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The Mathematician and the Investor


For years during consultations I’ve promoted the theory that property investment is all about the maths.
Like a cash flow forecast for a new business, you can calculate the likelihood of renting, where the risks lie, what contingency you need etc.
You can spend months if not years looking for the ‘Perfect Deal’ if you have very specific goals.
I just had an accountant pull me up on my mathematical methodology with a joke!


A mathematician and a physicist agree to a psychological experiment.
The mathematician is put in a chair in a large empty room and a
beautiful naked woman is placed on a bed at the other end of the room.
The psychologist explains, "You are to remain in your chair.  Every
five minutes, I will move your chair to a position halfway between its
current location and the woman on the bed."  The mathematician looks
at the psychologist in disgust.  "What? I'm not going to go through
this.  You know I'll never reach the bed!"  And he gets up and storms
out.  The psychologist makes a note on his clipboard and ushers the
physicist in.  He explains the situation, and the physicist's eyes
light up and he starts drooling.  The psychologist is a bit confused.
"Don't you realize that you'll never reach her?"

The physicist smiles
and replied, "Of course! 

But I'll get close enough for all practical


I dutifully sniggered and asked how this related to property.
You can use mathematics and a formula to show you what the ultimate investment would be, but, you could wait years for it to appear if you a too specific. Like the mathematician you would think you would never get there.


The investment that is available now, starts to make you a return from now.
e.g. 20% off now and 5% growth a year. Buying this now gives you 30% in 2 years and you can gain rental return in this time too.


If it takes you 2 years to find an ‘Ultimate Deal’ of say 30% off a property you have missed out on rental income and effectively the market rose 10% so it is not truly 30% off anymore.
I have taken this point on board as it rings very true.


Buying today = Returns from today

Discuss your reqirements and the mathematics today!

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