Dealing with the fear of debt

If you’re like the majority of Brits who have been brought up to fear debt, there are ways to bring your thinking into the 21st century.

Replace self-defeating beliefs with empowering values.

The first step in changing your debt mindset is to recognize your financial attitudes and beliefs, and replace those that disempowered with empowering ones. The disempowering beliefs come from things we’ve heard as children such as ‘we can’t afford it’ or ‘rich people are greedy. You grow up subconsciously thinking the same things but you don’t want to let yourself become this.

Change your attitude towards debt

The choice to invest in property is optional. It’s not the compulsory care and home that many of us strive to achieve. For this reason, the idea of spending money on a non-compulsory asset –and risk losing everything we’ve worked hard for – can be scary. The solution to this is forcing you to think of the property as an asset only. To get here, you must determine whether you see property investment as a risk or an opportunity. I believe the only way to view property investment as an opportunity is to begin with something that is affordable and manageable for you. You can use this to build up your knowledge and this takes most of the risk away. But make sure you quantify your risk with numbers and work out your cash flow. If you can manage that cash flow for the next 10 years, where is the risk of that?

Surround yourself with like-minded investors

People will always be influenced most by those in their family and social circles. For the novice investor, these will be your parents, friends and colleagues. These influences often create a comfort zone, which can generate a psychological barrier for investors. Stepping out of that comfort zone – especially when it involves taking a financial risk – can be a challenge. To overcome this, all novice investors should take the plunge and immerse themselves in an environment of like-minded property investors. By surrounding yourself with risk takers and successful property investors, you can expand your knowledge bank and open your mind to the opportunities of property investing – instead of the risks. All property investors need someone to help them get over this. A mentor can be thing person.

Using a mentor

Replacing lifetime’s habit of disempowering beliefs with a new mindset of empowering beliefs will require effort and reinforcement. Old habits die hard, and your subconscious conditioning will lead you back to less risky decisions and therefore outcomes with less benefits. The best way to keep your empowering beliefs strong is to have a mentor. Your subconscious is always being conditioned to choose between deeply routed emotions and logic. Interestingly, emotions will always win because they re ingrained. The key is that the successful property investors play to win, while the average Brit plays not to lose. A mentor can help you learn this.

The benefit of having mentor is that you can learn from their mistakes and triumphs in the property investing market. Your mentor can introduce you to their trusted contacts and help you to grow your knowledge and psychology as an investor.

You should associate with people in the same head space – those who can help you move forward and who are positive, people who think the glass if half full and not half empty. Have a mentor who can help you move forward and mix with people who look at the big picture, and who come from abundance rather that scarcity.

The professional property investor is very well read. They read everything from statistical articles to newspaper and books. Their mindset almost gets to an obsession stage. They have spreadsheets and files, and they know who the commentators are when they want to ask questions. The follow properties and regions over a period of time and almost treat it like a second job. One of the key points of difference between a professional property investor and an amateur is that the professional doesn’t allow the psychology (in the emotional sense) to affect any of their decisions – making.

A professional property investor is quite cool, rational, passionate and even quite brutal in the way they view their investments. A lot of property investors say that they make the money on the purchase rather than the sale. So, in this, having a cool head, making rational decisions and not being swayed by emotions is very important.

The psychology used by successful property investors can almost be seen as a scientific process. Rationality, research and voracious reading are their tools for making the final decision. Professionals do their research – they make it their hobby. They act like sponges and will accumulate information before they leap in for the kill. Whereas a non-professional will go for a drive up the coast, fall in love with a place then rationalize afterwards why it is a good investment. For the professional it’s all about business.

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