When is it OK to make ‘bad’ investment decisions?
Property investors are used to thinking with their wallet, but sometimes a bad financial decision is the right one to make.
In a recent episode of Property Investing Insights with Right Property Group, husband and wife investor duo Victor and Reshmi Kumar reflected on one of the toughest choices they had to make.
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Midway into their property investment journey, Reshmi Kumar’s father suddenly fell seriously ill while temporarily visiting Australia on a tourist visa.
“There was no insurance,” Victor Kumar recalled. “We were ruthless in saying, ‘Well, that property, the purpose is to better off our family – not just for me and Reshmi, but for the greater family as well.”
In ordinary circumstances, the couple would have never chosen to sell off a property in that market, but given the emergency, they “had no qualms selling it in a market where selling wouldn’t have been advised”.
“We were able to take care of him all the way through to his demise and pay those hefty medical bills,” said Victor Kumar.
It’s a prime example of a dilemma that property investors often face: when do you focus on optimising your property portfolio, and when do you make “poor” property decisions in order to meet more important goals?
For the Kumars, property is not an end unto itself, but an enabler.
“When we all invest, we all think about the money, but what does it really give us?” asked Reshmi Kumar. “It gives us time, the quality of life you have – that’s the thing.”
Smart Property Investment’s Phil Tarrant noted that some armchair investors appear to love property, but he and the Kumars have a different point of view.
“I don’t love property,” said Tarrant. “I probably dislike property. Honestly, I love the result. I like the idea of what it creates, but I have no affection whatsoever for the idea of it.”
From Tarrant’s perspective, property is first and foremost “a vehicle for wealth creation”.
According to the Kumars, property is also a vehicle for lifestyle enhancement.
When she first began exploring the idea of property investment, Reshmi Kumar was driven by one core goal.
“The idea was when I first came in and I saw what people were doing, it was just early in the morning, dropping children in their pyjamas to childcare centres. And we wanted to not be able to do that to my children, who I wanted to raise myself and not to put them in childcare centres.”
Now, thanks to her extensive property investment journey, Reshmi Kumar has achieved her goal.
“I’ve always had time,” she said. “That’s the one thing I always compare myself with a lot of other people: I’m always free, I’ve got a lot of time. And why I have that time is because I don’t have to go to work.”
Listen to the full conversation with Right Property Group here.
