No need to dance around it.
On the back of 2 silly decisions, I lost more than $100,000
I got emotional and let fear take over at a critical point.
And it still pains me to this day.
Rather than pretend it didn’t happen, I remind myself continually.
So I don’t repeat it.
The good news is that since making that poor decision, I have gone on to make many better decisions.
Anyway, here’s the story…
I had just completed my first successful property development.
The bank had revalued the property, and I was blown away by how much it was now worth.
I was jumping around celebrating the result.
Throwing high fives and hugs at Bianca.
I contacted my buyer’s agent to share the good news, as he was the one who found the project.
While I was on the phone, I told him it was time to find the next one.
“Let’s go again!”
The excitement of the win fueled me to want to do it again.
About 4 weeks later, my buyer’s agent sent me an email.
“Found another property.
A similar type of project.
However… things had changed.
The 2nd phase of a pandemic had just started.
We had just gone into lockdown for the second time.
Things were getting intense around me.
– I wasn’t allowed to leave my home
– The news was reporting some dire projections
– There was constant talk of the economy collapsing
I’ll be honest.
I got fearful that things were going to get much worse and that the property market might collapse.
I got on the phone with my buyer’s agent and said.
“I’m going to pass on the project.”
He was shocked to hear it from me.
Asked me if I was sure several times.
I also knew I would forfeit the $5,000 deposit I had paid him also.
To be fair, he did the work and deserved to be paid.
I was the one who passed on it.
Fast forward a year.
I couldn’t help but check what happened to that purchase.
As I knew someone else must have bought it and done the development.
Sure enough, someone did buy it.
I looked up the value of the property.
Let’s just say that I’ll summarise my feelings with a simple word: “ouch.”
It had gone up in value… by A LOT!!!
I reflected on this experience.
What can I learn from this?
Where did this go wrong for me?
Here are my conclusions…
I made the decision to buy another property emotionally and then made the decision to pull out of the purchase emotionally.
The high of the win on the first property and the low of the fear of my environment both guided my actions.
I never make good financial decisions when my emotions are running hot in either direction.
I’ve since made sure to get my emotions in check before making big decisions.
On this week’s podcast, Grant and I share more of our financial mistakes and regrets.
There are some powerful lessons within these stories.
All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.
00:00 Welcome to Business and Investing
01:10 Investing in “good” businesses and taking advice
07:25 Finding businesses and investments that you can control
10:16 How fear holds you back from grabbing big opportunities
16:00 Your goals play a role in decision making
20:35 The downside of lending your money
27:31 How financial mistakes can help business owners learn and grow
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