“Is now a good time to invest?”

11 Dec    Uncategorized
Dec 11

“Is now a good time to invest?”

After speaking with prospective clients, invariably this question will come up. “Is now a good time to invest?” I must admit, it is a very valid question. But it is always asked for the wrong reasons. The poser of the question wants to know if they are getting the best possible deal, getting the best mortgage rate, the best everything.

The short answer is: with your mindset, it is never a good time to invest

The root of this question lies in fear. Fear of loss. Humans are inherently risk adverse, and humans will do everything in their power to mitigate risk that they will gladly give up huge returns/rewards.

Long answer: It is always a good time to invest (when using this strategy)

My partner wrote about timing the market. Not only is it an impossible task, we are not day traders or flippers. Therefore, it is always a good time to invest. Think back 10 years ago, when housing prices were way too high, you are a fool to buy now! Then 5 years later, those who did not buy will say “I wish I bought back then, it was so cheap! Now the price is seriously way too high!” Fast forward to present day, those who did not buy will say “I wish I bought back then, it was so cheap! Now the price is seriously way too high!

Do you see a pattern here? Take a look at the historical prices of real estate, it’s a zig zag line, but it generally goes up. Yes, the market may dip for 2-3 years at a time, and take another 2-3 years to recover. But in the long run, real estate always appreciates.

Let’s reset our frame of mind with a real life example. The difference in price of my first and second property was $30,000 and it was purchased only 4 months apart. 30k is no small sum, and the houses are very similar, so somewhere I must have overpaid. Most people would start blaming someone for scamming them etc etc. But guess what? The prices I paid were very fair prices at that moment in time, and most importantly both properties are cash flowing positive, making me money every day.

The reason why we don’t have to worry about the rise and fall of house prices is because we make sure the math works out before we put the offer. Then we are in for the long haul.

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