Set Your Goals in Stone, but Methods in Sand…
Happy EOFY to all us Aussies and Kiwis, and happy Independence Day to the US! It certainly will be a strange time for them, with what seems to be very low-key celebrations if any for what is generally a very popular time in the US.
Even here in Melbourne, with some suburbs having full lockdown again, it is a stark reminder that this pandemic event is certainly not going to disappear anytime soon.
Given this, we also cannot keep our heads in the sand ‘hoping’ it will blow over and need to make sure we look at the new reality, and what that might look like.
One of the words being thrown around a lot lately is ‘pivot’. I guess the actual definition is to turn sharply, but it is being more used in a business sense to indicate that businesses have had to ‘change tack’ as it were, and find other ways or methods of generating income.
From a personal or family standpoint, I think that it is important that we do the same. Finding alternative methods to generate income is going to be one of the most important tasks we could do right now, especially with many people’s primary income (business or employment) struggling through current conditions.
In the investing space, this would be called diversification. Having your income come from diverse streams is the safest route. If one particular stream starts to struggle, the others may still be strong.
From our personal standpoint, it is as important as ever to maintain focus on our goals. We cannot let external forces, particularly those out of our control or sphere of influence, affect our end results.
What we can do though, is ‘pivot’ and look at other methods of obtaining our goals.
For instance, if your goal is to own 5 investment properties within the next 3 years (an admirable and achievable goal) then you need to hold firm to that, but maybe change the methods you were going to use to achieve that goal
If you were originally looking at the BRRRR strategy, whereby your purchase, renovation, rent, then refinance funds out and repeat – if that is more difficult right now with lenders struggling, then the Flip strategy or what we call the Cash Generation strategy of purchasing, renovating and selling a property might give a better return right now.
Then say 12 months down the track, markets tighten and selling properties becomes more difficult, it may be pertinent to switch back to a BRRRR strategy to keep the train moving.
Your destination should always be the same, but maybe the path you use to get there can be flexible and move with market conditions as you see them.
Keep your goals carved in stone, but your methods in sand…
You got this!
Happy Investing all and have a great weekend!!