Buy Assets, Not liabilities: Part 2

Hopefully in my last post, I convinced you of the wisdom of buying assets, especially cash producing assets that appreciate. "Yes," you are probably saying, "that does seem smart." So what stops us from getting them? I have a few ideas (many which are part of my own experience).

1. Fear. Most of us are scared of the unknown (how do I buy an asset?). We are also afraid of "taking a step back" in our lifestyle, afraid of explaining to our family/friends that we are changing our lifestyle to be wiser with our wealth, afraid of making a risk, and afraid of living life without all the luxuries that we are used to. Borrowing large amounts of money to buy a property (or stocks or a small business) seems terrifying. I think its terrifying not to borrow the money to buy something that will actually make you money instead of just draining your account! What will retirement look for you when you are no longer working?

2. Discipline. Most of us are not disciplined enough to say "no" to an impulse buy, a beautiful car, a night out with the girls/guys, that trip to the Mexico. We are convinced that we need these things and that we deserve them. We also believe that we couldn't possibly save money for an investment. The truth is that it takes discipline to save, work extra hard so you have something to invest with, and study to find good deals/assets to buy. Bill Hybels defines discipline as "delayed gratification." You delay getting what you could get now so that you can reap the massive benefits later.

3. Disbelief. Sometimes, we cannot believe that buying assets really will make the average person wealthier. Or even more common, we can't believe that it could actually make me wealthier (other people yes, me - no). These people cannot imagine themselves doing what so many others are. You can show it to them on paper, simple mathematics, but they can't see it. They are like the dwarf's at the end of C.S. Lewis's "The Last Battle." The Dwarfs get transported to paradise, but all they can see is the dirty old stable they used to be in. They will not allow their worldview to be changed.

4. Analysis paralysis. This one is often a problem with me. There are a lot of people out there who can see the wisdom of buying assets. They read up on the topics, go to seminars, talk about it with their friends. They spend hours analyzing properties, investments, or businesses. But they never act on this information! I was here. I was telling all of my friends for two years they should buy real estate but I didn't actually buy any myself. Then one day Jobina told me that one of these friends I had been talking to, a guy named Keith, actually took my advice and went and bought a rental property. He took action and I hadn't! I got so mad at myself that I called my realtor and said "We are buying a property by the end of this month!" Finally, I had the motivation. A few weeks later we bought our first rental property. I had moved from analysis to action.

5. Excuses. Sometimes we are our own worst enemy. What are your excuses? "I don't have any money to spare." "I'm in debt." "I don't want to fix plug toilets at three in the morning." "Stocks are to unpredictable." "I'm not the investor type." "It's not the right time." "Maybe in a few years, but not right now." "I've heard that we are in a bubble." As a counselor I know that if we don't want to do something, we can come up with tons of justification to not do it. And don't get me wrong, I don't think that everyone should be investing in assets, some people just aren't emotionally/intellectually cut out for it. Or they may be in a poor situation at the moment that won't allow them to. But the truth is that most people can and should invest in something. It's called being a good steward of the resources that God has given you. What excuses do you cling to? Are they justified?

These are just some of the things that hold us back. You could probably think of more. I think that the best way to get into buying assets is to buy an asset that:

1. You understand how it will make you money (the intellectual appeal).
2. Enjoy the thought of owning/maintaining (the emotional appeal).
3. Isn't too risky or won't destroy you financially if it doesn't go well. (the risk level appeal).
4. Other wise people you know think is a good investment (the safety check appeal).

It's New Year's Eve today. Why not make a goal to purchase at least one cash producing asset in the next six months? Maybe something small, maybe big. I know you'll be glad you did. Happy New Year.

May Light increase!