This week I took the next logical step forward with my business – ‘Emma Lockwood Finance’ – and decided to move into my own office in the leafy bayside suburb of Elwood. This is an incredibly exciting (and slightly nervous) time for me. Today’s blog looks at the challenges inherent in making the decision to ‘take the next step’ – whatever that may be.
The decision to lease my own space with street signage was difficult. It involved many hours of weighing the pros and cons and asking myself (and my bank account!) whether the business had really reached a level to justify the risk and the expense of taking on a lease and all the associated outgoings. However, my philosophy has always been that the right decision is usually the most uncomfortable one. Moving out of your comfort zone is never easy but is imperative for growth – both personal and financial. A crucial step in deciding to open my own shopfront was that of examining my budget and seeing where I could ‘trim the fat’. I couldn’t justify taking on massive new expenses without first ensuring that I could budget to support it.
So frequent ‘business lunches’ will become occasional, meetings in coffee shops (with the accompanying large soy latte) will be replaced by meetings in my shiny new office, and my settlement gifts will be a teensy less generous (but still fabulous!). And of course, I’ll work harder.
This got me thinking of all my clients who are first home buyers. First home buyers always have to find areas to ‘trim the fat’ in their budget as often they are boarding at home with Mum and Dad or paying relatively modest rent in shared accommodation at the time of applying for finance. I had a look over my database to figure out just how many had approached me for preapprovals to purchase their first home in the last 12 months and the percentage of those that actually ended up buying. The statistic staggered me. Only 20% or – 2 in 10! When I took couples out of the equation and looked only at my female clients, it was even more shocking – 1 in 12.
If I think back to the loan interviews where I sat with these women and talked about their hopes and dreams of owning their first property, there is one thing they all had in common – fear. Many of the conversations I had with these women had common themes running through them, such as:
- ‘I really want to own a property, but I also want to keep travelling. I’m not sure how I can do both.’
- ‘I want my first property to be modern and renovated and in the same suburb as I’m renting in, but I can’t afford that.’
- ‘I’m just about to buy a new car, so I think I’ll just put all my savings into that instead.’
- ‘I’m so used to saving X every fortnight, if I have a mortgage then I won’t be able to save any more.
I am usually able to counter these fears with some objective reasoning:
- ‘You are still saving, it’s just that your savings are now going into a house rather than a bank account’
- By all means buy a new car, but perhaps spend $15,000 instead of $40,000. In 2 or 3 years it’s possible that you will be able to use the equity from your property to purchase that $40K car outright’.
- If you want to keep living in this suburb then why not keep renting and buy an investment property in a cheaper suburb?’
Unfortunately though, the statistics tell us that whilst these clients are financially ready to buy, they are not mentally ready. They are not prepared to move out of their comfort zone and take a risk that mean sacrifices for the short-term in exchange for a financially secure future. As the old cliché goes – no pain, no gain. And in the case of the first home buyer ‘no gain’ seems to be the winner. The challenge of the finance broker is how to help our clients overcome their fear of pain.
My long decision-making process over taking up a shop front and growing my business is a gentle reminder of how difficult overcoming fear and ‘taking that next step’ can be. It’s one that I’m sure will be best for me in the long run, however daunting it might initially appear.
Please support my new endeavour and encourage me in developing my business . I’ll certainly return the favour and help you achieving your next slightly scary but necessary life goal. Thankyou for your support so far, and I look forward to welcoming you into my new office!