This was a tough week.
First I hear that the title on the property I'm in contract in needs a survey done because there were some discrepancies (approximately 1k down the drain unexpectedly).
Then I hear our bulk cable internet agreement at our Co-op has expired and the Co-op is unwilling to renegotiate it again ($60 bucks a month down the drain, $720 a year).
Then I hear my property manager still hasn't served the evicted tenants who owe me money (postponement of getting that money back, a few thousand dollars...for now).
Then I hear my property manager is delayed on finishing up a project that is already way past time, and he needs more supplies (another few hundred dollars for that).
Then I did my taxes. And well you can imagine what that means...
Let's just say my amygdala in my brain, the one that deals with fear and goes into fight or flight mode, has been going haywire all week! I have spent years trying to retrain it not to freak out but in moments like these all that effort is to no avail. Yep. My amygdala has gone rogue.
I'll be honest. I've always struggling with the fear of not having enough money. I know this about myself. Yes it's irrational. But I imagine I am not alone in feeling this way. I know that I naturally tend to lean towards having a scarcity mindset, despite not wanting to, because it feels instinctual for me. It is my default mode by nature.
Intellectually though, I also know that the reality is that there are an abundance of resources and opportunities out there. In reality I am by no means even near a position where I am unable to put a roof over my head or food in my stomach (which I am extremely grateful for, I promise). I'm independent. I'm educated. And I can provide for myself one way or another.
And logically, I know I do have the power to shift my own mindset over time and to move away from this old bad habit of freaking out about money when unanticipated spending pops up. But it's still a struggle for me which makes it a challenge to be an investor because that is a major part of being in the real estate game.
I've read many great books including: Feel the Fear and Do It Anyways by Susan Jeffers, PhD, The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life by Mark Manson and The Power of Habit: Why we Do What We Do in Life and Business by Charles Duhigg, to help learn more about this and get a hold on my thinking. But even though I am actively doing that mental work to overcome this mindset, somehow those same ol' fears and insecurities keep trying to creep back into my life. And during times like this, I wonder am I'm the only one who ever feels like this?
Loss aversion is real. There are enough documented studies to show that people
generally feel significantly more pain per capita when they feel like they have lost something than the amount of joy they feel when they receive something unexpectedly. Knowing this though doesn't make it easier for me to cope with. A sufferer has to take an active stance to overcome it, which is exactly what I am struggling to do right now.
Here are some exercises I'm taking myself through this week to help me deal with this anxiety from a recent series of unexpected costs. This is my game plan to refocus my mindset from a scarcity model to an abundance model.
Journal about the reminders of the safeguards I have put in place.
I literally spent my lunch break today bullet point journaling about the different ways I have prepared for this exact situation. It may be silly to others but it did calm me. It helped to shut down that voice inside my head, even if only for a short while.
I reminded myself that I:
live well below my means, always, so I'll be fine.
have an emergency fund for this exact reason, so I'll be fine.
have multiple streams of income for this reason, so I'll be fine.
have lived off of a lot less before and can do that again if need be, so I'll be fine.
know many people I know live off of less and I can too, so I'll be fine.
am engaged in long term investing and the money will be made back at some point, so I'll be fine.
know this is just part of investing in real estate and part of the journey, others have experienced it too, so I'll be fine.
know set backs slow me down, but they won't make me quit, so I'll be fine.
Repeated my Abundance Affirmations
I stole this one from Marie Forleo (thanks Marie!). When I feel like more money is flowing out than in (especially unexpectedly) I tell myself, "There is more where that came from."
I also pulled out my list of money affirmations that I created inspired by from Kate Northrop's book Money: A Love Story and read through them over and over again. I literally read and spoke them aloud while doing a power pose for 10 minutes.
And guess what? It worked. The anxiety started to subside a little. Even if it was temporary, it helps.
Calculated my Net Worth Progress and Entered it into my Tracker
Each month I track my net worth. I find it very motivating to see the progress that I am making. I also find it thrilling to look back at how far I have come over a year, or more. So I figured calculating my net worth would help me to see that even with these set backs, it is still going up. Maybe not as much as I would like, but my money is still working for me and that is reassuring.
