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Go big or go home

Discussion in 'Investor Psychology' started by Omnidragon, 20th Feb, 2016.

  1. Omnidragon

    Omnidragon Well-Known Member

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    One of my sub 35 business partners - another financially independent type (ie doesn't need to work) - always said to me, "go big or go home".

    Lot of truth to that. Some people build electric cars, some make $100 million developments. If these people are doing it, you got to ask, why aren't I doing it. It's always more exciting trying to do that than to worry about work emails on Monday.

    Obviously like all things, rhetoric means nothing at the end of the day without action and a bit of luck. So happy investing as always, but don't let life wilt away doing nothing exciting.
     
  2. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Would love to live by that motto. 4 kids and 9 years in a stable job has made me more risk averse than I would like to be!
     
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  3. See Change

    See Change Timing Lord Premium Member

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    Survivior Bias.

    Lots of people start off with big plans and dreams , but few make it .

    The few who make it often don't realise how much impact luck had in their success and assume it was purely due to their skills .

    They assume if everyone else did what they did they would have been successful but that's not the reality of the world .

    cliff
     
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  4. Biz

    Biz Well-Known Member

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    You could do all that but like everyone else you can only eat off one plate and crap in one toilet.
     
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  5. ellejay

    ellejay Well-Known Member

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    It's only risky if you're gambling on values going up :)
     
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  6. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Nah, that's too risky for us :D

    We like the reno's but are more the buy and hold type. At the moment (and for the foreseeable future) it will be metro area's, as high a yield as possible (without going down the illegal granny flat path) and building up the offset on the PPOR.

    Not that we want to but.....in 15 years LOR would be a nice option to have :)
     
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  7. ellejay

    ellejay Well-Known Member

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    Well, I don't post much on here because my strategy doesn't fit with most/all :D For buy and hold to produce significant equity (unless gambling on values increasing) you need to buy under value and/or create equity through reno and my favourite - rent covers rates, insurance and mortgage on P&I :eek:
     
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  8. Omnidragon

    Omnidragon Well-Known Member

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    The easier way to do that, Elle, is to time markets rather than to buy when you can afford. Eg buy Syd/Melb after 90s recession, buy US/UK after GFC. Buy xxx now.

    Cliff - yes. Luck is huge. Anyone who has made millions and doesn't agree there's luck is lying to you. Obviously it doesn't matter how much luck you have if you never take a shot.
     
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  9. ellejay

    ellejay Well-Known Member

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    Yes, obviously if you don't have a time machine then you buy xxx that fits above strategy now. :rolleyes:
     
  10. EN710

    EN710 Well-Known Member

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    Would be interested to know your strategy :) I am still early in the trip and would be great to see what have worked for people.

    Would be nice to have the gut for "go big or go home" but I have always been risk averse. I think I'll have a heart attack on the way to go big. If I need to go from 0 to 100, a 1 tomorrow is better than staying 0, then improve everyday
     
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  11. ellejay

    ellejay Well-Known Member

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    Like I said, holding a property and putting your own money into it every week in the hope that it will increase in value is a risk. How much risk you can afford/want to take depends on your personal and financial circumstances. Carry on researching the strategies used by investors, and the actual outcomes. There can be a lot of fanfare around so and so has this many properties and this much income. When you look though it's gross income and they've been putting their own money in for years to hold negatively geared properties. Some have made gains, but you have to look at what they'd have gained if they'd just bought properties that covered all their costs in the first place. Plus the sacrifices they made to hold for that period.
     
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  12. ellejay

    ellejay Well-Known Member

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    Also, I totally agree that 1 is better than 0. Don't do stuff you're not comfortable with just because spending time on here makes you feel everyone else is buying and doing well. Chances are they're not. If your body is telling you that you're doing something too risky then possibly you are :) Keep reading and be analytical. Develop an excellent BS detector. :D
     
    Last edited: 20th Feb, 2016
  13. Omnidragon

    Omnidragon Well-Known Member

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    That's a good point. Go big or go home is probably an exaggeration by me. Downside mitigation is very important. You definitely don't want to go to 0.

    But if I had 1, I am prepared to risk 0.3 for 5 or 10, and keep 0.7 in my pocket. If I lose, I can still make a come back from 0.7.

    And when you get your 5, well I'm prepared to risk 3 for 20, and keep 2 in my pocket. Because there comes a point it's just a numbers game, so I can risk a higher percentage of what I have.

    If you think about these in terms of millions of dollars, it's probably not that crazy.
     
  14. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    I've always been of the motto, Go the extra mile.
    If you're going to do something, may as well do it well and give it your absolute best efforts.
    Over time, the cream rises to the top.
    Sure luck is involved, but a big break is inevitable if you persist.
    Once this is made a habit and an attitude, you can't be stopped.
     
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  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I've gone home and I like it!

    Why go big or try to? Go small and take it easy.
     
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  16. ellejay

    ellejay Well-Known Member

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    You have to be comfortable with whichever strategy you're using because you're probably going to be using it for a long time. Going hard is great, if you can do it but if you don't have the means or desire then just do however much you enjoy.
     
  17. keithj

    keithj Moderator Staff Member

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    As others have mentioned - Survivor Bias. For every 1 who got lucky - there are 100's who would say Mitigate Risks, Protect the Downside,....

    I'm actually in both camps - for the 1st 20 yrs of investing I protected the downside sufficiently for all the family to retire. And for the last 10 yrs I've lived by the Go Big or Go Home maxim, doing what I love. Being a s/w person, it costs only my time & v. few real $$$ to implement ideas that may make it big. Only one has had moderate success so far - the rest were complete duds. My current project has a v. v. small chance of getting to be the size of airbnb. If I was prepared to put a few $M towards marketing that might rise to only a v. small chance :eek:.
     
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  18. See Change

    See Change Timing Lord Premium Member

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    BTW Not everyone wants to go big . I'm happy with medium large . Easier to obtain with certainty . Less stress , more time to enjoy life .

    My nephew has a fried who was involved in a start up of one of the daily deal sites ( not sure which one ) and by the time he was 30 had sold for multiple millions . He has retired to a beach resort in a tropical country . My nephew spent some time with him and was chaperoning the girls for the guys new project which was " Beach Babes of ….. "

    Sounds like a dream come true , but he was bored …..less . Had negative memories of his home town ( because he'd spent all his time there busting his guts out ) and only appeared to enjoy him self when friends came to visit and he could party .

    Even what we've done has meant at times I've had to work harder than I would have liked at times in terms of after hours work .

    Cliff
     
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  19. MTR

    MTR Well-Known Member Premium Member

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    The thing is you can do both, and sometimes you don't really have a choice because we are at the mercy of the markets.

    All to their own, there is no right or wrong.

    MTR:)
     
  20. ellejay

    ellejay Well-Known Member

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    Well if he didn't enjoy the journey then no surprises if he's still not happy now that he's reached the destination. It helps if you can do something you enjoy while you're waiting to reach your goal. Mainly because you may never reach your goal or achieve as much as you would have wanted.
     
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