Why Emotions Can Lead To Poor Investment Choices

This is episode number 2138. In this episode, Jill and I are talking about making land investment decisions based on data versus feelings.  This week is all about land research. This is going to get a little fluffy, which I like.

This is good. We talked about this a little bit when we talked about fishing for new counties. At the end of the day, you might start with a feeling but it ends with data. You need to make sure you’re making smart decisions.

Each day on the show, we answer a question from our Land Academy member Discord forum and take a deep dive into land-related topics at your request.

Amy and Chuck wrote, “My name is Amy. My husband Chuck and I are new members of Land Academy. We live in Arizona and are thrilled to be part of this amazing group. With backgrounds in real estate and construction, we’ve always enjoyed buying and selling land. We’re excited to take our business to the next level. We’re here to be coachable, learn, and collaborate with the Land Academy community and build a profitable business. We’re truly grateful for this opportunity. We’re looking forward to connecting and growing alongside fellow members and looking forward to meeting all of you with gratitude. Amy and Chuck.”

Understanding The Land Academy Community And Its Benefits

I bet this was responded to by 40 people at this point.

They’re like, “Welcome.”

I put this in here so people who are not in Land Academy get a feel for your potential camaraderie. It’s not to sell anything. It’s a good group. It’s not like a regular social media group with a bunch of haters and all that.

We’re pretty focused. This is a good point to make. There are a lot of people that come into Land Academy that know nothing about this and there’s another large group of people that are into it. More people come into Land Academy who are very knowledgeable. They’re here because they want to make this an empire.

Of the responses to this, some examples are fantastic. One is like, “We’re in New Mexico and we’ve been real estate agents for 22 years. We bought and sold a bunch of property. We want to do that full-time now.” It’s a good group of people for the most part. There are always tiny little exceptions. I never thought that when we started this. I never thought we would meet so many successful people at different stages of success.

I did not expect the community aspect of this. I’m grateful. You think that you’re grateful for having the Land Academy community. I’m grateful for having you too. It goes both ways.

Jill and I don’t need to do this. For years, we have not needed to financially have this group.

We love it.

How Data-Driven Decisions Improve Land Investments

We’re here because we want to be here. This episode’s topic is making land investment decisions based on data versus feelings. This is our tenth year. I have to say we’ve probably done different versions of this topic maybe fifteen times. I’m sure Jill has a bunch of stuff to say. The very root of Land Academy started with me physically removing a dart board from our community office, throwing it in the trash, and saying, “We no longer have to make decisions about what we think is going to happen and throw a dart at this board. We can now utilize data to make these decisions for us.”

We no longer have to throw darts at a board to make decisions. We can now utilize data to guide us. Share on X

When I started this, we were pulling atlases off the wall to try to find property. It was way before Google or any other tool on the internet. We’ve done the full spectrum of, “It’s so cheap. We’ll buy it. I don’t care where it is.” We used to do that all the time. We didn’t even go through the motions of trying to find it all the way to ParcelFact which Jill and I developed a few years ago. That gives us the exact amount of data that we can make a preliminary decision on whether or not we want to buy it, like where it is, who owns it, how big it is, what the taxes are, and all the things that we need to assess to look at it.

The whole point of this is to not have to wonder what’s going to happen after you buy a piece of property. You are so informed. It is data-based and data-driven. You have all the facts or 95% of the facts about a piece of property, including the price. You know what’s going to happen on the sell side of the deal. What a luxury. I don’t know who else can say that in their business. You’re not like, “I wonder what’s going to happen next month. I wonder if anyone’s going to walk through my convenience store door. I wonder if my hotel is going to be empty or full next month.”

You talked about the convenience store door. I was talking about that with people and sending out mail. This is a little side note. I said, “The last thing you want to do is not send a lot of mail. It’s limiting your customers.” You’re like, “We’re opening a new convenience store. I have a new 7-Eleven store and I’m still figuring out how to work the computer, inventory, and all of this stuff.”

At 5:00 PM, you’re like, “I’m overwhelmed. I have to close the doors.” You don’t do that. You let them come in and you wing it. You’re staring at a pile of cash going, “I’m going to figure it out now.” That’s what you should do with your mail too. That is a little side note. You made me think of that. I wanted to share that concept with you.

Making these decisions based on data comes down to profit. It is everything. It’s, “How much money am I going to make this year?” I’m here to tell you that sometimes, there’s a thing that’s too much money. If you have too much cash coming in, guess what? It changes a lot of your tax things, how you’re placing money, and what you can do with it. You have to time this stuff. Every decision that we make may seem like it’s feelings-based because I’m involved but it’s not. It’s data-driven because Jack is involved, and thank goodness it is.

What’s the first thing you think of when I say that sentence, making any decisions based on data versus feelings? I’m asking you, but if you’re reading this, what’s the first thing that you think of?

The Role Of Historical Data In Land Buying

Using past historical data to tell me what to buy and where to buy it.

The first thing that I think of is, “Who the heck would make a decision that’s not based on data?” What decision am I supposed to make when I’m like, “What do I want for dinner tonight?” I don’t make a decision based on what I want to eat and what it’s going to taste like. I make a decision based on what’s the outcome of that.

That’s where we differ. I might say, “I want steak tonight.”

I’m like, “I like the red car, not the blue one. I’m not going to look at that. I’m going to look at which one deflects light and why. It’s hot in summertime here.” Every decision I make is always data-driven.

I have to admit we do that. I didn’t go into it thinking I knew what colors I liked in cars. Let’s hang with this for a moment. I go into things looking at resale value. I can handle driving around the yellow Ferrari but I’m pretty sure the yellow Ferrari is not going to resale as well as the red one or the navy blue. Trust me, I love blue. I’ve seen these beautiful blue Ferraris with the Palomino interior but I know the resale value is not going to sell as well as the red one with the black interior or red with Palomino.

How STEM Professionals Excel In Land Investing

The result of this is that we have a ton of people in our group who come from STEM-related businesses. There are lots of engineers and lots of airline pilots, retired and otherwise. There are a lot of people in former real estate careers who are tired of it. They’re tired of the social aspect and want to get down to, “Does the dirt make sense? Does the deal make sense? Can I resell it?” It is simple stuff like that. That’s what investment decisions that are based on data versus feelings are.

It’s nice when you do because the data tells you what to do. When you’re making a decision based on feelings, you don’t know until the very end if it worked or not.

If you’re making decisions based on feelings, you won’t know if it worked until the very end. Data tells you what to do upfront. Share on X

The older you are, the more of a chance there is that you remember a time when you had no data to make a decision. It’s frustrating as heck for personality types like ours. Back then, it was very frustrating. That’s why there were things back then called apprenticeships. They still go on in a lot of industries. The only way you could learn anything is by hanging out with somebody who has 30 years of experience.

Now, you can pull a device out of your pocket and find out the answer to anything in the entire world. There’s no reason in this day and age with our technology that you should be making decisions based on feelings unless that’s who you are. If you are a person who makes decisions based on feelings, there’s probably a better career for you.

The Shift From Traditional Learning To Data-Driven Success

What can end this for me? I don’t know what that is. Maybe a therapist.

I’m not knocking anybody. This is a STEM career. The entire medical profession is made up of emotions. That’s fine. It needs to be that way.

There’s data too. Your blood results with the data tells whether we need to do X or Y and put you on that vitamin.

You’re right. The actual delivery of care is very feeling-driven. That’s how it should be. With the delivery of education in primary school, there’s way more emotion in that than an actual data delivery, and that’s how it should be. I’m not being negative.

I’m giving you my opinion. I feel we should cut this show. This is a good ending. That’s my opinion and my feeling.

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