Episode Details

Have you made any mistakes in your investment career?

If you're an investor, you almost certainly have made some mistakes.

Nobody starts out as a great investor – property investment is a learned skill.

Today, I'm going to share with you one of the biggest mistakes I made early on in my investment career.

I hope you'll learn something from my mistake today.

I'm then going to have a chat with Pete Wargent about 3 demographic trends you need to understand as a property investor. I also have a great mindset message for you.

My Worst Investment Loss Exposed!

I'm keen to tell you the story of how I lost 100% of my invested capital many years ago, way back in the 1970s, and the investment mistakes I made which created this disastrous result.

But first I want to explain the 2 main reasons why I'm sharing this story.

• Losing investments can be great teachers.

You'll not only learn from the investment mistakes you make, but you can also learn from other people's investment errors so that you don't have to make the same mistakes yourself.

Most investors pay the market a huge learning fee in the way of mistakes.

Studies show that around 50% of investors who buy an investment property sell up in the first 5 years. Clearly, they've done something wrong.

And most investors who stay in the game don't make it past their first or second property, so clearly, they're not doing things right.

So why not learn how to avoid their common mistakes?

• Losses are a natural and normal result of making investment decisions.

Don't be so hard on yourself when things don't go as planned because the key to long term success is what you do when this occurs and the lessons you learn from your mistakes, so you don't repeat them.

Here are a few of the more obvious mistakes I made with this investment:

• I gave my money to a virtual stranger without doing enough due diligence
• I invested in something I didn't understand
• I bought a story rather than investment fundamentals.
• I was lured by the opportunity of making quick money
• In reality, I was speculating, not investing and risked money I couldn't afford to lose.
• I had no investment strategy – just a desire to get rich quick.

I learned many lessons from this experience including:

1. Not everything that glitters is gold
2. Sometimes your best investments are the ones you don't make.
3. Don't invest in anything you don't fully understand. I knew nothing about gold mining, so I was speculating rather than investing. I had no competitive advantage and there was no mathematical expectation for my investment strategy.
4. One of the worst things that can happen to an investor is to get it right the first time. I thought I was smarter than I was when in reality my investment success so far was in large part to a rising property market – a boom that made me look smarter than I was.
5. Don't become overconfident -the market will soon humble you.
6. I didn't understand the incentives of the so-called "advisor" who really had a vested interest which created biases in the recommendations he gave me.

My worst investment mistake was a cheap lesson

This investment was the first of many learning fees I've paid to the market over the years.

I've made a lot of mistakes and paid a lot of learning fees during my journey to investment success.

Nobody starts out as a great investor. Property investing is a learne