Gambler or Investor?

by, Tony Yap

Yes, Property is a good vehicle towards Financial Freedom.

Thus many people invest in Properties. But, let’s take a close look, are you an Investor? Or….. A Gambler….?

Gambling and investing are so totally different and yet they have similarities. What actually confuses people is the process as end results are almost the same. Place your money into something, sit around and watch things happen. Then you get your money back with profit (or not). Doesn’t this sound like the “investments” we make at the casino, 4D or Magnum? What if I were to tell you that buying property may be considered a form of gambling?

Yes, indeed. Don’t be shocked.

These are the 3 Big Questions you should as to find out if you are an Investor or a Gambler!

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Have done any study on the market trend?

Property Investment can be considered gambling or investing because there is no such thing as 100% guaranteed return investment in this world. Every investment has a risk factor, no matter how or what. It’s like driving along the highway. There is always the risk of an accident, right? But the risk can be minimised when we drive carefully and keep our eyes on the road and traffic (that’s right, don’t try to look at you smartphone or text while driving!).

 From my own observations, Property Investment GAMBLERS are people who invest without finding out the market trend and the developments going on in surrounding area or check what’s the best time to buy-in, what’s the rental yield and so on. They just buy, based on their gut feeling and pure luck. After having made the down-payment, they sit back, do nothing and pray that the property price will go up. When the property price does not grow as expected, they put the blame on the market.

Do you know the surrounding PSF and future development of the property?

On the other hand, true INVESTORS are people with a good fundamental knowledge of the property market, who know the upcoming surrounding developments, investment value, expected rental gain, expected capital gain and so on. INVESTORS take full control of their investments. 

They know exactly how to respond, regardless of whether the market is bullish or bearish..

How can Property Investment Solve my Financial Challenges?

I remember that when I was 27, I faced a critical financial problem and needed to get hold of some cash quite urgently. How? I went to bank and refinanced my housing loan. As my piece of property had gone up in value after a few years, I could get more cash by refinancing it and that solved my problem.

I could also cover the monthly repayments with rental from that property. Just imagine what would have happened if I had taken a personal loan instead. My Debt Service Ratio (DSR) would be higher because interest rate for personal loans is higher than refinancing. That would’ve made my life more miserable, wouldn’t it? This is my personal experience in my property investment journey.

I have met many successful entrepreneurs and, over the years, almost every one of them have used profits from their businesses to invest in property. Based on the facts I have mentioned above, I have consistently reminded myself to buy a piece of property every year and to strategise a way to generate maximum profit from it. But, hardly anyone gets rich overnight. Building true wealth requires middle to long-term investing and a diverse portfolio.

Don’t forget that real estate is an important part of the equation.

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