Navigating an Economic Crisis: Managing Your Emotions and Approaching with Logic

Sheri: Have you been working with some of the clients that you're working with? Has this economic, the economic challenges that have just kind of been ramped up even more recently, have they come to the surface as an issue? Or how are you seeing them?

Faisal Ensaun: Before I go on my long-winded journey, first of all, yes, it definitely has affected people. Whether it's potential clients or those who are already working with them but I am actually curious before I jump in, I'm curious to hear. I'm actually really curious to hear your take on it from a real estate investor perspective because I think that will clarify some of the things I'm gonna go into cuz a lot of my clients are real estate investors.

What, like if you step away from the coach and I know you're connected with investors and Yeah the realtors and people who are in the real estate world. How is this affecting you, I know there's a big effect in that area. 

Sheri: So great question. I think everybody that's in the real estate space kind of has a different concern or a different fear, a different way of responding, and I think a different way that they need to think about things.

So as an investor, if I'm working on buying stuff, I'm always kind of actively looking. My concerns and what I focus on, I think, would be very different than somebody that's already bought because I know that there are a lot of investors who have purchased properties over the past few years on adjustable rate loans, ones that adjust.

That is honestly where I see the biggest amount of justified fear. Residing in the real estate industry because just to kind of break it down quickly, you buy a property, it's cash flowing. But what happens then is your rate can adjust if you have that kind of mortgage and then all of a sudden, The expenses and the income stay the same, with the exception of your interest, amount of interest.

And so, some of the increases that people could experience from that alone could kick it out of being cash flow. And then if you have a bigger property and then you've got other investors involved, now you have a cluster because you might be losing money and not only losing your own money but losing other people's money.

So there's a real significant concern in, that space, of the decisions that have already been made and now kind of these unexpected changes, impact versus somebody that hasn't bought and they're wanting to wait and see, or they're like, well, it's a big interest rate just because they're used to what the interest rate used to be.

my long-winded answer, it really depends on where you are, in the real estate cycle of life. Yeah. 

Faisal Ensaun: I love how logically you looked at that whole process. That is not the sense that I get when I'm talking to investors. Yeah. Because it, like when you describe it was very like my concern like the concern was very logical and rational in the sense that, hey, if this, these things go down, then that's gonna affect people.

And, I would be concerned about it. And that's a legitimate concern. Because of it. And just to break this down for everybody, if you haven't thought about this, this actually affects other people who are, for example, who have mortgages as well. So we're not just talking about the real estate investing space.

We're like people who have mortgages at variable rates, and you called it, what did you call it? Adjustable or variable adjustable variable. And not only them, but people who have been on a fixed rate and they're up for renewal suit, and there's a prediction that they're talking about, at least in Canada, that's where a lot of foreclosure of people selling their houses.

I mean, that's creating a challenge. And also on the other side of it, jobs are a big problem.  I was sharing that, with Sheri. I talked to a potential client the other day who works at one of the. Companies, I won't reveal it cuz it'll make it obvious, but one, a big computer company and they have been laying off people since last year, like at mass, like 13,000 people last year, and now they went through another wave of it.

Partly there's an adjustment to technology that's coming around, but a huge part of the companies are concerned too. They don't know if they're gonna be able to pay their bills and still gain profit. So I want to kind of get coaches to understand cuz it affects people in their day-to-day lives.

So it doesn't even matter if you own a business or not. Like, and on top of that, the commodity costs are like skyrocketing pretty much everywhere. And so like little things are adding up and that something has to give, in reality, something has to give. And when people start to see news such as a big bank, like the Silicon Valley bank going out of business that is, that freaks people out.

And when I paid attention to it cuz some of my investor clients, started posting on LinkedIn and everywhere I'm like, holy shoot. And you could tell they were freaking out. And then when you look at the conversations, when you talk to them about it, they are freaking. And, I also know a couple of people, who had actually money in a couple of these banks, so that actually affected people negatively too.

So looking at all this, so as soon as you bring this stuff into the picture, and that's why I asked you like, what's the real estate take? , and every time this has happened, and this is not the only time that has happened, so for example, when the pandemic came into the picture, it was a very similar reaction to the pandemic.

And it was cuz real estate investors at the time, for example, were like, oh shoot, what if my tenants are not paying rent? Because there was a huge thing around the rents and they didn't know if they could pay their investors, they didn't even know if it's sustained it. So a lot of the clients who came to me, they were, it wasn't like a logical problem.

 They emotionally couldn't deal with it. They didn't know how to handle it from an emotional point of view. They weren't even going to the rational side of it yet. They, I'm sure had conversations, they were dealing with their team, but in their own space, they were freaking out. So a lot of their thought space and emotional state was panicking, and they couldn't focus.

They didn't know what was gonna happen. As soon as we would go into conversations, an interesting thing would come out as soon as you deal with the emotional side. of things Then the rational side starts to emerge and then they can create a plan around it, and then they can think through what their options are.

Yeah. And what are the possible outcomes, which in most cases, a lot of these guys have backups. A lot of these guys have due diligence systems, so some will be affected negatively, but a lot of these guys have a lot of options. But they don't even get to that until they can deal with their emotional side.

