Investing Outside of Wall Street – Making investment decisions

Recently, many people are voicing their worries about where the economy may be headed. Some of the main reasons include the following:

  • The unknowns and fear about Coronavirus, a worldwide concern.
  • The plunging Dow Jones Industrial Average on Wall Street.
  • The upcoming November 2020 presidential election in the U.S.A.

A few weeks before the DJIA plunged, a client of mine – a real-estate investor, like myself – asked if I were worried about the market in general and if the U.S. might be approaching a recessionary period. His key concern was that housing prices might be near the peak and that he did not want to overpay for properties. Valid points.

The essence of my response to him was as follows:

  • When it comes to investment, you’ll have to be your own judge as to what you believe is going to happen in the economy – and make your own decisions accordingly.
  • With that said, here is a peek into what’s in my head. Right around the time of the 2016 presidential election, I was convinced that the economy was ready to tank regardless of who became the president and that he/she was going to be blamed 100% on what would have happened.
  • My prediction was completely wrong.
  • In any case, I go back two decades when I first began worrying about where the economy was headed, which caused me to eventually leave Chrysler against my then boss’s wishes.
  • I decided to face the fear head-on, no matter what the cost. This, by the way, was the origin of what I have become today. No regret.
  • To the best of my abilities, I’ve spent the last decade and a half preparing myself to be able to withstand almost any conceivable worst-case scenario in the economy. Was it enough? Only time will tell.

My afterthought:

  • At its core, investing in real estate is all about understanding numbers.
  • At least in the Midwest, typically, rental rates fluctuate much less drastically than the price of real estate itself.
  • This means, once you understand how to secure your monthly POSITIVE cash flow, you know exactly up to how much you can afford to pay for a rental property in the location(s) you have identified.
  • To put things in perspective, even during the worst economy, people need a place to stay.
  • In other words, it does not matter what the general economic conditions are – so long as you are buying the property at a price that still enables you to make money in the area.
  • This is also the reason why those who are experienced – and have cash – go on a buying binge when the economy tanks and the price of real estate plummets. They don’t make their purchase decisions on things over which they have no control but, rather, on things they do. Simply put, they know their numbers.


Happy Investing!






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