Some investors talk about what is hot, where is hot and what excites them. Unfortunately, they may be walking into a trap. Hot areas and strategies often have too much competition and it is way too late. What investors should focus on is often not too exciting. Emotions are not invoked, which is a good thing but the numbers just make sense which is the only thing that matters. All investors should focus on the following 4 things.
- Mitigate Risk – It’s not exciting, but investors must do their due diligence, eliminate and minimize every risk they can to ensure success. Quick high risk investments almost always are out performed by lower risk longer term strategies. Investing is not a sprint, mitigate risk and great things will happen.
- Maximize Return without increasing Risk – This is an important concept. A huge expected return does not warrant comfort with a huge risk. Risk has to first be mitigated, then maximize return without increasing risk. If you can increase return and decrease risk than double win!
- Cash Flow First – Many investors get excited about the big pay checks of flips. The most successful long term investors however take care of Cash Flow First. Take care of your cash flow first and the big checks will come.
- Duplicate Long Term – Find a strategy that works, improve and further mitigate risk, maximize return without increasing risk, then duplicate over and over. Focus on a long term strategy not a get rich quick emotional strategy.
Not exciting but business should be done based on numbers and informed decisions, not excitement and emotions. Focus on these 4 items and you will create long term cash flow, wealth and achieve success.