I do this regularly, as I've mentioned before. But it always helps me to get grounded when I'm feeling anxious, overwhelmed or down in the dumps. Just being around people who are looking for and spreading that same inner piece reminds me that "This too shall pass."
Wrote my Gratitude List
I start each day by entering into my calendar the things that happened and what I experienced the day before that made me feel grateful. Often times it's the usual stuff: my husband, the pugs, my home, a steady job. Sometimes it's a little more specific, a funny text that made me laugh or the random stranger that fist bumped me on the train. I just want to capture those moments of feeling positive and optimistic. I figure the more time I spend thinking about it, the more time it will come to me naturally.
So I pulled out my trusty journal again and started writing. I filled up four pages of big things, small things, and everything in between. And towards the end I was reminded of how much I have now, that I wanted when I was younger. It made me feel proud and grateful of the progress I have made. And it reminded me that even if I lost everything tomorrow, I have the skills and determination to get it all back. And perhaps that is what I am most grateful for: the ability to cope and take care of myself. The "grit" as they say. Again, a feeling of ease and optimism started to spread over me.
Went for an "Opportunity Walk"
I live in a historical district that also has a main street which has a very active small business district partnership. All along Myrtle Avenue are business, mostly owned by single business owners, and they actively support each other and are very successful. There are new businesses opening up each year, and a few that close, but not many. Most of them have been staples in this community for quite awhile. Usually you can spot the businesses that are going to close because their business model is just a bit off.
Well, when I'm down or feeling less optimistic about money, I take a stroll down Myrtle Avenue to remind myself that there are entrepreneurs out there everywhere. There are many people, just like me, who are taking risks that are scary, facing their fears and succeeding. Looking at these businesses reminds me that there are a million opportunities or different ways to create a living for yourself and that starting a business is possible to do successfully, but you just have to be brave enough to follow through with them. Looking at these shops gives me hope.
And of course the universe provided as it always does through the form of a book (check out my previous post on books that helped change my money mindset here) that I was already reading called Crushing It in Apartments and Commercial Real Estate ; How A Small Investor can Make it Big by Brian Murray when I got to a chapter that spoke about managing the NOI of your property. I came across this passage:
The single most important step to effectively managing NOI is to constantly consider how your decisions, large or small, will affect the NOI over the long term. And while it might seem counterintuitive, you should note that in most cases, maximizing the NOI over the longer term means accepting lower NOI over the short term. This is because from an accounting standpoint, many value-creating improvements will be captured as expenses. Larger improvements will be capitalized and depreciated over the expected life. (page )
And then a lightbulb I needed went off: this is just where I am at; I'm in phase 2 of investing. This is how it goes. I'm taking the hits now so that down the line, the my properties and business will be more lucrative. I'm too small of a business to benefit from huge corporate write offs at this stage and yet I'm too big to write off my losses right now. This is where I recognize I'm stuck in the middle and the middle is where they gouge you. It won't always be that way for ever though. If I remain persistent I'll eventually move out of phase 2. But it's par for the course as you work your way through the process.
It's tough being in this space because it constantly feels like I'm "losing" money and there are always people out there trying to get their hands on a chunk of my profits but I have to weather the storm, trust the process and know that it will work out in the end.
Reached out to support Network of Investors
The final step to draw me out of this funk was to talk with other investors and share my stressors. Hearing their challenges helped me to feel less alone and to be honest, pretty grateful that my challenges aren't worse. One friend was engaged in a dispute with the neighbor over a fence on a property line, another had a misfortunate incident when installing a tub in her second floor apartment (you guessed it, water pouring down to her first floor tenant) and yet another spoke about having to tactfully deescalate a very tense situation between two tenants.
So a few unexpected bills are par for the course. There will be challenges. As the saying goes, I just push myself to stay the course and put one foot in front of the other.
I am curious though, what do you deal to anxiety when unexpected expenses pop up? Do you have the same fears about money as me? If so, any tips on how you handle it would be greatly appreciated to help me cope better! Comment below with ideas!