When it comes to executing a bona fide financial strategy, whether the goal is simply security, legacy creation, or amassing wealth, the reality is there are no guarantees, and each approach always has a risk vs reward ratio that has to be considered.
This can make investing an almost intimidating path, but the reality is that without having investments as part of your strategy, the path to growing your wealth is highly unlikely. According to The National Study of Millionaires by Ramsey Solutions, there are some pretty interesting findings:
Eight out of 10 millionaires invested in their company’s 401(k) plan.
The top five careers for millionaires include engineer, accountant, teacher, management, and attorney.
79% of millionaires did not receive any inheritance at all from their parents or other family members.
Three out of four millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success.
Acknowledging that investments are a standard component of any well-rounded financial plan, why not take some time to learn from those that have spent decades of their lives doing it?
This week we sat down with our own Director of Investor Relations, Jeannette Robinson, to discuss what common attributes she has recognized in some of Blue Lake Capital’s most experienced investors.
Inspiring Attributes of Experienced Investors #1:
Calm Under Pressure
An experienced investor does not get easily rattled. For those that have been investing for 30, 40, or even 50 years, they recognize that real estate investing is, and always eventually will be, cyclical.
This means that they are not necessarily caught off guard by varying market conditions, the posturing of politics, or the highs and lows that come into a long-term patient capital approach to building wealth. After all, seasoned investors have made it through periods of history including the Great Depression, the “Stagflation” of the 70s, the Banking Crisis of the early 80s and 90s, the bursting housing market bubble of 2008, and more.
And yet, many continued investing. Why? Because they know the value of discipline and have seen similar, or worse, market conditions in their history. They know variances in the market and the economy is nothing new and is not a reason to panic.
The History of US Real Estate from the Great Depression to Present Day
Source: macrotrends.net <a href='https://www.macrotrends.net/1314/housing-starts-historical-chart'>Source</a>
In fact, because of their experience, seasoned investors recognize a few key lessons that can benefit us all:
- They don’t try to time the market.
Most seasoned investors know that trying to time the market is a fool’s errand. No one can predict the future, and while you can reasonably anticipate some factors, no one has a crystal ball. This is why experienced investors instead…
- Stay the course.
The result of decades of experience has equipped experienced investors to remain calm under pressure and focused on fundamental factors without the sensationalism. They understand that there are highs and lows in the market cycle and are positioned to handle each stage in the process.
Inspiring Attributes of Experienced Investors #2:
Objective & Disciplined
Experienced real estate investors are not emotional, nor do they buy into hype or sharply packaged marketing efforts. In fact, the more experienced an investor is the more direct and matter of fact the conversation goes.
Seasoned investors are often experts or near experts in a handful of strategies, and they remain disciplined over decades as they patiently invest into and building from these areas of focus. When evaluating opportunities, they are very objective and thorough in assessing the fundamentals of each deal, including the business plan, the management team, the strategy, the location, property financials, and the pragmatism of the projected returns. They conduct their own due diligence and consider their actions carefully.
However, they are also not afraid. As much as seasoned investors can’t get “hyped up” by a great deal, they are also not paralyzed by fear and inclined to hide on the sidelines. They recognize the need for objectivity and discipline in their wealth building strategies, and they stick to it when the deal fundamentals are strong.
Inspiring Attributes of Experienced Investors #3:
Value Relationships Over Returns
As was mentioned, experienced investors don’t get hyped up, even for the allure of large returns. Novice investors might be surprised to learn that seasoned investors value something even more than their returns: the relationships.
Experienced investors are often loyal to their relationships above even profits, as who you make money with is of more importance to them than just how much is made. Identifying and building long term business relationships that consistently yield a positive return overall is often more important to seasoned investors than chasing the larger projected returns with the next guy claiming to have the “deal of the century”. Experienced investors recognize that finding good deals to invest in is more commonplace than finding good partners to invest with. When they establish these win-win relationships, built on integrity and trust, they value them and remain loyal and consistent partners long term.
"Finding the right partners can be of greater importance than just finding the right deals."
The majority of millionaires invest regularly and consistently.
Experienced investors remain calm under pressure and focus on cyclical fundamentals over variables.
Objectivity keeps emotions out of the investment process and helps investors evaluate deals more clearly. Discipline helps them build on their success repeatedly, in order to accomplish their overall goals.
Finding the right partners can be of greater importance than just finding the right deals.
Millionaires are rarely made overnight. If you are focused on building your wealth, one of the best approaches you can take is to learn from those that have decades of experience.
By taking the time to reflect on the most common, yet inspiring attributes of experienced investors, you will be able to position yourself to better handle the fluctuations in the economy, remain focused on your goals, and build out the right network for your net worth.
As always, Be Bold, Be Great, and Keep Pushing Forward!
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About Ellie Perlman
Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Blue Lake Capital is the sponsor of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.
Ellie started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.