Back in 2011, I attended a conference on buying multifamily properties, and at one point, a speaker asked the audience to hold up their hand if they owned any investment properties. (I should stress that this was a seminar about buying multifamily properties, not about how to get started in investing). Only about one in every five hands went up.
I was quite surprised by this. “Why are these people at a seminar on buying 50-plus unit apartments if they’ve never even bought a rental house?” I thought. (I should also note that, at the BPCON, I’ve seen a similar question, and the results are usually the opposite.)
At one point in this conference, the speaker was trying to sell the audience on his quite expensive, one-on-one training programs and mentioned that someone told him she had already attended five of his conferences but hadn’t bought a single property yet. His response was, “You need to get into the training program.” And, of course, pay the hefty fee that came along with that.
Ugh.
This became something of a running (dark) joke between my partners and me. I even tried to (unsuccessfully) coin the term “seminaraholics” for people with this type of very expensive and apparently compulsive behavior: the type who buy book after book, listen to podcast after podcast, attend seminar after seminar, and pay for mentoring program after mentoring program, but never actually act on what they have learned.
Hard work pays off, so they say. And all things being equal, that is absolutely true. Unfortunately, not all work is created equal. Some may be even worse than useless.
Action Faking and “Hustle Culture”
M.J. DeMarco coined the term “action faking” in his book Unscripted: Life, Liberty and the Pursuit of Entrepreneurship. It describes doing things that make you feel like you’re making progress when you’re actually not. As DeMarco puts it:
“For the aspiring entrepreneur who wants to get rich, be his own boss, and blah blah blah, ‘action-faking’ is ordering cards from Vistaprint. Look at that, they say you’re a CEO! Woo hoo, you’re the head honcho of a zero-revenue, zero-customer, zero-asset business!”
Embed Instagram post instead of text: https://www.instagram.com/mj.demarco/p/BursFFpA_Tz/
Action faking is something that can permeate any part of one’s life, but it has become endemic in the so-called “hustle culture.” As James Jani puts it in one of his many excellent videos:
“The problem with hustle culture is it is about working hard for the sake of working hard… It’s about sounding like you’re busy and working toward success, even though you’re not achieving anything.”
As he sums it up: “Working hard is one piece of that puzzle. Working hard at the right thing is the final piece of that puzzle.”
Action Faking is Easier Than Making Real Progress
Two of my hobbies include playing guitar and learning Spanish. Many times, I have realized that instead of practicing these things, I’m just action-faking by going over words or chords or phrases or songs I already know full well.
Actually improving at either (or any other thing, for that matter) requires pushing yourself to do something you can’t currently do or can’t do well. This requires more energy and patience and isn’t as fun. But it is how you improve.
It’s much easier to just play a few riffs I already know by heart and then check off the box that says “practice guitar” and pretend I’m actually accomplishing something than to learn a new song from scratch.
Indeed, in the last few months, I’ve found myself doing the same thing at work. One of our major projects is starting a construction company to complement our investment company. We went on a buying spree a few years ago, and with interest rates up these days, we aren’t buying nearly as often. But we’ve already built the infrastructure to oversee many more construction projects than what we need to do ourselves.
So why not take the company we’ve effectively already built and start doing projects for third parties to raise funds? After all, the biggest problems for almost every buy-and-hold real estate investor I know are cash flow and liquidity.
Unfortunately, this requires putting together a bunch of contracts, legal documents, advertising materials, a website, etc. And, of course, there are lawyers and employees and companies to help with such things, but I don’t want to pay that much nor give away that much control, as I need to make sure they say what I want them to say.
I had planned to have this project finished in December, but it’s still not done at the beginning of February. And it’s not because of procrastination—at least not the normal sort.
I have been working hard. I’ve attended lots of meetings, made lots of calls, and sent lots of emails. I have found a way to do all sorts of things but not prioritize. I’ve stayed busy but have not focused on the Quadrant II activities (not urgent, but important) that Stephen Covey noted were so important in order to keep First Thing First.
Action faking can even be something that gets into our relationships. For example, date night with your partner should be more than just a box to check.
Action Faking in Real Estate
Action faking plagues us all. But it is particularly damaging to people trying to start investing in real estate. Indeed, one of DeMarco’s examples of action faking is “reading dozens of books until you ‘feel ready.’”
Who hasn’t heard about this sort of thing when it comes to real estate?
That’s not to say that reading books on real estate investing isn’t a good thing to do. It definitely is, and BiggerPockets has an excellent catalog to get you started. It’s also not to say that listening to podcasts or attending conferences are bad ideas (although be careful about the “guru” types).
What it is to say is that these activities are not moving you toward success as a real estate investor or an entrepreneur. Nor is buying business cards or blogging or organizing your desk or other things like that.
It’s good to learn, and these things may be helpful or even necessary, but they are not moving you forward. They are not doing the hard thing of making offers or talking to sellers. They’re not doing the boring thing of due diligence and putting scopes of work together. And they’re not doing the scary thing of pulling the trigger to buy a property for hundreds of thousands of dollars or asking someone to trust you with a private loan, etc.
As Emily McGrorey puts it, “Action faking is the worst type of procrastination.” Because at least when you’re procrastinating, you know you shouldn’t be. Action faking is, in many ways, procrastination without guilt. And without that guilt, there’s no impetus to change what we’re doing. It’s like a hamster wheel—but for humans.
Thus, I would highly recommend taking a close look at everything you’re doing in your business and life. Again, there’s a place for reading books and listening to podcasts, just like there’s a place for buying business cards. But they should be seen as extracurricular activities.
It helps to have played baseball on the varsity team and been in the student government on your application to get into college. But none of that matters if your GPA is in the toilet.
The same goes for business and life, but even more so. In the end, you have to do the real work of real estate investing to become a successful investor.
