This week’s Steve-ism is:

“Investing mirrors life”

Do you agree that it’s unwise to add a second-floor extension to a house with cracked and structurally unsound foundations?

Well, the same applies to your investing plans, in that you can’t sustainably invest successfully (i.e. build a second floor) without first having a stable life foundation.

That is, if you have life problems that manifest themselves in broken or dysfunctional relationships, money frustrations, serious health problems, stress, depression, anxiety etc. and you go ahead and invest with the hope these problems will go away once you have more money, then the extra time and financial pressures associated with investing will most likely worsen, not improve, those pre-existing weaknesses.

Money doesn’t fix pre-existing problems, it amplifies them.

If you’re feeling lost, confused or unmotivated with your investing then watch this video to discover an ‘a-ha’ moment that changed my life:

 

 

“Investing mirrors life” means that your investing will be an extension, rather than a substitute or a replacement, to your pre-existing life challenges and complexities.

It’s therefore wise to ‘firm up’ your investing foundation by trying to resolve the confusion or conflict caused by relationships, and monetary or other life problems, before launching into an investing career. Otherwise you’ll find it very difficult to gain the clarity and confidence needed to invest profitably and sustainably.

Make a note of three things that you’d like to resolve (or at least start to sort out) before you extend yourself by scaling up your investing activities.

If you have a question or need some help then make a post below. Alternatively, you can browse what others are saying.

Until next time, remember that success comes from doing things differently.

– Steve McKnight

Comments

  2. Profile photo of realreno

    Hey Steve,

    I hope you’re going well. I’ve been wondering about this question for a while, so here I go.

    Since reading From 0 to 130 Properties in 3.5 Years, I often wonder if it’s still possible to use the purchasing structure you set out in the book, today. More directly, the purchasing of multiple houses on one income time and time again. Is this still possible or have there been law changes that no longer allow this? I’ve come across people who say this method is not possible or that you risk getting in trouble with the law if you use this method. What’s your view?

    Thanks!

    • Profile photo of Steve McKnight

      Hi RealReno,

      Thanks for your question.

      The laws have not changed, but standard lending practice has – for some.

      It is still possible but you will need to find a business banker who understands how professionals invest. You will have less-to-no luck with mortgage brokers and retail staff at major lenders.

      Regards,

      – Steve

      • Andre

        Hi Steve,

        How true this is. Many would think that money will solve any existing issues that one might face. Yet, it can be that one thing that unravels relationships and family when you have too much of it, or when you are not ready for it!

        If we can be faithful in the little things, then we may be able to handle the ‘big’ things when they come, wouldn’t you say?

        My A-Ha for today indeed!

      • Andre

        Hi Steve,

        In response to ‘less-to-no luck with mortgage brokers and retail staff at major lenders’, would not a beginning investor need to go to such people to begin with?

        It is only through perhaps another X-number of properties that a beginner investor might actually get access to business banking. How many properties would you say a beginner investor needs to have under his belt before having access to business banking’s attention?

        Thank you for any insight you might be able to give!

        • Profile photo of Steve McKnight

          Not necessarily Andre. If you have a business, or a plan for a business empire, or a ‘commercial structure’ such as using a Trust, then you can usually approach a business banker. It’s just that most people don’t.

          Regards,

          – Steve

  3. Adam

    Excellent Steve. Very true. These are the “universal” rules that can be witnessed across the globe.
    It would be interesting to see those that don’t agree with this and how “sorted” there life currently is 
    Take care Steve.

  4. Keira

    Couldn’t agree with this more! I am currently working through this myself. Added to the plate before I finished what was already on it and have dug myself a few holes and wasted a bit of money in the process. Currently digging myself out so I can be 100% present and available for the next adventure :)

  5. Andre

    Hi Steve,

    How true this is. Many would think that money will solve any existing issues that one might face. Yet, it can be that one thing that unravels relationships and family when you have too much of it, or when you are not ready for it!

    If we can be faithful in the little things, then we may be able to handle the ‘big’ things when they come, wouldn’t you say?

    My A-Ha for today indeed!

      • Profile photo of Jason Staggers

        You referenced relationship problems as a hindrance to investing success. It’s not uncommon that I speak to investors who have had to start over after dividing assets with an ex, which has set them back years. Even more common are investors who are not on the same page with their partners when it comes to financial dreams and goals, making them ineffective in leveraging off one another’s strengths.

        One thing we focus on in our mentoring program is pursuing a higher level of alignment between partners. Not only does this preclude (or help to heal) some of the deeper issues, but it can empower our clients achieve their goals much faster.

  10. Jill LI

    thank you so much steve. ive been looking outside ie property goals but more recently ive started looking within as i have found myself getting emotional towards deal processes. your words just confirmed what i need to do in terms of priorities.

  11. Katrina

    Love this Steve!!! I remember you gave us that advice 10 years ago! It was hard to hear. But slowly we put into practice, paying off debt, saving, paying tithe. What a blessing that advice has been.

  12. Anthea

    Hi Steve,
    I have recently enjoyed re-reading 0-130 properties in 3.5 years, thank you and appreciate that it was written prior to Banking Royal Commission recommendations etc. and that the investing landscape has changed and continues to evolve.

    I am seeking guidance around the best ways to search for positively geared units on the internet and looking forward to your advice.

  13. Lachlan

    Hi Steve,

    I’m after your expertise in moving to the next step of our investing journey.

    We currently have 1 OO and 1 IP with about $100K of usable equity.

    My question is – what is the most practical scenario utilising equity – equity loan or an equity line of credit?

    I’ve read the following – am unsure if all details are correct:

    1. Equity Loan – use as a deposit – pay P&I – fixed interest.
    2. Equity Line Of Credit – use as a deposit – pay interest only for first 10 years (which is tax deductible) – variable interest.

    I want to alleviate as many hassles as possible that may arise in the near future due to my inexperience in laying the foundations to a positively geared portfolio.

    Thanks

    Lachlan

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