Flavor of the day vs. foundation
Which type of investors are you?
There are many ways to build a real estate portfolio.
The best place is to start with an investor’s objective:
Do you want to have a secured retirement to protect you from rising inflation?
Do you want to supplement your income?
Do you want to build generational wealth?
Do you want to retire early?
Each of these objectives result in a very different approach one can take to build their portfolio.
One common mistake I noticed is misalignment.
Someone may say they want to build a real estate portfolio to have a secured retirement.
Except, they ended up investing in projects that are "flavors of the day".
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What do I mean by "flavors of the day"?
These are the type of investors who are the storm chasers.
They go where the actions are hot at the moment.
They see opportunity in a market, they flock there.
In few short years, the market gets too crowded, making the return less.
Then they sell and go after another market.
Another storm to chase.
Another "flavor of the day".
Can someone make good money doing that?
Absolutely.
Just like there are the stock day traders who go in and out of the market and make money based on short term trends.
We've seen how certain stocks shoot up because some people are hyping it.
Only to see some to crash afterwards.
Could one time the market and make good money?
Also yes!
But that's not the way to build a secured retirement.
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A secured retirement portfolio is one that you can count on, not one you need to sell today and buy tomorrow.
My mentors and people who are 100x smarter than me have all built their secured retirement and generational wealth through a "foundation" portfolio building approach.
So far in my life, I have 3 real estate mentors and they have all built a multi 8 figure real estate portfolio.
All 3 came from humble beginnings.
All 3 doesn't go after the "flavors of the day".
All 3 built their portfolio using the "foundation" building approach.
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Take Warren Buffett for example, he is famous for buying stocks and keeping them forever.
He doesn't chase after what's hot today, or what's going to be hot tomorrow.
He buys great stocks and companies and then sit on them.
Building a solid foundation.
While people are going crazy over AI stocks at the moment, he owns boring companies like Coca-Cola, BNSF Railway, GEICO Insurance, Dairy Queen, Benjamin Moore, etc.
Maybe AI is the future, maybe AI is a fad.
No one knows.
But I can bet you a lot of money, that in 30 years from now, people will still drink Coke, ship products on trains, buy insurance, eat Ice Cream, and paint their houses.
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Next week, I'll share with you how you can use the "foundation" building approach to build a real estate portfolio.
Any thoughts on how to build a real estate portfolio using the "foundation" building approach?
Reply to this email and let me know what you think.
Eric Chang
Calgary, AB
August 27, 2024
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