The importance of ‘TIME’ in the investment process

Boomers-Bank IRA-401K-Real-Estate Investing

Real estate investment is the ‘in-thing’ these days. With each passing day, more and more people realize that this is the way to go when investing money. However, most, if not all, of these people generally take the wrong approach when they start out with their investing career. Instead of focusing on all three principal factors required when making an investment decision, they tend to focus on one or, at max, two factors.

You might be wondering what are these three factors that we are talking about. Have a look at the equation below and make sure that it is burnt into your memory permanently:

INVESTMENT = YOUR MONEY INVESTMENT + LOANED AMOUNT + TIME

At first glance, this equation seems fairly straightforward and simple. However, you would be surprised to learn that almost all rookie investors tend to overlook the third factor, i.e. time.

True, there is no denying that you must carefully decide how much money you are going to invest as well as how much money you are going to borrow. These two factors are definitely important considerations, and in no way should they be taken lightly. However, for your investment to be a success for you, you need to take into account time as well.

By ‘time’, we mean the amount of time that you will use in making your investment. This is a vital concern and thus, should be treated as such.

The underlying advice here is that you shouldn’t be running around after a dead-end project. Hence, you should account for the time you are going to spend chasing a project. As you start out as an investor, time will be one of the factors you may have in abundance and thus you would be more willing to run around after an investment opportunity which is to your fancy. However, the more you progress in this field, the more expensive your time will become as compared to the other two factors in the equation. For instance, we all know that Donald Trump is loaded, so thus it’s not his money which is of as much concern to him as his time.

Similarly, you too have to account for the time you invest in your investment. Don’t, I repeat, don’t, go chasing after something you know you won’t get. Remember to always go with your gut instincts. If you get the feeling that it’s not meant to be, then instead of wasting more time and energy, walk away. Just like there will always be more money to be made, there will also always be more investment opportunities.

So think carefully whether or not the investment you’re pursuing is really worth you spending long days and nights worrying over. At the same time, don’t be too quick to write off an investment. Instead, mentally plug in the numbers in the ‘investment equation’ and then decide whether the investment opportunity in question is viable or not.

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Jafer Ali Shariff

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Web: http://blog.ira-401k-realEstate.com

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