Realvest Property Management hosts a book club for businesswomen in Pearland once a month in our office. We spend our time networking, bouncing ideas off each other, and discussing books that bring valuable insights into our individual business experiences across a wide array of industries. Our book for April was The Psychology of Money by Morgan Housel. This book offered us insights into the emotional and behavioral factors that can influence our decision-making when it comes to money.
Here are a few of my personal key takeaways from the book that helped me understand the psychology of money as it relates to real estate investing:
1. Our experiences shape our perception of value
The author noted that our experiences and environment shape our perception of value. This is particularly relevant in real estate, where factors such as location, amenities, and neighborhood can greatly influence the perceived value of a property. Understanding how our experiences shape our perception of value can help us make more informed investment decisions and avoid falling prey to irrational biases.
2. We tend to overestimate our ability to predict the future
Real estate investing often involves making predictions about future market trends and property values. However, we tend to overestimate our ability to predict the future. This can lead to overconfidence and poor decision-making, such as investing in a property that ultimately doesn't perform as well as we had hoped.
3. Our emotions can cloud our judgment
Real estate investments can be very emotionally driven. We may fall in love with a property or become attached to an investment strategy that we believe will lead to success. However, our emotions can cloud our judgment and lead us to make irrational decisions. It's important to remain objective and consider the facts when evaluating real estate investments.
4. Timing is less important than we think
Many investors believe that timing is everything when it comes to real estate. However, the author argued that timing is less important than we think. Instead, he emphasized the importance of taking a long-term perspective and focusing on the fundamentals of the property and its location.
All in all, this was a great read and one that really flipped the perspective on things that are ingrained in us from childhood or maybe even out of our control. By understanding the emotional and behavioral factors that can influence our decision-making, we can make more informed and rational investment decisions. Whether you're a seasoned real estate investor or just starting out or just someone who is looking for a good book on improving your financial position, I would highly recommend The Psychology of Money.
Our next book club for Pearland Women in Business will be May 16, 2023 at 10 a.m. at 2404 S Grand Blvd Ste 100, Pearland, TX 77581. This will be a special Mother's Day edition of our monthly book club, and no prior reading is required. Join us for networking, breakfast, and some shared stories from Mothers of Influence.
