Have you ever wondered why some property investors seem to make irrational decisions? In this episode we’ll explore the four distinct lenses of finance that can illuminate the real estate landscape: theoretical finance, empirical finance, behavioural finance, and conventional finance.
Understanding these can help you navigate the complexities of property investment more effectively. As someone immersed in the real estate market, I’ve seen firsthand how these lenses influence buying and selling decisions. Tune in and uncover how to view real estate through these vital frameworks.
Things you’ll learn from this episode:
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Understanding the Four Lenses of Finance in Real Estate
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Theoretical finance in real estate
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How empirical finance differs
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Why is behavioural finance important for investors?
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What does conventional finance assume?
I discuss –
00:00 Why Property Is Reliable (But People Aren’t)
00:52 The 4 Finance Lenses Every Investor Should Know
03:15 Theoretical Finance: Understanding Property Relationships
05:45 Empirical Finance: What the Data Really Says
08:10 Behavioural Finance: Why Investors Make Bad Decisions
12:00 A Real-Life Example of Emotion vs Value
17:50 The Psychology Behind Property Decisions
25:10 Melbourne: Opportunity or Trap?
29:50 Why Great Investors Ignore the Herd
31:45 Final Lessons on the 4 Finance Lenses
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Take care,
Sam