“The more we value things outside our control, the less control we have.” – Marcus Aurelius
The real estate market is booming, and I am asked daily for my predictions about where the market is heading. Do we have more room to grow? Have we reached a ceiling? Are we in a bubble? Where should I place my money? In long-term rentals? Short-term rentals? Commercial? Retail? Multifamily?
As an active real estate investor for over 35 years, I understand the questions and anxiety. I hear them daily from my investor clients. I constantly study the market data, draw my best conclusions, and proceed accordingly. I am very disciplined about learning and doing everything that can be learned and done. But then I let go. As every investor knows, this business is filled with the unexpected and uncontrollable. Investing is much like playing poker… there is a lot of hidden information in the cards that are facedown. We can read the game, know the probabilities, and make our best predictions. But that unexpected card can change everything, altering the direction of interest rates, inflation, employment, and every other aspect of investing. Uncertainty is the fact of the investor’s life.
“If you want a guaranty, go buy a toaster!” – Clint Eastwood
I am often asked how I handle the stress of the unknowns, uncertainties, and volitivity of investing. They ask why I always seen relaxed. Why I have never allowed the ups and downs of investing effect my time with family, my vacations, or my participation in my favorite activities (for me that is endurance racing).
Through my decades as an investor, I have experienced every conceivable market condition. I’ve watched my investments flip from being a gold mine to a sinking titanic, and then back to a gold mine again (and sometimes back again). I’m asked, “How does one relax and enjoy the thrill of life through all this volatility?”
For me it comes down to the teachings of Marcus Aurelius, and his buddies Seneca, Epictetus, and the gang. The ancient stoic philosophers, from a couple thousand years ago.
Stoicism
“There is only one way to happiness and that is to cease worrying about things which are beyond the power of our will.” – Epictetus
The Stoics believed we are in control of how we process life events, and where we choose to focus our time and energy. It is a system that works for everyone, regardless of status, wealth, or opportunities. Epictetus grew up a slave, while Marcus Aurelius was the emperor of Rome. In my own life, I used these principles when I started from nothing, and continued as I built a large personal real estate portfolio. Through all the years, and all the ups and downs, the stoic philosophy has worked for me.
The stoics taught that we must clearly understand the distinction between events we control and events we do not control. And the only thing we truly control is ourselves. We control our personal will. We control our desires, passions, disciplines, and actions. And per the stoics, these are they only places worthy to invest our energy. We should waste no energy or time worrying about the things we do not control, such as the market, economy, interest rates, or the hundreds of other factors that consume most people with stress and anxiety.
Our job as investors is to do the research, make wise choices, and follow the disciplines. But never worry about the outcome. Doing so improves nothing and destroys our happiness. The stoics implore us focus on process-oriented thinking rather than goal-oriented thinking. A process of doing what is right, and letting the results fall as they may. And by emphasizing the process, we detach ourselves from the emotional roller coaster of market ups and downs. We then maintain a balanced mindset and discover lasting happiness.
Ultimately, it is within our power to decide how we feel toward every challenge and obstacle. As Epictetus said, “Happiness only comes if we cease worrying about things which are beyond the power of our will.” Waste no time on the things we do not control.
We must train our minds to choose happiness and tranquility, regardless of the circumstances. That doesn’t mean we are to be blind to events. It simply means we must find happiness regardless of the circumstances.
When investing, always remember the difference between what you control and what you do not control. And understand that the things you don’t control cannot control you. You are the master of your opinions, thoughts, feelings, and actions. You are the master of how you feel, how you respond. No one can influence you without your consent.
Live in the Present
“Give yourself a gift, the present moment.” -Marcus Aurelius
Stoicism also emphasizes the importance of living in the present moment, as you find contentment regardless of external circumstances. When it comes to real estate investing, it means focusing on the opportunities and challenges at hand rather than dwelling on past mistakes or becoming overly preoccupied with future outcomes. By staying present, you can make more informed decisions and appreciate the journey of investing, rather than being consumed by worries or regrets.
Stoicism in Real Estate Investing
“We suffer more often in imagination than in reality.” – Seneca
Uncertainty is an inherent aspect of real estate investing, and Marcus Aurelius encouraged embracing it rather than resisting it. Recognizing that no investment is entirely risk-free, investors can adopt a Stoic acceptance of the unknown. This acceptance allows them to plan for contingencies, conduct thorough due diligence, and establish resilient investment strategies. By diversifying their real estate portfolio, investors can mitigate the impact of unforeseen events and reduce the vulnerability to market volatility.
Conclusion
Real estate investing, guided by the principles of Marcus Aurelius and Stoicism, encourages a balanced and mindful approach. By focusing on what is within our control, embracing uncertainty, practicing patience and discipline, and adhering to ethical investing principles, we can find tranquility and wisdom in our real estate endeavors. Remember, real estate investing is not just about financial gains, but also about personal growth and contributing to the well-being of communities. As Marcus Aurelius said, “You have power over your mind, not outside events. Realize this, and you will find strength.”
We would do very well to the wisdom of the ancients.