Game Plan

Here’s a scoop. At BiggerPockets we love talking about investing in real estate. Then there’s short and long term strategies. Some stay out of the real estate investment arena, preferring instead the role of banker — they like notes. They like dealing with paper, not people. However, what so often tends to get lost in the noise a bit are the underlying realities of our choices. Investors too often shuffle the various principles literally governing their financial future to the back of the room.

I speak often to groups about these principles. They should be front ‘n center at all times during the decision making process. Let’s lay them out first, then tackle ‘em one at a time.

The time value of money.

Opportunity cost.

Increasing your options over time.

The time value of money.

Always loved the ways this principle is explained using analogies. “Would you rather have a fast nickel or a slow dime?” is an oldie but a goodie. I was recently reminded of that one while on a business trip. ‘Course value, in and of itself can be interesting when a single asset can be viewed over very long periods of time. My favorite example of that is gold. 150 years ago an ounce of it would buy a much better than average suit. That suit today costs a whole bunch more, yet the same ounce of gold will buy it. Real value.

Let’s not get caught up in all the catch words used for this topic, net present value, future value, internal rate of return (a lie, by the way), etc., etc. Instead, let’s understand what counts on the most basic of levels.

More is better than less.

Sooner is better than later.

More, sooner, is much mo betta.

When analyzing your options at any given time, don’t get caught up in the always/never …read more