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In their efforts to make headlines it seems we never want for someone saying something silly about property investing.

In the last 7 days we have had the usual fodder of good cop, bad cop in our papers again. In fact in the same section on the same day was an article about how bad things were and another saying how fantastic things currently were.

I’ve talked about this often so it is nothing new.  However whenever I see so much of it I think it is good to remind you and myself that market sentiment is just that, sentiment.

When things are negative that drives prices down, which we like as investors.

And when market sentiment is positive that drives property prices up, which we like as traders.

So either way is good for us as long as we “observe and ignore” what we see and hear.

It is stoopid to make our investing decisions based on journalists.

What we need to remember and act on is long-term fundamentals and our own position.

So currently we are still seeing fire sales of properties and positive cash flow pre-tax possible.  So it doesn’t matter whether Bernard says prices will fall 15% or Olly saying the worst is over.

They could both be right or wrong, so the real issue is should I be buying/selling/trading now and if I should then what.

One good way to help control the emotional trigger jitters is to constantly remind yourself of 2 numbers.

The first number is cash flow.  What positive cash flow do I have now?  Your ultimate goal should be to have enough passive income so that you never have to work again so therefore we must regularly check whether we are moving towards or away from that goal.

Any investment opportunity that increases our cash flow is worth considering in any market.  I mean why wouldn’t you invest in something that pays you every week and moves you closer to retirement?

The second number is even more important and that is our overall net worth.

We tend to make a lot of investing decisions without considering this critical fact.

In fact most investors buy high and sell low in shares, forex and property because they react to a situation without consideration to their over all position.

Only our net worth is a true indicator of our investing success in my opinion.  Our net worth is real wealth that will sustain us over time and allow us to leave an inheritance for our children.

So when looking at a property deal for example add it to your bottom line and project it forward say 5 or ten years then see what impact it has on your net worth.  If it is positive then look closely at it and whenever you are panicked into thinking about selling it remember to look at what impact selling it will have on your bottom line.

I have fought hard many times to keep properties when the situation said I should sell because a paper loss has no impact on my net worth.  But crystallizing that loss removes the opportunity for recovery and can ultimately leave me penniless.

So get out a pad, your iphone or a spreadsheet and work out what you need to do to make both numbers acceptable in your life.

Stay Inspired and Stay Safe ~ Dean Letfus

The Wandering Investor

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