret it with their own biases, and then they wonder why it doesn\u2019t work.
\nOn the other hand, I\u2019ve found that many of the successful investors<\/a> I\u2019ve come across are, I\u2019ll very politely say, dumb. They just find a strategy that works; it\u2019s worked for their mentors, and they just follow it.
\nKevin<\/b>:\u00a0 What about the overconfident people, Michael?
\nMichael<\/b>:\u00a0 That\u2019s a challenge too, isn\u2019t it? It is the downfall of many investors. In fact, one of the worst things that can happen to an investor is to get it right the first time when they buy a property. This has happened a bit in the last year or two, really, during boom conditions when somebody\u2019s just bought something, and they think they\u2019re smarter than they are.
\nThis has occurred when beginning investors bought mining towns, and all of a sudden, the prices inflated, or they bought at the right time of the cycle. Unfortunately, though, many are now finding out that they weren\u2019t as clever as they thought they were as the value of their properties keeps falling, especially in the mining towns and in regional areas where prices are deflating.
\nAs you can see, a lot of these preconceptions influence your success as a property investor. They get you to interpret the information that\u2019s coming to you incorrectly, and you end up making less-informed decisions, Kevin.
\nKevin<\/b>:\u00a0 There\u2019s one that we haven\u2019t touched on that we might pick up on next week, and that is the one of procrastination. I think this is probably one of the worst ones I\u2019ve ever seen, Michael.
\nMichael<\/b>:\u00a0 That\u2019s very common, isn\u2019t it? Let\u2019s talk about next week.
\nKevin<\/b>:\u00a0 Michael Yardney from Metropole Property Strategists. Thanks, Michael.
\nMichael<\/b>:\u00a0 My pleasure.
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

  On today’s show\u00a0Michael Yardney\u00a0will examine some further ways our brains sneakily convince us to make decisions that aren\u2019t always in our best interests.   Read the transcript here: Kevin:\u00a0 Most of us think that we\u2019re rational, but deep down, we\u2019re not. That\u2019s one of…<\/p>\n","protected":false},"author":176692471,"featured_media":3480,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,25],"tags":[101],"class_list":["post-3762","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-sponsored-channels","tag-podcast"],"yoast_head":"\nAre property investors rational? - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are property investors rational? - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  On today’s show\u00a0Michael Yardney\u00a0will examine some further ways our brains sneakily convince us to make decisions that aren\u2019t always in our best interests.   Read the transcript here: Kevin:\u00a0 Most of us think that we\u2019re rational, but deep down, we\u2019re not. That\u2019s one of...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2015-03-10T14:00:28+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"Are property investors rational?\",\"datePublished\":\"2015-03-10T14:00:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/\"},\"wordCount\":1166,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"podcast\"],\"articleSection\":[\"Kevin Turner\",\"Sponsored Channels\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/\",\"name\":\"Are property investors rational? - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2015-03-10T14:00:28+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/are-property-investors-rational\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Are property investors rational?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. Anywhere, Anytime.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\",\"name\":\"rolanrush\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"caption\":\"rolanrush\"},\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/author\\\/rolanrush\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Are property investors rational? - Realty Talk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/","og_locale":"en_US","og_type":"article","og_title":"Are property investors rational? - Realty Talk","og_description":"  On today’s show\u00a0Michael Yardney\u00a0will examine some further ways our brains sneakily convince us to make decisions that aren\u2019t always in our best interests.   Read the transcript here: Kevin:\u00a0 Most of us think that we\u2019re rational, but deep down, we\u2019re not. That\u2019s one of...","og_url":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/","og_site_name":"Realty Talk","article_published_time":"2015-03-10T14:00:28+00:00","author":"rolanrush","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rolanrush","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#article","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/"},"author":{"name":"rolanrush","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"headline":"Are property investors rational?","datePublished":"2015-03-10T14:00:28+00:00","mainEntityOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/"},"wordCount":1166,"commentCount":0,"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#primaryimage"},"thumbnailUrl":"","keywords":["podcast"],"articleSection":["Kevin Turner","Sponsored Channels"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/","url":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/","name":"Are property investors rational? - Realty Talk","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#primaryimage"},"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#primaryimage"},"thumbnailUrl":"","datePublished":"2015-03-10T14:00:28+00:00","author":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"breadcrumb":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/channels.realty.com.au\/realtytalk\/are-property-investors-rational\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/channels.realty.com.au\/realtytalk\/"},{"@type":"ListItem","position":2,"name":"Are property investors rational?"}]},{"@type":"WebSite","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website","url":"https:\/\/channels.realty.com.au\/realtytalk\/","name":"Realty Talk","description":"Your Trusted Voice For Property Investing. Anywhere, Anytime.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/channels.realty.com.au\/realtytalk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d","name":"rolanrush","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","caption":"rolanrush"},"url":"https:\/\/channels.realty.com.au\/realtytalk\/author\/rolanrush\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/3762","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/users\/176692471"}],"replies":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/comments?post=3762"}],"version-history":[{"count":0,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/3762\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/media?parent=3762"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/categories?post=3762"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/tags?post=3762"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}