Have you ever had one of those moments when you instantly had buyers remorse after sharing with someone what you just purchased?
That was me after sharing with my accountant, who was also a real estate investor, that I had just “invested” $25,000 in my new real estate training program.
Honestly, it was our first really BIG investment besides our first home. We were young, dumb, and had access to credit . . . Seriously we should've known better when the slick monkey at the front of the room literally coached everyone in the entire room to call all our credit card companies and convince them to increase our limits.
We felt like ROCKSTARS. We got all 7 credit card limits increased & maxed out in a matter of minutes. This was going to change our lives; we were going to be RICH!
Fact: It did change our lives but not the way we dreamed. Instead, our nightmares came to life.
I was full of excitement as I tried to repeat to our accountant every word the monkey used to convince us to spend $25,000. That excitement quickly turned into the greatest remorse I had yet felt in my young life.
“Can you get your money back?” was the first question he asked. I quickly turned my contract over and it had been more than 7 days, so the answer was a big fat “NO.”
Then it was almost like I heard his heart break for me. He told me that I could learn everything I needed to know from books and that he would have rather seen me invest the $25,000 in actual property.
And the final blow was his question, “how do you expect to buy any property with all this debt?” My witty response, “we will learn how to buy no money down!”
That, my friend, was complete smoke and mirrors. Talk about powerful illusions. Looking back I want to slap some sense into my 24-year-old self and let her know that nobody should never ever max out their credit cards for anything.
When I hear that Other People's Money (OPM) is the quickest way to wealth, I completely disagree. The average credit card interest rate is 19-28%. Trust me when I say there was no way we could pay that $25,000 off before interest began accumulating.
Over-leveraging debt to invest is a dangerous game. One that I completely lost and I know many, many more who also lost big. The other thing I would say to myself now is that it is OK to say no and to walk away and think about things.
If someone is pressuring you to make a major money decision and you have to do it right there or you lose out, trust your gut!
I believe in abundance and if it’s meant to be, it will show up again somehow, but I will never be cornered into making a major financial decision again. I have learned that massive buyers regret is far worse than potentially missing out on a once-in-a-lifetime deal.
Be smart with your money; treat it with respect. Your finances should be managed like a business.
That may seem like an overwhelming statement, however if you want to take charge of your finances, it is a must. Over-leveraging your debt to invest is NOT a good game plan.
Pressure to buy something now is a sure sign that you should walk away and think about it.
Those were powerful money lessons I learned the hard way and my hope is that by sharing some of my biggest mistakes you can also learn from them without having to go through the school of hard knocks.