RATIONALIZING FEAR FIGHT OR FLIGHT

After contemplating how I can give back to new investors since I undertook real estate investing just two short years ago and only found Bigger Pockets earlier this year. In going through all the podcasts and forum posts, I realized that “Fear” is the common thread in the podcasts and other forum posts that is the big bad monster holding people hostage from moving forward or overcoming that same monster to become successful. Thus, I decided to write about my own fear and how I rationalized it to move forward with real estate investing. First, I was looking over my wife and I’s financial situation after being married for 20 years and raising two beautiful daughters, who were now teenagers growing in to strong women and were going to be headed off to college in just a few short years. I thought to myself, where did the time go so fast? I felt like it was just yesterday we were having the time of our lives in college and doing beer bongs! As I continued to evaluate our current state of financial being, I started to evaluate just how much money my wife and I must have stashed away in our retirement plans over the past 20 years and how much money would be available to help our daughters get through college in the coming years. As I continued to look at our retirement savings, true FEAR started to grow inside of me. We had accumulated a whopping $166,000 over 20 years of investing in mutual funds through our corporate plans! Our stock funds had gone in half back around 2001 and had never truly recovered and had not grown in 10 years. I thought to myself, the three legged stool of retirement that was taught to us by our parents and teachers was now down to one single wobbly leg! What is this concept about a three legged stool you ask, in our parent’s generation the retirement plan consistent of 1) a corporate pension 2) Social Security and 3) Individual Retirement Plans (including 401(K)’s). Corporate America has now all but eliminated pensions in favor of the less expensive 401(K) plans, which were never really meant to replace the pension program, only to incentivize employees to save for their own retirement. Social Security is on the verge of bankruptcy and elimination based on the massive retirees of the baby boom generation, so you can’t rely on this being part of retirement either. Thus, corporate employees are now stuck with a 401(k) where their employers match their contributions up to 6% to 8% if they are lucky! In speaking with most people that have these plans, almost all are only putting money way up to the amount matched by their employers! By this point in my thought process, I was in full panic mode with true FEAR. Here I am a 50 year CPA that had been caught up in raising children and living my life comfortably from day to day with a good paying job all these years, and time slipped by at the speed of light. On top of that, my wife is also an accountant! We are financial professionals and I should have known better than to get complacent and procrastinate looking at these numbers! But, like most American’s we got lulled into a comfortable life of steady paychecks, raising kids, etc. Then I further realized and rationalized that we were further behind financially due to the choice we made for my wife to quit her job and invest in our children during the formative years. Of course, this did not provide much comfort given our current and future financial situation. After this epiphany, I needed time to calm down and think of solutions. I decided to go with my wife to our local Costco to get groceries and walk around a bit. In my new state of awareness while walking around Costco, I suddenly heard a little old lady ask me if I would like a sample of sort of food. Which of course I did! But then I started looking down the aisles and noticed all these elderly people in food caps handing out samples! Suddenly, FEAR was back in full force. We were on track to become these same elderly people who would have to work until we die, possibly handing out samples or working as a greeter at Walmart! This post is getting a little long winded and the rest of the initial RE investment story will have to wait for another time, if anyone is interested after this rambling. To stay on the topic of FEAR and your first deal, run through the above scenario in your head, in your situation, and with your significant other. Then ask yourself what scares you more, taking some risk now and getting over the FEAR while you can still rebound and recover, or waiting until you are too old and no longer have the stamina or physical well being to do anything about your situation? This is what I call rationalizing your fear to take action! I hope this helps some new investors out there that are bouncing from seminar to seminar or from course to course. Education mitigates the risk, but at some point you just have pull the trigger and take a chance to overcome that FEAR that is strangling you. Ask any real estate investor how liberating and exhilarating it is to have conquered that FEAR. Let me know your thoughts out there or feel free to share about pushing forward and getting over the fear?