Bruce’s Wealth Blog

Dreams are really cool things.  They let you play out scenes that you would not or could never play out in real life like the dream I had last week featuring Katherine Heigel.  Boy did that one come out of left field.  But I digress.

Dreams also help to sort things out that are jumbled around in our brains.  I can tell you that the last several months have really shown this to be true.  It has been a while since I have gotten up at 2:00, 3:00, or 4:00 in the morning because my brain was working on software development hurdles that were too difficult to solve during normal “awake” hours.  As many of you know, I have been diligently writing code for the last several months writing the RFS Short Sale Manager which will be released today or tomorrow.  My wife experienced me waking up at all hours of the night and morning to solve a problem I was dreaming about.  It gave her flashbacks to when I wrote software as a full time job.

Dreams also help us to formulate goals and plan our future.  It was a dream of a better life that brought early settlers across the Atlantic to the “New World.”  It was a dream of a better life that took us westward to California.  It was dreams of a better life that brought technology to us that we take for granted today.  It was a dream of a better life that got me into real estate.  It was a dream of a better life that brought you to this website to read my blog.  Every great human accomplishment came from a dream.  While not necessarily a “great” accomplishment, a perfect example of this is the cell phone.  The cell phone, especially flip phones, and bluetooth technology started off as a dream and shown to us on TV in the late 1960s on Star Trek.

Some people call others dreamers as a put down.  But not to dream is to stay stagnant in life.  I say to you dream and dream big.  You never know where it will lead you.

Bruce..

It has been a while since I have blogged.  I am sorry about that.  It is very easy to get so caught up in everyday life that time goes whirring by. 

We have really been closing deals lately.  Just today we closed one short sale and got an approval on another.  When I think about my rise to success, one of the things that come to mind is the whole fascination with scripts.  While you often end up saying the same things over and over to different people and creating something like a script in your head as a result, the truth of the matter is that the script that you create is yours.  It has your style, your personality, and other qualities that make it your trademark.  In that sense I like scripts.  But when it comes to using a written script, especially one written by someone else, I truly dislike them. 

As someone who has to listen to them when people call sometimes, I find I dislike them even more.  If you don’t want me to listen to you, call me and read from a script.  You can tell callers are reading from a script.  I have finally gotten to the point where I simply ask if they can jump to the end of their script because I am getting impatient.

But words are important.  And using the right words can make or break a deal.  So if you are new at something, how can you make sure you are using the right words or not?  Well as it turns out, it is a matter of perspective.  Are you genuinely providing a valuable service to serve someone else or are you providing a valuable service to serve yourself?  If you are truly serving someone else, then your words need to reflect that.  Let me give you an example:

It seems that just about every retailer on the planet has some rewards program.  The purpose of the rewards program has nothing to do with rewarding you, but is designed to track your spending habits so they can use that information to maximize profits.  To make the rewards programs more convenient, they started giving you a little barcode you could carry on your key chain to ensure you have it with you when you go to check out.  It was supposed to be a matter of convenience.  The more convenient you make it the more likely someone is to use it.  Well, as it turns out, if you are like my wife you have a separate keychain just for those little bar codes because you have so many of them.  Now what was convenient is no longer. 

Personally, I really dislike these programs and pretty much refuse to participate in them.  Most of the time I get to the check out and am asked if I have a rewards card, or a gold card, or a V.I.P. card, or whatever they decide to name it to make it sound special.  When I tell them no, they ask if I would like to join.  When they ask me that question, I always say no.  I know for a fact that they will give me some form to fill out that will take more time out of my day to apply for some "privilege" that I will never use in the future.  So my answer is always no.  But pay attention to the words they normally use:  "Would you like to join?"  That implies work or effort on my part to do something I don’t want to do. 

Yesterday, I went to see a movie with my daughter and her friend.  When I got to the ticket booth, the girl asked, "Would you mind if I signed you up for a rewards card?  It will take less than a minute and it won’t cost you a dime."  Before I realized it, I had said yes and less than thirty seconds later she had written down my name off my credit card, and the last 5 digits of the rewards card, and I had the tickets and rewards card in my hand.

So why would someone like me who hates these programs say yes this time?  Well, let’s take a look at her words.  "Would you mind…"  She is asking for permission.  "I signed you up…"  She is doing the work or putting forth the effort.  "less than a minute…" I won’t waste your time.  "It won’t cost you a dime." You won’t feel any financial pain.  She was using words that work.  She was saying she would serve me so I won’t be inconvenienced.  No wonder she had pages and pages of rewards cards she signed up that day.

What do your words say?  Are you using words that work?

Bruce..

I know so many people who demand great service from their suppliers of goods and services.  Yet, often when the shoe is on the other foot many of these demanding people are not willing to give a little extra to people demanding it from them.  Why is it that as so-called business people we understand that the way to develop loyalty and grow business we need to go that extra mile, and often choose not do it?

I don’t know the answer to that question.  But I was thinking about it this week as I was working a short sale that needed to close.  The problem was that the seller had two judgments that needed to be satisfied.  During negotiations we  included payment in full for those judgments but we did not get the payoff letters yet.  Once negotiations were complete, it was time to get the payoff letters.  Unfortunately while the first judgment holder was very quick in getting the payoff letters to us, the second judgment holder was much more difficult to deal with.

