While they are fundamentally different, gambling and investing have quite a few things in common.
For example, in both cases, luck can be a factor in winning big. There’s also the fact that risk is inherently present in both. And to go even deeper, there’s even more advanced strategies like understanding patterns and the sort.
But if there’s one similarity that we should keep in mind, it’s that the biggest threat to your investments is yourself.
Much like in high-stakes gambling, when a big loss happens, there is nobody to blame but the person who made the decisions in the first place. In the case of real estate, that's you, the investor.
And much like in gambling, the secret to even coming close to making a profit is to keep your emotions in check
The impact of emotions.
Since the dawn of man, humanity’s downfall has always been connected to our emotions in some way. Whether it be because of love, greed, fear, or over eagerness, in the different turning points of our history, they’ve been present.
The problem with our emotions is that they have this neat ability to cloud our judgement. As a result, we may make decisions when we’re “not in the right mind”.
In property investment, this usually takes the form of either greed or FUD (fear, uncertainty and doubt).
Our greed gets the better of us when we either jump the gun on buying a property when we haven’t even properly researched it, or when we sell way too late because we’re too eager to earn more. In both cases, this usually results in a loss for us, the investor.
And then there’s FUD, which results in basically the opposite of greed. It’s either buying too late, or selling too early. And even worse, FUD might even prevent us from ever getting involved in real estate at all.
Emotions are dangerous. A normal part of being human, but dangerous.
Control or be controlled.
We humans are rational beings.
But at the same time, we’re emotional beings. And emotions tend to cancel out any and all rationality.
It’s not like we can just not feel emotions. We’re not robots. But what we can do is try and get a hold of them.
It’s normal to feel what we feel when something happens. They’re healthy reactions. But we need to find ways to minimise the impact they have on our ability to make good decisions.
Otherwise, we will become slaves to irrationality. It will no longer be us making our own choices, we’ll simply be acting based on our impulses.
The journey to emotional maturity.
Admittedly, keeping our emotions in check is easier said than done. They are a part of our nature after all. Even seasoned veterans in the different fields of investment all succumb to it every now and then.
But it’s not as if you have to transform into some sort of emotionally adept guru overnight. Attaining emotional control is a long process, and much like other journeys of self-development, it is a continuous one. Lifelong in fact.
Try doing small things first. Maybe begin with taking a few deep breaths before every decision. Or maybe even taking a bit of extra time doing a little bit of research before calling anything. You could even start checking your portfolio a little less.
It’s the small things that build up to become big, good habits.
Start moving rocks, and soon you’ll be moving mountains.
Do you want to focus on what you do want in life versus what you don't want?