Wealthy Mindset Series #4
Big Picture versus Details
As you know, one of the most important keys to creating wealth is the right attitude, and in this series today we will cover how the wealthy look at the Big Picture before looking at the Details.
If you were looking to make an investment, like in real estate, and you found a house that could be a good candidate, but noticed the carpet was in horrible shape, the paint on the walls was peeling, and the faucets were all dripping, you are looking at the details.
If those details keep you from buying this house you could be making a mistake. The big picture items need to be the location of the house and the price. If in the big picture the house is in a great neighborhood and it is priced under market because of the condition, this could be a great investment.
That is what the wealthy do: They look at the big picture first and the details second.
Several years ago my wife and I were searching for an apartment building to purchase. We found one on Loopnet that might be a good deal based on the location and price. We drove out to see it and it was absolutely in a great area, and it had a lot of deferred maintenance. We later found out it was very poorly managed.
This turned out to be one of our best purchases. We purchased it for $1,225,000 and a GRM of 13.75 based on $81,600 of income. Ten years after our remodeling, using the same GRM of 13.75, it has a value of $2,887,500 based on an income of $210,000. Just the increase in value alone is a 10% annual compounded rate of return, without even considering the income increase of $257%.
Listen to your self-talk and see if you are looking at the big picture first and the details second, it applies to more than real estate investing.
Next in the series we will talk about how the wealthy use a team to accomplish anything they can think of.
To your prosperity,