Can a five minute exercise help you find investing success?
If Adam Leipzig is right, it could. In a recent TED talk filmed in Malibu, the film producer and creative entrepreneur posed five questions that can be answered in five minutes to reveal a person’s life purpose. And those same questions can help income property investors get a handle on the “life purpose” of their investing goals too.
Leipzig is the producer of numerous films and the founder of the Los Angeles Theatre Centre. His short talk focused on the quest many people have to discover their “purpose” – the organizing principle that guides their lives and actions. It’s not hard, he says, if you simply answer five key questions.
That idea echoes Jason Hartman’s Commandments for Successful Investing: get educated about investing, stay in control of your investments and don’t get suckered into risky deals. And taking five minutes to reflect on yourself and your goals for your life can help you clarify what drives your investing life as well.
Who are you?
Leipzig’s first question seems the simplest, but it opens the door for a lot of insights not just into your definition of yourself but where you could be headed as an investor. Your answer might be as simple as your name, or a self-definition such as “I’m a mom of three,” “I’m a new college graduate,” or “I’m a runner.”
But in all those things there might be clues to what you want to accomplish from investing. That new college grad might be looking far into the future with an eye to building substantial wealth. The mom might envision a plan that provides for her children.
Reflecting on who you are can help you figure out where to start learning about investing and putting together an investing plan.
What do you do?
The second question on Leipzig’s list is concerned not so much with your identity but with how you express it in the world. Most of us would probably answer that question with a statement of profession: “I’m a doctor,” “I teach high school,” “I work in a law firm.” Others might focus on actions that define them: “I paint.” “I build houses.” “I foster animals.”
But in all those answers, there are clues too about where you’d like your investing career to take you. Some extra income every month to cover bills? A large-scale portfolio with income generating properties in several areas?
There are also clues here to your profile as an investor. Are you a problem solver who likes interacting with people? You’d probably be a good hands on landlord who deals well with tenants and their issues. Or do you prefer the quiet of your studio or office, comfortable making decisions but leaving the day-to-day management of your properties to someone else you can trust?
Who do you do it for?
This question aims to shed light on the reasons you do what you do. Maybe you do what you do just for yourself, or to make a better life for your family, or to help those in your community. A teacher could say, “I do it for my students,” but also for her own family, for the community at large, and maybe even for the world.
For investors, it zooms in on the “why” of investing. What outcomes do you want to see for your investments? Who (including yourself) would benefit from your efforts to create wealth? And what are the steps you can take to create the maximum benefits?
What do they want and need?
The fourth question relates directly to the third and invites life purpose seekers to reflect on whether what you do achieves its intended purpose. If, for example, you’re working long hours at a high stress job to take care of your family, but what they want and need is more time at home with you, it may be time to rethink things.
In real estate investing, too, it’s important to clarify what you (and others) really want and need from your investments. Do you want to be an entrepreneur with a new business, or would you rather quietly collect checks every month while you spend your time on other things? Maybe you want a large portfolio of high renting properties but right now you need to get started with just one.
How are these people (and you) changed as a result?
The change you see as a result of what you do clarifies the purpose of doing it. And that change can be many things: a changed perspective, a different course of action, new ways to approach old problems, a new and better way of living.
For investors, this question works too – but it might involve a bit of projecting into the future. How will successful investing change you and the lives of those around you? It might mean the ability to fund a child’s education, create a comfortable retirement, live in a place you’ve always dreamed of, or simply stop worrying about money, which reduces stress in the family.
Recognizing what changes you want to see points the way toward making them possible: creating a long-term investing plan, getting your financial house in order so you can approach lenders, or learning more about real estate markets and how they work.
Adam Leipzig maintains that it takes five minutes to answer his five questions. For investors who want to clarify their goals, it might take a bit longer than that. But knowing your purpose in investing, as in life, puts you in the driver’s seat – and that’s where successful investing begins.
Leipzig, Adam. “How To Know Your Life Purpose in 5 Minutes.” TEDx Talk, Malibu. YouTube video clip. Accessed 16 Oct 2014
Read more from Jason Hartman:
The Jason Hartman Team