Do Your Due Diligence
When is the last time you acted on a good idea? I know that I have left many good opportunities on the table because I did not know where to start. It is a common problem for most people.
So...how do we fix it? The answer is simple, but it takes some work. We must do our due diligence.
This is a phrase that is used across many industries, but for our purposes, it boils down to meaning: "Figure out if this is the right opportunity for me."
This is the first step towards making your opportunity a reality. It is easy to get overwhelmed by all the steps that must be taken. The path from idea to reality is difficult. However, it can be simple to start on the path.
First, set out a list of 5-10 relevant questions that must be answered before you would move forward with your idea. For example, if you are considering whether to buy a house or rent one, your list might look something like this:
How much money am I currently spending on housing?
Should I spend more, or would I prefer to spend less?
How much can I afford to spend on a down payment?
How much does it cost to rent, and how much does it cost to buy the type of house I want in the neighborhood I want?
What else could I do with the money I am using for the down payment?
Would I prefer doing one of those things instead of owning a home?
What are some of the risks to owning a home? To renting?
Am I comfortable taking those risks?
Once you have these essential questions, your due diligence process is to answer them. Answering these questions will involve conversations, meetings, research (Google will be your best friend), and a bit of critical thinking. Your answers do not necessarily need to be the most in-depth answers possible at this point. The important thing is to see if there are any obvious issues with moving forward.
For instance, at this point it is more important to know that your range for a down payment is $10,000-$20,000 than to spend days determining that $14,500 is the optimal amount for your down payment. Once you have the range, it will become obvious that you should not buy if all of the houses you are interested in would require a $35,000 down payment.
The quicker you can accurately answer your essential questions, the quicker you will be able to proceed with or reject opportunities, and the more powerful this method will be for you. The due diligence process will not end with you buying a house, rather it will end with you knowing whether or not you should buy a house. It takes the abstract idea, removes the uncertainty that slows our actions, and provides a clear path forward.
Do not let yourself be bogged down by the magnitude of projects, ideas, or opportunities. Instead, determine what the relevant questions are and answer them. It takes work, but it gives you actionable steps toward making your dream a reality.
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