The 1% rule

I read an interesting article, The 1 Percent Rule: Why a Few People Get Most of the Rewards | James Clear

Wanted to get people thoughts on:

- does the article apply to property investing?
- if so, what do you think separate the top property investors from the crowd?

 

Pareto Principle or, more commonly, the 80/20 Rule applies to most areas including property investing.

Why? that is the nature of things. There are the masses and there are those above the masses.

 

Property investing is like football, there are a bunch of couch potatoes sitting down watching millionairs make money.

Most people are spectators and speculators and only the players are actually getting rich while providing entertainment for the potatoes

 

Lol, I liked this analogy. It's usually the couch potatoes who are the ones yelling at the rule makers (umpires) and investors (players) to put more effort in or do better, too.

 

Very funny..... Xenia

 

In my experience the top players have an intensity about them that most other people do not have. They give their full attention to what is happening, they are engaged in every aspect and make sure they challenge ideas continuously.

 

I reckon the Pareto rule fails 80% of times.

 

Great article. You just have to be that little bit better than everybody else to get the rewards. ... like my Sunday night volleyball team. We make all those close wins and we've won something like at least 70% of finals.... but we aren't significantly stronger than the other teams...

 

Beautiful!

 

The simple fact that we are here reading this forum puts us all in the top 10%. Then those that read, learn and take appropriate action start down the track of becoming the top 1% in property investment.

Thanks for sharing the article. It gives me motivation in my business to provide better service and better products. With the ultimate goal to win out against my competitors in every chance I can!

 

The problem arises when the 99% rise up and cut the heads off of the 1% because they are sick of going hungry.

 

Have you heard of the 2% rule, this is what property investors in US chase, generally speaking they only look for high yields, this would also cover their mortgage (principal/interest). Mind you, harder to do now that property has been soaring

What exactly is the 2 percent rule?
The 2 percent rule is very simple to calculate. If a home costs $100,000 with no repairs needed, the rent should be $2,000 a month. If the home costs $100,000 and you have to do $20,000 in repairs, then the repairs would make the cost basis $120,000 and you would have to rent the home for $2,400 a month.

If you think those are incredible rent to purchase price ratios you are right. If you think it is also virtually impossible to find properties that meet the 2 percent rule you are also right. I know 2 percent rental properties exist, but they are usually low-priced properties under $50,000. I think you can make money with low priced rentals, but I also know you can make a lot of money on more expensive homes that do not meet the 2 percent rule.

 

Back on thread... the article is a light bulb moment. Thanks @pwnitat0r.

 

From memory @Gockie, you have had a few 'light bulb moments' in recent times.

Are you causing Australia's energy crises?

 

Yes, quite possibly. Would like to have solar panels but the partner apparently confirmed with council we'd need to get a heritage consultant to put any solar panels anywhere on our roof!!

What a bugger!

 

Over the last 60 years, I feel I might have been the beneficiary of "accumulative advantage" more than once.

 

A very good read, I am surprised there is not much comments on the article!

The articles' teachings are much more relevant to those with businesses I suppose, but also relevant to most aspects of life.

Also reminds me of the analogy of a line, if you are 5m from a target but the line shifts 1 degree, you will still hit the target.

If you are 5000m from a target and your line is of by 1 degree you will miss by quite a lot! It's relevant because in life you need to be on track (on line) as early as possible.

 

Bit like planes on Auto Pilot. They spend more time off the flight path than on it, as they continually autocorrect/zigzag across the line to their destination/target.

That is the power of having a plan (a flight path), continually monitoring your progress against this plan and taking corrective action when one deviates from the plan.

Applies to everything in life:- one's education, one's career, one's finances, ..., one's life.

 

Great read, thanks for sharing. Very similar fundamentals to Slight Edge by Jeff Olsen.

Cheers,
Michael

 

I know and agree! Whereas I put up a thread about "That sugar film" recently and it got multiple times more comments on it than I expected.

Anyway, perhaps a thread rename like "You only need to be slightly better than your competition to get massive rewards" might have attracted more attention? Because people think the 1% is only the elite. But anybody can get into the 1% if they only are that slight bit better than their competitors....
Helps if you establish yourself as a leader early on too.