The middle class is trapped in the rat race because it doesn’t take risks. The only way out of the rat race is to take risks… Taking risk doesn’t mean taking a shot in the dark. Millionaires take CALCULATED risks… Millionaires overcome fear,” associated with risk, “and the middle class submits to it.” Millionaires tend to ask three questions when analyzing an opportunity with associated risk. “1. What’s the best thing that could happen? 2. What’s the worst thing that could happen? 3. What’s the most likely thing to happen? If you can live with the worst thing that could happen and if the most likely thing to happen will get you closer to your goals, then go for it!” The problem with a lot of people, when they take a risk, is that they base their decision on a best case scenario and don’t consider the worst case, or the most likely case, and frequently the most likely thing to happen is something that they can not live with, or will put them in a worse off position financially.
Unfortunately, I think a lot of people, my self included, got caught up in the real estate frenzy with purchasing investment property. Most of these people, again, my self included, only looked at the best case scenario. That property values would continue to go up, the rental market would stay strong, and we would be able to cash flow the property for a period of time and make a good profit, or flip the property and make a good profit. Well, we all know how that story ends, and a big part of this problem falls back to a lot of people not considering the worst case scenario, or in some cases even the most likely scenario and a lot of money has been lost as a result. Real estate is not the obviously not the only risk that people take and not fully consider the down side. Some other popular failed risks include Multi Level Marketing companies, dot com investments, the latest and greatest new stock option, and other get rich quick schemes. The thing about taking a smart, calculated risk is that it rarely gets to rich quick. It usually takes years and sometimes decades to make you rich. If you have taken a loss on an investment, I think it was Zig Zigler who tell us to chalk those losses up as “Tuition in Life’s University”, learn from those mistakes and move forward.
This last statement is a great intro into the next part of this chapter which discusses the three main fears you must overcome in order to be successful.
1. “The Fear of Failure. It is not a matter of if you will fail, it is a matter of when. Millionaires understand that failure is part of the path to success. They do not fear failure, they embrace it when it comes and become wiser. The reason the middle class fears failure is because it thinks failure is bad. Millionaires think failure… gives them the opportunity to learn and grow… Failure is one of life’s many teachers.”
2. “The Fear of Rejection. The middle class puts too much importance on the acceptance of others. We all want others to accept us. We also want to be successful. Here’s a key to success: you must want to succeed more than you want the acceptance of other people. Millionaires desire success more than they desire acceptance. In order to be successful you will have to take risks and, if you fail, some people may reject you. The funny thing is, if you succeed some people will still reject you… If you are addicted to the approval of people, this will keep you from taking risks.”
3. “The Fear of Loss. Millionaires play to win. The middle class plays not to lose. HUGE DIFFERENCE! Can you imagine if a football team played defense the entire game? Their chances of winning would be zero. If you fear loss, you will only play defense when it comes to your money and your chance of financial freedom will be zero. People who play not to lose are always saying they should have done this or that. The biggest gap in the world is between I should and I did. Millionaires can say, ‘I Did’. The middle class is always saying, ‘I should’. When you take risks, you may lose some money; accept it and go on. Just as failure is part of success, losing is part of winning.”
I am going to finish up this weeks e-mail with a quote from Zig Zigler dedicated to those of us who have taken a risk and failed. “You are doing better than good when you clearly understand that failure is an event, not a person; that yesterday ended last night, and today is your brand new day. You are doing better than good when you have made friends with your past, are focused on the present, and optimistic about your future. You are doing better than good when you know that success (a win) doesn't make you, and failure (a loss) doesn't break you.”
It's a Good Life!!!
Greg Novak MBA
Branch Manager
Eagle Nationwide Mortgage Company
Office - 386-756-8228 Cell - 386-846-6686 Fax - 386-756-8108
Web site - http://www.mynationwidelender.com/
Oh, by the way, if you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.
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