Today’s post is about a mindset that can cripple new real estate investors, and that I had to tackle early on. At a few of the seminars I used to attend, I would talk with people about my discomfort with making a lot of money while saying I’m “helping people” at the same time. I had this belief that in order to be benefiting others, you had to take some hits yourself. This simply isn’t true. Business success and positive energy are not zero-sum games, and oftentimes, the approach that works best for you is also the most desirable overall.
Look at the Project (RED) campaign. (RED) is a progressive project aimed at raising money to end AIDS in Africa through normal commercial channels. A (RED) label on a product indicates that a portion of that sale will be donated to a charitable cause. However, there have been many failed attempts to do the same thing. What sets (RED) apart is that it’s profitable for the companies involved. When Bono (who is an amazing marketer and an underestimated businessman) first pitched this idea to companies, many responded by saying “Sure, we’ll just donate a certain number to the project.” However, Bono and his team didn’t want this – they knew that if a company would just donate a certain number, the campaign would come and go. Instead, they opted for a sustainable business model that companies could stay involved with for years. In spite of the initial drawback (because profit was built in, each sale would not put as much money toward the cause), (RED) has become one of the most successful “compassionate capitalism” campaigns because it stayed worthwhile.
Real estate investment isn’t much different. You’re dealing with very expensive assets and there is potential for great loss (although you can almost eliminate this if you play your cards right). Because of this, short-term real estate investors – such as those who do flips and terms deals – require a sufficient incentive to put money into such an investment. If it weren’t for this, then real estate investment activity would go way down, which would prevent investors from helping families and homeowners with needs outside of the traditional retail real estate market. So charge what you’re worth. Once you’ve made the money, you can decide what to do with it, and not run the risk of accidentally losing money. Think of the incredible impact of donations from Warren Buffett or Richard Branson. As Yogi Berra might say, “You can be a lot more valuable, if you become valuable”.
0 Responses to “It’s OK To Be Rich”