It’s easy to be confident when stocks or property prices are going up. But when you read negative news like unemployment rates rising or property prices falling, it’s easy to lose confidence.
Here are some tips on remaining confident, no matter what the headlines say.
Have a positive mindset
With confidence things seem more achievable. Just like getting in the right mindset or a job interview or overcoming a personal challenge. It’s no different with investing. Investing with a fear mentality to begin with can prevent investors from finding opportunities, recovering money from past losses or making the right decisions.
Some investors view risk completely different to a confident or experienced investor. Everyone has a different perspective of risk. Know where your limits are so you are able to tolerate market fluctuations. Get in the mindset that accepts that prices do fall and develop a mental strategy on how to stay calm and move forward positively.
Be well prepared
The way you feel confident about what you’re doing in anything is to feel like you knowwhat you’re doing. Confidence comes from education and research. Investing in what you understand and know will help you reach your financial goals. Seek advice from professionals if you are unsure.
Change your focus
It’s a high possibility that sometime throughout investing a decision you make won’t go as planned. This of course can drop your confidence, but don’t let your past stop your future progress. By learning from where you went wrong you can make better decisions and move forward. Focus on what you can achieve, not what you haven’t achieved.
When you hear bad news it’s natural to start wanting to act based on this information. However, if you sell during down times out of fear (rather than circumstances) you could miss out on the inevitable upswing, which can sometimes happen quickly. Don’t let short-term bumps in the road distract you from your plan.
Although people have different ideas about when they want to retire and with how much, it’s important to have these end goals in mind. A slow and steady approach always wins long-term. Remember, you need to have flexibility for your short-term goals so they can meet the outcomes of the long-term game.
Investing through financial hardship
As a property investor it’s highly likely that you have or will experience financial hardship at least once during your investment journey. These times of stress and hardship can be caused by many factors, including market fluctuations, periods of rental vacancy, increases to outgoings and maintenance, or even a substantial change to interest rates.
While such periods are never comfortable and can take the fun out of a once high performing portfolio, it’s important to know that you are not alone, that such challenges are commonplace in property investing circles around the country and there are options available.
In some circumstances it is often that the investor has a sound portfolio, however, they are just requiring temporary assistance to get them through the tough period and emerge out the other side.
In Australia, banks and financiers are required to consider offering you flexible payment arrangements during periods of financial hardship. Other service providers, like insurance and phone companies, can also provide their customers with financial hardship arrangements.
The key to accessing these flexible arrangements and payment plans is getting in early. Ideally, before you fall too far behind, it will place you in good stead to work proactively with them to set a suitable and manageable arrangement.
Here are some tips on dealing with financial hardship:
- Make a list of all the debt you owe. Find out what payments are necessary to bring your accounts up-to-date so that you have a clear position on what you need to negotiate.
- Get real and assess how long your position will last for. Do you require 3, 6 or 12 months of relief? Do you need to plan for longer?
- Formalise a Budget to gain a clear understanding about what income you have to work with, what commitments can be made and which need to be deferred.
- Financial arrangements with banks, financiers and creditors can include: postponed or deferred payments, loan restructuring, interest only repayments, temporary overdrafts, lines of credit or entering into refinancing or debt consolidation arrangements.
There are a number of helpful resources available for further guidance through tough periods outlined below.
If your property is not already managed by us and you’re considering switching, you may be interested to know our competitive fees:
Management fee – 8% of rental income
Monthly admin fee $5
Letting fee – 1 week’s rent
Lease renewal – ½ week’s rent
*All prices are plus GST
You’ll experience a world of difference that you’ll remember long after the short-term promises have been forgotten.