Investments That Appreciate, Part 2 Is real estate right for you? feature Will Wong is the director at CORE Investment Solutions Inc., a real estate investment firm based in 6ANCOUVER AND SPECIALIZING IN helping individuals and compa-nies build hassle-free real estate portfolios. He has written a report called The Strategic Real Estate Investing Report, and if you would like a copy, he can be reached at [email protected]. n the first part of this article, I touched on several reasons real estate invest-ing is something that many should consider. In the second part, I will approach the topic from a different perspective and look at why one should not invest. There are risks with all investments – including real estate invest-ments. Although real estate has historically created vast amounts of wealth for many, it’s not suitable for everyone. I will highlight some factors of real estate investing that have caused justified hesitation in some investors. Just as there are people who swear by real estate investing, there are also a few who are not fans. As with any plan, it is important to be objective (consider both pros and cons, and minimize emotional attachment) when exploring all types of opportunities. No matter what the type of investment, ignoring potential drawbacks does not mean the risk elements don’t exist – and don’t be fooled, risk exists in everything, whether you are made aware of it or not. Nor is ignoring risk being objective or prudent. It can lead to participation in opportunities that are inappropriate for you. Ill-prepared investors could experience much frustration simply because they weren’t made aware of potential drawbacks in advance and, therefore, aren’t able prepare for less ideal periods. Luck aside, there are controllable elements that are crucial for increasing the prob-ability of success. There is a simple formula of which successful investors (and business owners) are always aware. They relate risk to the amount of expertise (often viewed as a combination of knowledge and experience) and time they have available to devote to any venture. Less expertise or time that one has to devote to managing and monitor-ing usually equals greater risk and vice versa. This simple formula can even be used for other situations like fixing a car, building a bridge or running a business as well as making an investment. Savvy investors know there is always a chance of success even with no preparation, knowledge or experience (also known as speculating). However, if a person does not have the knowledge or experience nor the time to commit to ongoing active participation in the investment, and does not utilize available expertise and time of others, there will be generally a significantly greater exposure to risk. From this, there are essentially four options available: UÊ Don’t participate at all and hence you will not be exposed to any risk. (The argu-ment can be made that missing out on a good opportunity is a risk in itself, but that is for another discussion.) UÊ Just do it anyway. This approach is where one just accepts the increased risk that comes with participating with little knowledge and time involvement. For these individuals, they feel they are at least involved and “you can’t win if you’re not involved at all.” UÊ Spend the time to acquire the knowledge, gain the experience and actively par-ticipate in managing the venture. UÊ Work with someone (or a company) who has the expertise and systems in place and have them do it for you. www.canadianchiropractor.ca I Will Wong s#!.!$)!.#()2/02!#4/2 | MAY 2011
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