Those who work their land will have abundant food, but those who chase fantasies have no sense.
Proverbs 12:11
For the past few years, I have been working my land as it were, and following the advice in this proverb. My ‘land’, in this context, is a growing rental property portfolio.
Currently comprised of three properties, this rental portfolio produces a small income over and above the income from my job. This has allowed me to give additional funds to support missionaries beyond my local church to ensure sustainable giving over time.
Having saved enough money to acquire a further two properties, and increase my portfolio to five, I cast my eye about for a new opportunity. However, the UK property market is on the rise and good investments have become harder to find.
Then an exciting opportunity presented. A block of flats with twenty-four apartments. Price tag? Five million dollars. My creative juices started flowing. I considered the possibility of Mezzanine finance — a second charge over the property — at a higher interest rate. This would raise my total funding to 90% of the purchase price. What if I could find private investors, and raise the remaining funds for this deposit?
My heart beat faster. I could increase my investment portfolio by orders of magnitude! My portfolio would leap from three to nearly thirty apartments in a single deal! How awesome would that be?
Then I remembered Proverbs 12:11 — but those who chase fantasies have no sense.
This may look like a fantastic opportunity. However, the reality is this; I don’t have the financial capacity to weather the storms I might encounter on an investment of this magnitude. What if I struggle to find tenants for these twenty-four apartments, even for a few short months? How would I cover the resulting expense out of my current portfolio of three properties? What if the building needs unexpected maintenance? Or what if the government passes their planned bill to make rental properties more eco-friendly?
The truth is, a single leap of such proportions is simply too big — and too risky. It is a fantasy. I might even find private investors to fund the deal but I know, in my heart, that I would be putting their money at undue risk. I would have a duty of care to any investors and I have not been doing this long enough to take on a block of that size.
Best-case scenario? At this point in my journey, such an investment opportunity might all come to nothing and simply waste a lot of my time and energy. I might find that I have spent weeks, or even months, talking to agents and finance brokers, preparing business plans and investment memorandums, meeting with potential investors and selling them on the concept — all very exciting — only to find that all my efforts come to naught.
For a start, any savvy investor would look at my current portfolio of three properties and ask the hard question. How will you keep my money safe in the event of any unexpected setbacks on such a big investment?
The truthful answer would be, ‘I can’t’
Worst-case scenario? Utter ruin and bankruptcy.
The biggest challenge is in the numbers. To jump from a portfolio of three to nearly thirty in a single leap is tantamount to building a skyscraper on a foundation of Lego blocks. With an inadequate foundation, every tiny gust of wind would strain the foundation to breaking-point. Even the smallest financial setback could bring the entire edifice crashing down. Those who chase fantasies have no sense.
Work Your Land
So what is the alternative? Work your land! Those who work their land will have abundant food
I’m not saying that we should never aspire to greatness in any shape or form. I may yet purchase this type of investment at some point in my journey. However, the right way to achieve that goal is to work my land. In other words, rather than chase after a fantasy, I should work on growing the portfolio of three properties I have right now. And, if I work my land, I might increase three properties to five over the next year or two — God-willing. Then, I can work on increasing my portfolio from five properties to ten. This may take a few more years. After that, I might spend another year or two — even three — building the portfolio from ten to twenty. Only then will I be in a position to realistically consider an investment of this size.
In all honesty, even a plan that aims to double my portfolio size every two years is fairly ambitious. But it is far more realistic than attempting to increase it by a factor of ten in a single transaction.
As I readjusted my goals and timelines, around a work your land mindset, God reminded me why I started building this portfolio. It is to serve His kingdom and purposes; not my own ambitions. It is to create an income stream that can fund missions and cover my salary in part or in full, so freeing me up to work as a Tent-Maker in God’s kingdom. And God has all the time in the world.
By working slowly and diligently, I am following the instruction in Proverbs 12:11; work your land. And therein lies the promise. Those who work their land will have abundant food.
Far better to follow the wisdom in God’s word and work your land, as the proverb says.