The bad news for them. The good news for coaches, most people don't know how to deal with the emotional side, and that's where to me, I would say the pandemic was a huge hike for my business for coaching. And when I saw that I could already tell people are booking more calls with me without me even trying to promote my business.

And it's the same similar thing that happens at that time. Now, of course, it depends on the demographic that you're focusing on. But it matters that we understand that. And you might think about, well, oh, what are your options? How are you going towards that a lot, but they might not even know how to go towards that, and you might be overriding just like they're overriding.

And they don't have the tools, the awareness to dig a little bit deeper and look at the bigger picture and look at how they can mitigate a lot of the challenges and risks and all that stuff as they, they're moving through it. B before I kind of move forward, what are your thoughts about that?

Sheri: Yeah, I think you bring up a really good point that when you think about our brain and how it works, there are the logic centers and then there are the emotional centers. When the emotional centers are triggered, It's like a blizzard or a sandstorm. It's like everything is still there and in place, but the wind is blowing and stuff is going, so you can't see it.

Or maybe it's like being in a cave, a true cave where there is zero light like your hand is right here, but you can't see it because you're so enveloped in your own emotional turmoil and kind of storm. So that has to get dealt with in some way. There has to be some way to. Figure that out in order for the logic to kind of set in.

 I think people are usually pretty good, and I am usually pretty good at being logical in some of these situations, but only after the emotional part has been recognized and has been, you know, given space and time to express itself. And then it's like, okay, okay, now I can kind of have it a little bit more of a clear head, like the snowstorm.

It's starting to pass and I can start to see things half a mile away. 

Faisal Ensaun: And also it's funny cuz the entrepreneurs that I've worked with, even though they might not have formal training in dealing with their emotions, or they haven't, sometimes they haven't gone through a formal coaching process.

A lot of these guys have learned because they've dealt with a lot of crazy situations, they've dealt with a lot of these and they go through the turmoil, they go through all the stuff, and then at some point, after they freak out, they'll be like, We need to change something. And those entrepreneurs tend to be very good at what they do cuz they pivot quickly.

They will still go through the panic and craziness just like everybody else, but, their recovery is much faster. And just for coaches who are, listen to this, if you're not up to date on, the way Dr. She described that, like, these are the two conflicting parts of our brain.

Like the hindbrain, the limbic system, and the prefrontal cortex. Sometimes they go into conflict and there are reasons behind it. Like if there's an animal coming towards you, you're not gonna sit there, and assess your possibilities, your body's gonna be like, I chose the way out, or find a way to fight this animal.

If you're a family member, somebody's in danger. You're not gonna think about assessing options. There is no logic.  I wouldn't even care if, for example, I'm crossing the road and my daughter goes in front of me and there's a car coming, I don't think I would be concerned about even hurting her.

Because I want her to be alive first, and that's a very automatic process. Like, and I'm not assessing options like this happens very automatically. So a lot of people go into that fight, freeze or flight response and it's consistent. that response is a very temporary response until the danger subsides.

The problem is that the danger is not physical in nature. It's not in front of you. It gets amplified in our minds, especially if we're surrounded by other people who are scared as well. And now you're, it's being reinforced socially for you and a lot of the market conditions even. So I've been listening to a lot of the lectures around this, around what happens in downturns of the economy.

 It's a mass panic. It becomes a main, even then, what do you call it? The Silicon Valley Bank? The way they talk about it is that one, yes, one person found out and recognized something, sent an email, and never really panicked. They went to pull me out and they went out of business.

Sheri: It was a self-fulfilling prophecy. It wouldn't have happened if panic hadn't been there. One of the goals, I think about, or one of the realities is, you know, if, myself or a client continues to kind of fester in this environment of anxiety where they're constantly being fed that anxiety, fear you know, it might actually make the situation worse rather than just feeling bad.

It might literally, Increase the severity of what ends up happening. And so I think helping somebody work through that and move into their resiliency as a human and, more into that logical aspect where they can take action concerted specific intentional action based on the future, based on the present and the future.

I think that shift is really, really important. 

Faisal Ensaun: Yeah, definitely. It's one of those things that we might completely omit, especially if you've worked on this and your normal, is that you can recover from this quickly. If that's your norm. You might not even think, to get into that because your norm is not, that's not a big deal.

It is a concern, it's not a big deal, but your client might not be going through that. Like, for example, throughout the pandemic, worry became a huge issue. Like it, it started becoming more of like like a recurring thing more so than normal, because everybody was worrying and it became more reinforced.

So, for example, in these situations, I would want to check in with my clients, even if the topic is completely off. I would bring them back. I'd be like, okay, I know there are a lot of things happening, and think what your thoughts are? And a lot of times they'll bring it up. They'll be like, Hey, I heard the news, this and that.

I've been thinking about this stuff. They will bring it up. But if they don't bring it up, I would want to bring this up because these are global-level events that affect everybody. Just like the pandemic affected a lot of people. So throughout the pandemic, I think I had much more conversations about family life than any other time in my coaching because they were, people were directly dealing with, like, they were more around their family, and even though they were far away from other households, but within their household, they were, but they were having conflicts with their other family members.

I said they didn't know how to navigate that. So it became a very dominant topic. As the pandemic kind of subsided and as they started connecting with each other, that became less of

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