I love my mum. She taught me a lot. Especially about Property Data. I am almost certain mum was talking about property data when she drummed these life lessons into me at a tender age. Given it's Easter (not sure if that has any correlation at all) I though I would share her best thoughts on the matter.
1 - "You'd forget your head if it wasn't screwed on."
It’s amazing how markets forget. Despite when data is singing a clear supply demand song, we think things like “this time its different”. Data shows that trends in property are long, but also that they can and do reverse. We need to watch the data and learn to interpret it to see future trends by comparing to decades of previous market movement, not just months or years.
2 - "What if everyone jumped off a cliff? Would you do it, too?"
The desire to be part of the herd is strong. Think about your next BBQ, how will you explain your investment choices to your best friend? What will be the look you get? It’s really tempting to just buy what everyone else is buying.
I don’t like to rag on the media but they at times have been complicit in this. Loads of people start heading in one direction, even if that one direction ends up being off a cliff like lemmings. Journalists forced to create more content are desperate to tell a story that support their industry. Media companies derive their livelihood from ad revenue. This revenue often comes from large property developers with vested interests in huge new unit developments.
The result in property can be a huge pressure for TV and News outlets to present new off the plan apartments as great investments. Often they are not. My apologies to the marketing firms, but data driven decisions to target the right (often established, not brand new) properties based upon real metrics for supply and demand is a better pathway in my humble opinion.
3 - "It's no use crying over spilt milk."
We all want to go back in time to when our grandparents were little and buy cheap properties for a few dollars each. We can’t. Data is far easier to interpret in reverse, but we don’t have that luxury. However, I have found by studying the cycles of the past we can better observe the same trends, get a feel for datapoints in the present and plan for the future.
4 - "When I was your age, I had to walk ten miles through the snow, uphill, by myself, to go to school."
(2nd Disclaimer, it was actually Dad, more than Mum who said this one, but it is still good. I don’t even know how long 10 miles is. Maybe property data can tell me?)
I don’t like to play the age card (mostly because it makes me feel old), but I began investing 15 yrs ago. It was in the early days of the internet. Data was really hard to get. I knew even back then that good information would lead to good purchases. I had to purchase my suburb reports one at a time and print them out. They cost about a day’s wages (each). I would drive down my chosen streets with a pile of paperwork and a highlighter looking for comparable sales and make notes. I can still remember the agent’s face the first time I said - “It’s not worth more than $XX because the one 2 doors up just sold for $XX” He wasn’t expecting a kid from interstate to say that. Priceless.
These days data is of higher quality, for less money, and accessible in far more convenient manner. There are no excuses to make choices in the dark.
5 - "Go play outside! It's a beautiful day!"
The really good news. Data tells us when the sun is shining. And mum made sure we always made the most of sunshine. Don’t sit on the sidelines or mope inside when the weather is good. Certain sellers of doom have lost their own money and (worse) cost other’s fortunes proclaiming wholesale market crashes that have not eventuated. We all have to make a choice. A choice to be in the market, or not. No one can take that choice from you, the risk of doing either remains yours. Whether the next thing in the market is price rises or price falls, or a flat market, the newspapers probably aren’t going to predict that so well for you ahead of time. The best way I know to sleep at night is to learn to think for yourself about the data, because it doesn’t lie.
There you have it. 5 Lessons from Mum that shape the way I use Property Data each day. Useful?
(Ok, so maybe mum wasn’t ONLY talking about property data when she handed down these evergreen snippets of wisdom while we were growing up. She might have had more general life lessons in mind, but I like to apply what I learn, and she loves me, so I know she will forgive me for taking a little poetic license.)
Dad went to school in Melbourne, it didn’t snow that often and am pretty sure it wasn’t 10 miles walk to school. I think he was a little loose with the truth there, but the lesson is still useful and I use it with my kids now, it’s fun. The others were all solid, I promise.
PPS Thanks for everything mum - love you!