Property Or Shares? Who Cares?
What is the key to successful investing? Is it the investment vehicle—property or shares—or is it … THE INVESTOR?
I remember reading an article saying the Aussie housing market outperformed shares over a particular ten year period. And, I suppose that’s good news for property investors. The folks who invest in shares were probably not so pleased with this announcement.
But, I’ll bet there are property investors who lost money during this ten year run. And, I’ll bet there are share investors who made buckets of money over this same period of time.
You see, what is the key to successful investing? Is it the investment vehicle—property or shares—or is it … THE INVESTOR?
Allow me to share a story with you to better explain what I’m talking about.
I remember sitting on the dock at Boston Bay in Port Lincoln, South Australia a long time ago. I sat there for about an hour trying to catch fish. I got nothing. Yet the guy next to me was reeling them in left and right. His fish bucket was full.
I looked over at him casually and asked, “Whataya using for bait?” He tilted his bait bucket so I could see inside. I tried to hide my surprise when I discovered he was using the same bait I was using. When he wasn’t looking, I skootched over closer to where he was sitting then threw my line right next to his. It wasn’t polite fishing etiquette on my part but hey, I wanted to catch a fish! And nothing I was doing was working.
Time dragged on and my fish count stayed at zero. My fish bucket sat on the dock, empty. His fish count climbed higher and higher.
How come he was catching fish and I wasn’t? After a while, it became downright embarrassing. I could tell he felt bad for me.
In the end, I discovered just how bad he felt for me when he asked, “Hey mate, wondering if you can do me a favour?” I didn’t know where he was going with his question but I answered as if I really wanted to do him a favour, “Sure, what is it?” I mentally ducked as I thought he’d ask me to never fish at this dock again. But that’s not what he said. Instead, he slowly stood up, reeled in his line and asked, “I’m not gonna to keep my fish, wanna take’em home?” My eyes bulged out to the size of manhole covers as I shook my head up and down repeatedly and replied, “YES!”
As soon as I transferred his fish into my bucket, I galloped back to our cabin. My wife opened the door, looked at the bucket full of fish and then proceeded to greet me as a conquering hero. After all, I brought home a bucket full of fresh fish. I “milked” the hero worship for about fifteen minutes before I told her the truth – “I didn’t catch em, the guy on the dock gave me the fish!” In the end, she didn’t care as long as I came home with the goods. We had a good laugh.
But, here’s the question … how come the other guy caught fish and I didn’t? It didn’t make any sense to me. Same dock, same ocean, same fishing gear, same bait, same everything … except … the fisherman. Here’s the core, the kicker, the crux – one fisherman could fish, the other couldn’t. He caught fish, I didn’t.
Life Lesson - Investor Lesson
This was a good life lesson for me. You see, it’s the fisherman who catches the fish, not the equipment. The seasoned fisherman knows how to catch fish. The seasoned fisherman catches fish. No excuses. No long winded explanations. No theories, just a bucket full of fish.
Likewise, the seasoned investor gets results, runs on the board, money in the bank. Excuses are for the wannabes. Ever try to buy groceries or pay your light bill with excuses?
The seasoned investor knows how to invest. It may be the share market, it may be property; doesn’t matter. What matters is results, and investor results depend on - the investor. Does the investor know what he’s doing? If not, there’s trouble ahead - doesn’t matter if the market is good or bad. Just like the fisherman, if he knows what he’s doing then there’s going to be fish in the bucket. If the investor knows what he’s doing then there’s going to be money in the bank. But, if the fisherman is like me – doesn’t know what he’s doing – then the bucket stays empty. And, sadly, if the investor doesn’t know what he’s doing then the bank account stays empty. Not a happy ending. Sorry, I didn’t make up the rules of life.
And The Lesson Here Is What?
And the lesson here is this - get good.
How do you get good?
Well, here’s how not to get good … do nothing.
You like shares over property? Great. You like property over shares? That’s great too.
If you want to get good at shares guess what? You’ve got to get out there and do shares. Same with property - got to do it. Will you be good at first? I hope not, otherwise I’ll be jealous because at first I was “the pits!” I got hammered. I got schooled. But, that’s how I learned. (Note: I’m still learning.)
I’d suggest if you want to get good at something – anything – then go all Nike on it and JUST DO IT? Will you stink at first? Will your fish bucket be empty a lot? Will your bank account read ZERO or some horrifying MINUS number? Hell yeah! But, so what? You show me someone who’s good at something – anything – and I’ll show you someone who wasn’t good at it went they first started. Yes, to be good at something means you got to start off being bad at it. Sorry, I didn’t make up the rules of life. It’s just the way it is …
Dave Ives is a property investor and author. He lives in Alice Springs. To hear more from Dave, download his Free E-Book, ""How I got Started in Property Investment"".