There’s an old story that tells of a pair of prospecting brothers. The two, having discovered a vein of ore, set out to stake a claim and retrieve their gold. They did well—the California Gold Rush had been kind to them, and the brothers happily collected wealth for some time.
One day, the vein of gold was gone. Distraught, the brothers picked at the site, but gave up when their futile efforts revealed nothing. Hoping to recap some of the money they’d lost in the investment, the two sold their equipment and rights to the claim for well below their worth. The brothers boarded a train and that was that.
The claim’s new owner was optimistic though, and hired an engineer to investigate the rock strata present in the mine. The engineer suggested that the new owner continue digging where the previous owner had left off. Three feet deeper, and he struck gold.
The brothers missed their chance at wealth by only three feet—a couple of hours of hard labor.
The same is true in real estate investment. Jason Hartman’s fourth commandment is simply to remain prudent—never failing to keep your long term goals in mind. Had the brothers remembered that they were saving for retirement, attempting to obtain financial freedom, or creating wealth, they may have found it within themselves to dig an extra three feet.
Of course, your risk tolerance might be different from your neighbor’s, and that’s okay. Whether you’re concerned with cash flow, appreciation, or tax benefits, your goals and comfort level should dictate your actions.
Your actions should always reflect your eventual investment goals, which likely requires having a plan based on education, financial resources, goals, and the advice of your investment counselor. Like the second claim owner who desired wealth and enlisted the help of an industry professional, you too can strike gold with a little bit of planning and hard work.
The second claim owner played it smart and got a good deal on a mismanaged piece of property. He put in time, educated himself, and sought the help of a professional and, as a result, struck it rich. (photo credit: clydeorama via photopin cc)
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The Jason Hartman Team
