What if I told you there's a book that's been on the best-seller list for close to 2,000 years?
It’s been translated into virtually every language, read by everyone from politicians to sportspeople and CEOs, and holds every bit of relevance today as it did when it was first written around 2,000 years ago.
It’s a playbook for success that can be applied to our personal lives, careers and financial circumstances, and it’s not The 7 Habits of Highly Effective People or The Barefoot Investor.
No – it's The Art of War by Sun Tzu.
And it’s touted as the most influential treatise on war ever written.
It has not only inspired military commanders all over the world – it’s also had resounding effects on politics, sports and business over the years, with many business schools and top-tier firms classing it mandatory reading.
Now, I've had difficulty reading it, because it reads a bit like that scrawl you find inside fortune cookies.
And I disagree with the basic concept that everything is a conflict and should be treated as such – what an exhausting way to view the world!
However, there are some great lessons that property investors can learn from Sun Tzu The Art of War especially if you define victory as achieving your investment objectives and the enemy is defined as any movements in the economy and property markets that stand in your way
Just as you wouldn’t go into battle with a blindfold on and one hand tied behind your back, you shouldn’t be wandering into the world of property investing without being adequately prepared.
So, take the lead from Sun Tzu and use the ancient wisdom in The Art of War to give you a head start in the investing game by examining 6 of his rules:
1. When I let go of who I am, I become what I might be.
Self-limiting beliefs, lack of confidence, scarcity mindset… any of these sound familiar?
These are some of the most common thoughts that are holding you back.
Whether it’s in life, business or property investment, hanging on to negativity and only seeing the risks and dangers will only see you attract more of the same into your life.
Remember… your thoughts lead to your feelings, your feelings lead your actions, and your actions lead to your results.
This means the results you achieve in the outside world are direct reflection of what’s going on in your mind, the way you’re thinking.
That’s why a lot why I write a lot about the psychology of success.
It’s just as important part as the strategic part of your investment journey.
You see… We all drive around with one foot on the accelerator and one on the brake.
We all have empowering beliefs that move us forward and limiting beliefs that hold us back.
So it all starts with recognising our limiting beliefs and our poor habits and removing them and replacing them with more empowering beliefs and rich habits
Start by rewriting those scripts that shuffle on repeat through your head – “I’ll never be successful”, “investing is only for wealthy people”, “we could never afford that house/school/car/holiday” – and flip them into something aspirational and goal-driven, broken into small, achievable steps.
2. Every battle is won before it is fought.
I’m always big on the idea that preparation is key, and when it comes to investing in property, channelling your inner boy scout can be a game-changer.
Attaining wealth doesn’t just happen, it’s the result of a well-executed plan.
That’s why every property investor should start with a building a strategic property plan to suit their needs, timelines, risk profiles and goals.
Planning is bringing the future into the present so you can do something about it now!
When you have a Strategic Property Plan you’re more likely to achieve the financial freedom you desire.
3. Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
Military leaders need to nail both the strategy and the execution to win a war, and similarly, investors need to employ a strong overarching strategy, enacted via well-honed tactics, to build a successful portfolio.
Your strategy might be to build a portfolio of high growth properties to replace your personal exertion income and leave a legacy for your children.
Your tactics could be to learn all you can about finance, the economy and our housing markets, build a team of professionals around you, set up the correct ownership structures and ensuring your finances are ready to go.
One without the other is a recipe for disaster, so take the time to think about what your strategy and tactics actually are, and whether they complement each other.
4. In the midst of chaos, there is opportunity.
People who survive and thrive in difficult times are those who seek out elusive opportunities and use them to their advantage.
Remember Warren Buffett’s most quoted saying: “Be greedy when others are fearful and being fearful when others are greedy.”
In an economic downturn like we’re currently experiencing there is always a transfer of wealth form those that are running scared or bunkering down to those who are able to find opportunities amongst the chaos.
I’m currently seeing innovative investors look for hidden property gems with features they can spin to create “pandemic appeal”.
For example, the wants and needs on a buyer’s wish list have changed since the start of the COVID-19 pandemic.
Home offices and gyms are now a must, and outside space, however small, is a commodity.
Suddenly that tiny courtyard becomes the perfect yoga or mediation spot with the addition of some leafy plants, while that awkward corner is the ideal spot to install a built-in desk and shelves and style as the ultimate work-from-home space.
5. If you know the enemy and know yourself, you need not fear the result of a hundred battles.
Insider info is your best friend when it comes to successful property investing.
So it stands to reason that the more you know about the economy, the property, the sellers, and the local market area at the time of purchase, the more successful you’ll be.
Can you find out why the vendors are selling, and use it to your advantage?
If they’re motivated to achieve a quick sale so they can move on after a divorce, for example, they may be open to a lower offer if you have your finance ready to go right away.
Do you know that huge infrastructure projects are in the pipeline, and can snap up a property or two cheaply before other investors cotton on to these developments and the area booms?
What you know could save you – and eventually, earn you – big bucks, if you apply it wisely.
Similarly, it’s important to know yourself – and you must be honest!
If you know you’re a sucker for a period property with massive reno potential, but you’ve been carried away in the past and made far less profit than expected, then take a level-headed friend along to the inspection to ensure you look at the opportunity with both eyes wide open.
6. Opportunities multiply as they are seized.
Every big property mogul started out without a single dwelling to their name and, over time, leveraged their early successes to achieve exponential growth.
Once you’ve cleared the hurdle of securing your first investment property, the only way is up – build some equity, add to your portfolio, and watch your empire grow.
Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia's leading experts in wealth creation through property and writes the Property Update blog and hosts the popular Michael Yardney Podcast.
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