Trading vs. Investing: The One Variable Every Investor Needs, But Few Are Willing to Wait For

Learning the Hard Way: The Cost of Short-Term Vision

Think of the most successful real estate investors you know personally, such as the grandpa who bought on Lake Tahoe 40 years ago, the friend’s dad who owns the warehouses their business is located in, or the family who retained their Florida beach condo from the ‘80s. Their real estate asset story arc is usually one involving a “slow and steady” theme. 

We certainly have proven our ambition, capability in renovation, design, and resourcefulness in acquiring real estate—except when it came to maximizing returns. Although each was “profitable” on paper—had we held even a majority of our properties—we would have at least a million-dollar RE portfolio before the age of 40. 

Why didn’t it work out? Blame it on a lack of cohesiveness, long-term vision, and investments in locations on timelines that matched our lifestyle. Professional investors—effectively, individuals or corporations that raise capital—might have a different strategy, but for the majority of individual investors, maintaining a long-term commitment is the path of least resistance to a positive and meaningful wealth shift. 

Every trade comes with expenses and inputs, not all of which are financially quantifiable. In several of my examples, I quite literally spent years DIYing the properties myself with zero construction experience, or even tools for that matter. Today, I can pour a slab, frame, run electrical, and do plumbing and finishings, but I cannot get my 30s back. 

Cultivating Patience: The New, Long-Term Plan

With that said, I do consider my crash/cash course in blue-collar skills worthwhile. It cost me several years and equity, but I’m rapidly catching up and am much happier and better prepared to execute my refined long-term investment plans. 

With what I learned “failing,” I could now build a house from scratch myself—and I plan to, once my current and most recent primary purchase is paid off. The goal is to eventually convert our seasonal home to an STR and contribute all proceeds toward accelerated satisfaction of the mortgage. Once it’s free and clear in 15-ish years (or sooner), I’ll either pay cash or take out a construction loan to build a more substantial custom dream home. 

Since I was able to acquire the home with $2,700 out of pocket (more on that later), our total out-of-pocket contributions over the life of the loan will be incredibly marginal in comparison to the anticipated rate of appreciation and value of personal utilization.

The eventual STR rental income or cash flow would not make a meaningful difference in our income, but a free-and-clear riverfront cottage on acreage 20 minutes from Bandon Dunes Golf Resort in Oregon, with very strong redevelopment potential when we’re entering (early) retirement age, sure will.

Leveraging Lifestyle and Principal Paydown

I have another theory about STR investments: An underappreciated investment aspect is one where, within a 10-20-year period, a substantial portion of the principal can be satisfied, usually in an optimal location. 

As importantly, we’re realizing our rural dream of homeownership now (when we have the energy) instead of saving it for retirement. In fact, our BNB in Mexico has allowed my fiancé to work considerably less at her day job and focus on herself and her interior design business. Granted, we’re sacrificing the immediate savings, but our businesses, assets, reputations, and freedom are growing as a result. 

What was the missing mindset that Buffet exemplifies? Patience. He famously said, “Someone is sitting in the shade today because someone planted a tree a long time ago.”

The Ultimate Investment Rule

There are many methods to trade real estate, but far fewer, or more proven profitable than prime assets over a long duration. 

One of my mentors is a real estate attorney and manages a literal billion-dollar portfolio for some of the most recognizable developers in South Florida. Their advice to him was whether he should sell an asset unexpectedly. To sell only if and when it allows you a substantially greater or conducive opportunity that you can’t afford otherwise, and to think twice as hard about selling an asset as acquiring it. 

A long-term real estate mindset is a smart investment strategy that enables investors to make (or not make) meaningful moves in any market.