What Are You Afraid Of?

Don't let fear stop you from reaching your financial goals

By Jordan Taylor

Think back to when you learned to ride a bicycle. Chances are, you were excited and afraid—excited because you wanted the experience and the freedom being able to ride a bike offered and afraid because you knew there was a chance you could fall off and get hurt.

Investing in real estate creates similar emotions. People get excited about the potential opportunities and benefits, but they're afraid at the same time. The fears that might stop you from investing in real estate are more complex than the ones that concerned you about learning to ride a bike, but they are every bit as manageable, says Russ Whitney, founder and CEO of Whitney Information Network, Inc.

Whitney, the bestselling author of Building Wealth (Simon & Schuster), Real Estate Millionaire Mentor (Dearborn), and the Real Estate Millionaire Mindset (Doubleday), says that fears are natural and normal, but "you can't let fear cripple you. If you're going to achieve your dreams, you have to understand and deal with your fears."

The most common fears among would-be investors, Whitney says, are the fear of failure and the fear of ridicule. Almost as common is the fear of success.

"People are afraid they'll fail, afraid that they'll lose money," Whitney says. "They're also afraid they'll be ridiculed for even trying."

Turn on the light

The way to deal with those fears is to illuminate them. "Think of a child who imagines a horrible monster under the bed or in the closet. The easiest way to dispel the child's fear is to turn the light on and let him see that there is no monster. Many adults are held back by fears that are no more real than a child's imaginary monsters—and those fears will go away if you just illuminate them," Whitney says.

The way to illuminate the fear of investing is to shine the dual lights of logic and information on the situation. Whitney says that when he began investing in real estate, his well-meaning father-in-law would say things like, "What are you going to do if all the tenants move out? What are you going to do if all furnaces break down or all the roofs start leaking?"

Without question, those are scary thoughts. But, says Whitney, "I realized they were no more than the adult equivalent of a child's imaginary monsters. People have been renting properties in America for hundreds of years. Will all the tenants move out just because I buy a rental property? Of course not."

Whitney says the best way to deal with fear is with knowledge. "The reality is that you will have tenants move out. You may occasionally get a bad tenant that causes you problems. You may have to fix a leaking roof or replace an air conditioning unit. But what's your upside? What do you stand to gain by making the investment? If you know your market and you understand the fundamentals of evaluating, purchasing, and managing property, you don't have to be afraid," Whitney says.

Another fear-conquering technique Whitney recommends is to put potential problems in perspective. "Let's say you're considering buying a small apartment building but you're afraid of how you're going to handle the maintenance and tenant issues, and that fear is stopping you from making the purchase. Ask yourself this: If someone gave you the apartment building, would you figure out a way to deal with the maintenance and tenants? If the answer is yes, then your fear is groundless. Don't use fear as an excuse to avoid action or even sabotage yourself." As far as the fear of ridicule goes, Whitney points out that a few successful deals will take care of any ridicule that might come your way.

Are you afraid it will work?

What about the fear of success? "It's ironic, but the fear of success often comes when you've overcome the fear of failure and accomplished a few of your goals. Suddenly you're afraid that you won't be able to sustain your success and keep going," Whitney says. "The solution is to develop a plan and a schedule that will let you grow into your success. Most real estate investors start with a single-family house or a duplex—not a 100- or 200-unit apartment building. Do those smaller deals, gain the practical experience, continue learning, and your confidence will grow and you will comfortably move up to larger and larger deals."

Will there ever come a time when you won't be afraid at all? Not likely, says Whitney. "Whenever you do something you've never done before, it's only natural to be afraid. But recognize your feelings for what they are and use logic and reason to deal with them. Educate yourself about what you're doing and prepare for contingencies. With knowledge and confidence, it's easy to overcome your fears and achieve your goals."

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