How to Have an Investing Mentality: Q&A with Paula Pant

By Andy Hayes

Whether you’re a finance novice or a well-practiced investor, today’s Q&A guest Paula Pant has great tips for you.  Her website, Afford Anything, is filled with not just tips and tricks, but actual experiments with reports that share how to increase your income and, as the name implies, ‘afford anything.’    You don’t have to be entrepreneurial to enjoy Paula’s perspective – so let’s dive in.

You have some great articles about building an “investing mentality” – could you, in your own words, explain what it means to have an investment mentality (or what you also call an ‘owner mindset’)?

I used to think that being self-employed and owning a business were one-and-the-same. I started my self-employment career as a freelance writer, and I thought — proudly — that I was a small business owner.

But soon I realized that my income was entirely tied to my ability to trade-time-for-money. I didn’t own any assets that would produce income while I slept. That’s a scary position; it means that I HAD to work in order to keep the lights on. That realization was an ah-ha moment: I needed to own income-producing assets.

Out of your 3 preferred investment vehicles – real estate, stocks, and building your own business – do you have a favorite? Do you think everyone should be involved in at least a couple of these? Explain.

Building your own business holds the highest risk, but also the highest potential reward.

Real estate — at least, the particular style of cash-flow-centered rental real estate investing that I specialize in — is relatively safer. You won’t become a zillionaire, but you also won’t lose everything. (Keep in mind that there are a LOT of investing styles in real estate, so my statement only applies to the specific style that I teach.)

As far as stocks are concerned, I’m a student of Jack Bogle’s index fund philosophy. Unless you’re willing to devote the time and brain space to decades of rigorous stock analysis, you’re better off parking your money in a low-fee index fund.

You offer a “pick your brain” service. Two part question: what’s the most common thing people pick your brain about (and what’s your usual answer)? And, what do you wish people would ask you about (and of course, tell us your opinion about that).

Most people want to talk about one of two topics: real estate investing or starting their own business.

I can’t say I have a “usual” answer, since their questions are so widespread — some people want to become Airbnb hosts; some want to buy their first rental property; some already own 6 properties and want to decide if they should buy another or pay off the ones they hold. Ditto with launching a business; I talk to people at every stage of the game, from idea to deep development.

You’re at a dinner party, and the host mentions to the group that you’re in the finance space. Another guest (that you don’t know) asks you what’s the best piece of advice you’ve learned since you started blogging. What do you tell them?

Create passive streams of income. Your ability to trade-time-for-money is limited. The best way to generate true, sustainable wealth is by building income streams that work for you, creating cash flow while you’re focusing on friends, family, freedom and fun.

Thanks Paul!  Folks, you can connect with her on Twitter or Facebook.

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