Hi, Peter Jones, author, property investor, ex-chartered surveyor.
If you’ve been to my Facebook group or if you’ve been on my YouTube channel you’ll see that recently I did a video about 2008 and comparing it to what’s happening today with the Coronavirus and how I pulled the duvet over my head.
Somebody sent me a question which was basically can you give us some specific examples of lessons that you learned in 2008 which would be helpful today in 2020 and ongoing?
Yes I can, and I will.
I’m going to start perhaps at a point which might surprise you because there’s property lessons and there’s strategic business lessons which I certainly learned but the thing which really got me was actually stuff to do with my mindset.
Now that the property and strategic business stuff I will cover in a later video or later series of videos and it is important, but the most immediate problem I had was this.
Lesson number one: don’t panic, because the very first thing I did was panic.
Why did I panic?
It might be hard to imagine now because, you know, we’re in different times, and twelve years on we know the end of the story was that everything kind of worked out okayish for most people I guess.
But in 2007/ 2008 my world was collapsing.
The property market was collapsing because the banking system was collapsing. If the banking system is collapsing it means that the banks aren’t lending any money.
The property market is driven by money because purchasers need to pay sellers and they need money to do that and it’s mainly from the banks that they get money, and the whole thing was grinding to a halt, this was having a knock-on-effect with the economy, the economy was grinding to a halt, the governments were stepping in and bailing out banks in a way that we’d never seen before, until today obviously when it is they’re now stepping in and bailing out whole economies, but at that time seeing that the government stepping in bailing out banks was just beyond anything we’d really experienced in our lifetimes, and the whole thing was horrendous.
And my interpretation of it was that my world was collapsing because I had a sizeable portfolio and I could see that the way the property market was going I could see that values were gonna fall, I could see that I had the potential of going from a position where I had wealth in my assets being blunt about it to a position where perhaps I was negative equity and all of that would disappear and I didn’t know what the future held and I didn’t know whether I’d be able to cover my mortgage payments and all of this kind of stuff.
And I panicked.
Now first thing is that a lot of the stuff which I was thinking was actually irrational and was later proved to be untrue but my reaction to that the panic showed itself manifested itself in two main ways.
The first is that I hid under the duvet as I said in the last video. When I realised that sitting in bed or pulling the duvet over my head was not the right way to react, and by the way one of the downsides of pulling the duvet over your head and just lying there whimpering is that it gives you plenty of time to think. I mean you start thinking about stuff. If you’re like me you start thinking about the wrong kind of stuff and you start getting into apocalyptic thinking and that’s why a lot of the reactions which I went through were the wrong reactions, but eventually having lain there whimpering in bed with the duvet over my head I began to think about stuff that I could do.
Now this is what I wanted. I could see that my position had become very insecure and I wanted to create security and in my mind the only way that I could create security was to do it myself and I had to take immediate and massive action.
There’s nothing wrong with that in principle, and in fact in principle we should all take quick action. Quick implementation is a great skill to learn so you don’t prevaricate, so you don’t procrastinate, if you have a good idea crack on and do the good idea and if it’s a good idea then you want to put all of your effort into it and take massive action.
But this is the problem, I started doing stuff which was actually the wrong stuff to do. I started doing stuff which actually wasn’t serving me, I started trying to put together business ideas which probably were just not going to work that time, I started getting involved in things which I shouldn’t have got involved with, I started getting involved with people who I probably shouldn’t have got involved with, and I was doing all of this kind of stuff because I just wanted to fix the situation.
The reality is some situations are beyond your fixing, you can only do what you can do. It led me down all sorts of cul-de-sacs and blind alleys which I should never have gone down.
The frustrating thing is that now with hindsight I can look back and I can see that I wasted an awful lot of time and an awful lot of effort doing stuff which actually not only didn’t serve me but it stopped me from doing the stuff which I should have done because it completely ruined my routine.
I’m going to talk about this more in the next video, but it completely ruined my routine and I ended up not doing stuff which I had been doing up then which actually did serve me because I was going chasing these things which actually probably didn’t really exist.
It would have been much better for me to either have thought about it much more strategically and logically and thought about something which really would serve, rather than just going into kneejerk reactions and try and do stuff which at the time seemed like a good idea but if I just taken time to step back, if rather than panicking I’d taken a deep breath and thought right what is the best way through this situation? What do I need to do now? Then that would be much better.
This is the paradox because we want to take immediate action and want to take massive action and we want to fix the problems that we’re in and it may be that you’re watching this video and maybe your circumstances have changed and you want to change that so do it but at the same time just remember that maybe what you’re doing isn’t necessarily the best thing for you. Be strategic about it.
I realised, and I can see this now with hindsight, that probably for the first year after the credit crunch in 2008 I wasted my time and my effort so much that i would have actually have been financially better off staying in bed and just pulling the duvet over my head because I wasted money trying to start businesses which were never going to work in that environment. I spent a lot of time doing stuff which was never really going to work and which didn’t serve me.
It’s great taking massive action, sorry sounds like getting choked up emotionally, I’m not don’t worry, I spent a lot of time doing stuff which I shouldn’t have done but if you’re going to spend 12 hours a day for 6 months doing stuff which doesn’t serve you then taking massive action actually isn’t the right thing to do. So we need to be thinking about this. There’s the paradox.
So this is what I would say, a bit of advice, let’s pull this together succinctly into one line, don’t panic, don’t get into knee-jerk reactions, don’t try and fix everything today, you’ve got time, take a deep breath, look around.
At the moment we don’t even know how things are going to be in 6 months time and it may be in 6 months time things will be different and it may be more obvious in six months’ time what we should be doing.
Am I saying don’t do anything for six months?
No I am not, because that’s the paradox.
Do stuff which is going to serve you and that could be learning, it could be getting educated, if you know a business idea which you think is going to work then go for it, but if you’re not sure don’t get yourself down rabbit holes like I did, take a step back, be considered but also take action. I hope that makes sense.
Until next time, here’s to successful property investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://www.ThePropertyTeacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop