When I started buying properties, times were so easy. The “self-cert” mortgage market was in full swing which meant myself and many of my unconventional or self-employed friends could jump on the property ladder, sometimes even with a loan of 120% of the property value! They were practically giving mortgages away back then.
This environment was perfect for me as I had just been through one of those big challenges life throws at you from time to time, and it had eaten up every penny of my savings and left me absolutely depleted.
So in a bid to transform my life for the better, I chucked in the day J.O.B., set up a houseshare management company and dived right in to becoming a HMO landlord.
It was all a flurry for the first six months as I furiously bought, refurbed, set up and filled houses with tenants. Until one day, I sat in the car out the front of a property I had just had an offer accepted on, and I began to have a meltdown. “How am I going to handle all of these properties? The tenants? The paperwork? The debt?”. My brother sat with me and patiently listened to my ramble of insecurities, giving me the assurances I needed, and (thankfully) marched me onwards to complete the purchase.
Afterwards though, this newly-felt burden weighed heavily on me and that day marked the beginning of an abrupt halt to my buying spree.
Six months later the credit crunch hit and the mortgage market dried up seemingly overnight, and for me, it was almost a relief that I wouldn’t be able to buy any more properties. So instead, I just sat with my new responsibilities until I grew comfortable with them. (And then I realised I could have handled MANY more properties, and kicked myself!).
But what was really going on with me at that time? You might suggest FEAR. Fear of growth. Fear of responsibility. Fear of being alone, or growing beyond the status/wealth/comfort zone of my friends. I have to admit, I certainly did feel this way.
I’ve actually since discovered a deeper factor at play here. I’ll even go as far as to suggest this was the REAL reason I’d slammed on the brakes to building my wealth, and the real reason I was overcome with fears and insecurities – I simply wasn’t hard-wired for it. Have you come across T Harv Ecker’s concept of the “Financial Thermostat”? My experience is a perfect example of it.
If you haven’t read “Secrets of the Millionaire Mind”, or come across the “Financial Thermostat” concept before, the idea is that we each have our thermostat set at a temperature that is ‘comfortable’ for us. When the temperature (our cash and/or asset supplies) drop below our comfort level, our internal ‘heating’ kicks in and we are motivated to get out and generate more money. Likewise, when the temperature is beyond our comfort level, the ‘cooling’ kicks in and finds ways to get rid of the surplus until we are back within our comfort zone.
This “Financial Thermostat” is a huge influencer on whether someone will keep hold of the wealth they come into, or if it will slip away from them.
Before building the HMO portfolio, I had hit a financial rock bottom in my life and was highly motivated to turn the temperature UP. Then, being fully absorbed in the building of my business and portfolio, I hadn’t noticed that the temperature had gone up much higher than what was usually comfortable for me, so the cooling commenced.
A common example used to describe the financial thermostat is the phenomenon of multiple-million pound lottery winners who return to being broke within a year.
So how is a ‘temperature’ chosen in the first place? As with most of our conditioning, this gets established in our formative years by a combination of our life experiences and our response to those experiences. Generally, we copy the pattern that is familiar for us, so if you find yourself regularly fluctuating between flush and broke, you might dig into your memories and discover money entered your family household in a feast or famine fashion as you were growing up.
If you saw there was “never enough” when you were a child, you’re likely to adopt a scarcity belief as an adult too.
We can also adopt other people’s beliefs as our own – usually people who were influential to us in some way (parents, siblings, friends). So if Mummy believed rich people were all “arrogant pigs”, it’s highly likely we wouldn’t want to become one of those rich people and be considered a pig by Mummy!
Can we change our temperature? Thankfully, yes! Self-awareness is a magical thing. When you realise that your conditioning was just a result of your child’s brain processing your childhood experiences, you can consciously choose to set new “rules” to support your adult self. You need to choose a new setting that is believable to you though. Let me say that again. You need to choose a new setting that is believable to YOU. No-one else. If you honestly believe you can double the temperature, then go for it, regardless of what anyone else may think. Likewise, if you honestly don’t believe you can instantly double your temperature, then change the setting to something believable. Remember, whether you believe you can or believe you can’t, you’re probably right.
Each one of us has a different financial thermostat. If you’ve been struggling to increase your wealth, take a moment to examine your own life experiences of money flowing in, money flowing away, how you save and how you invest – and I guarantee you will see some patterns. Then pluck out the negative, unhelpful, stunting patterns and get to work on re-conditioning that financial thermostat of yours. Any increased wealth will then have a better chance of staying with you.