Myths that Keep You Broke #8

Myth #8 - Details:  

You may think the details of an investment are the most important. Yes, the details are important, but they are NOT the most important. The most important aspect of an investment is how it fits into the big picture of your life.

If you want nothing to do with tenants, trash, or toilets, do not buy and manage an apartment building, or any type of rental housing. You can invest in this area if you want by hiring a management company, but the big picture is you should not be personally involved.

If the ups and downs of the stock market would keep you awake at night, do not invest in stocks. It does not matter what the details are: Price earnings ratio; dividend payouts; or what the buy or sell points are on a technical graph – if the gyrations will prevent you from getting sleep.

If you think there is security in having a job with a steady paycheck, then do not become an entrepreneur. It does not matter how fast the industry is growing if you are not cut out to be an entrepreneur. The big picture is Keep Your Job.

There are opportunities for wealth in each category I mentioned. If you looked at the details first, instead of the big picture, you could lose sleep and be miserable.

Think of it this way: If you were to cross the street and focus first on all the details; the height of the curb; any cracks in the asphalt where you might twist your ankle; possible dog mess to avoid… if you keep your eyes focused on the details it could kill you! If you failed to look at the big picture first, and see if any cars were coming from either direction, those details would not save you.

Let’s say in the big picture of your life you wanted to invest in a rental house and you found one. But you noticed the carpet was bad, the paint was peeling and the plumbing was leaking, it could turn you off. But if the big picture was the house was priced under the market for the area, and the area was great, then that would be the more important consideration for your investment.

Big picture first; details second.

To Your Prosperity,

Rennie