The judgment holder told us that it would take at least seven days to get the third party authorization into the system to be able to talk to us.  After working the system, I was able to find out that the judgment holder would not discuss the payoff directly, that they needed to refer the file back to an attorney through a national attorney referral network, and that would take an additional 10 to 14 days.  So, the normal timeline would be at least 21 days from initial call to a point where we might get a payoff letter.  The problem with this timeline was that it went beyond the settlement deadline given by the first mortgagee.  And that the first mortgagee already told us they would not extend the settlement since the foreclosure sale date was so close.  So to summarize, if we didn’t close on the short sale in time, it would go to the foreclosure sale and the judgment holder with all the red tape would lose the collateral they had to collect the judgment.  When I explained this to the judgment holder the response was, well then there is nothing we can do.  Talk about not going the extra mile, the judgment holder was a perfect example of it. 

So if the judgment holder wasn’t going to go the extra mile willingly, that meant I would have to do it and give them a better incentive to go that extra mile.  My approach required multiple personalities.  A nice guy approach through the front door, and a factual and demanding approach through the back door to create coercive pressure on the people responsible for getting the job done.

While I was being a nice but squeaky wheel on the front end, dealing directly with the people responsible for getting the job done, I was also climbing the corporate latter on the back end that took me from the local branch in NV to their corporate headquarters in CA, to the corporate headquarters of their parent company in NY, to the world headquarters of the parent company’s parent company in London, UK.  The purpose in talking with the people in the CEO’s office in London was to create a high level of priority and pressure as they send me back down through the chain.  The reason this works is because a corporation relies on being able to solve problems at the lowest possible management level.  If that doesn’t happen there is a failure in the system or a failure with personnel.  Regardless, the CEO of a worldwide finance corporation doesn’t want to hear from someone complaining about one of his subsidiaries doesn’t seem to want to be paid a $2k judgment they are owed. 

The strategy worked.  The representative of the CEO put me on hold and gave me the phone number and name of someone in NY who he had just spoken to about the situation.  The person in NY did the same thing until I was back at the local level.  Only now, I was back at the local level with someone who knew that the CEO in London said to get it resolved and quickly.  The next day I was notified that the attorney had it.  I had already been working the attorney referral network, so they too were looking for it.  In fact, from my understanding it had been assigned to the attorney within minutes of receiving the request from the judgment holder.  I also had been working with the attorney who it was going to be assigned to, so when they received it, they already had everything in place.  We received the payoff letter the very next day.

A large company who had no desire to go the extra mile was now bending over backwards to accommodate the needs of this situation.  Obviously we were going the extra mile for our client, and the client knew what was going on every step of the way because we were using the Short Sale Manager system we created for our Inner Circle members and they could see firsthand how much effort we were exerting to serve them without us having to tell them directly (very powerful).  And a process that was going to take at least 21 days was accomplished in 5 days.  We also derived a tremendous benefit by going the extra mile by strengthening our relationship with our client, we were able to build more relationships in the UK, and I personally found out that the CEO of this company is also an Anglican minister who wrote a book on faith and finance.  I got a new found respect for the leadership of this company.  The relationships and information are much more valuable than anyone could ever imagine.

So I ask you.  How much are you willing to go that extra mile?  Are you willing to make that overseas call?  Are you willing to put in a little extra time?  Are you willing to truly put your client first?  I challenge you to do these things.  Your business will be stronger if you do.

Bruce..

Wow, it has truly been a while since I have written a post.  I am going to start with encouraging you to take a look at a video that will tell you more about who I am and what this Inner Circle is all about.

Give it a try.  Go to http://member.drpreforeclosure.com to learn more.

Bruce..

I was shocked last night to hear a comment about our economy and what is really going on.  You see, the federal government has their own special way of doing accounting.  While we often joke about how “creative” the federal government can be, we have a sense that something just is not right but we cannot put our finger on it.  The truth is that instead of using accrual accounting, which is the method required by the government to be used by businesses when reporting income to the IRS, our government uses cash accounting when reporting back to us.

Let me give you an example of the difference:  Let’s say you obtain an unsecured personal loan for $100,000.00.  And you have 5 years to pay it back with 5% interest.  Your monthly mortgage payment would be $1,887.12.  In a cash system, you were billed $22,645.48, and you paid $22,645.48.  If your income was $22,645.48, then you would show a balanced budget because your income was $22,645.48 and your expenses were $22,645.48.  If your income was $30,000.00 then you would actually show a $7,354.52 surplus.

However, if you conform to GAAP (Generally Accepted Accounting Principles), then you would use the accrual method required by our corporations.  In this case, you would show $30,000.00 in income, a new liability of $100,000.00 – $18,055.53 in principle reduction leaving a balance for that liability of $81,944.47, and interest expense of $4,589.96.  The cash at the end of the year is $7,354.52.  Balancing the cash against the liability, we end up with a negative net worth of $74,589.96.

We have the same year and the same transactions but two different methods of accounting in play.  One method shows more than a $7,000.00 surplus.  The other method shows we are in the hole for nearly $75,000.00.  Which sounds better to you?  If you were a politician, what would you rather tell your constituents?

This is what is going on today.  It is not about republican or democrat.  All of our politicians are spending us into bankruptcy and wondering why we are having problems with our economy.  Without this last “economic stimulus” bill, the government would have to disclose a national debt of $65,500,000,000,000.00.  This is more than 4 times our gross domestic product, and for the first time in history exceeds the gross domestic product for the entire world.  In short, as a nation we are bankrupt.  If we were to pay this debt off today, each household would have to pay$589,228.76.  If we were to pay it over time (which is the way we like to do things) it would cost more.  Based on the 30 year bond rate of 3.5%, if we were to drag this out over 40 years, we would be paying a total of $121,795,718,063,508.00 of which $56,295,718,063,508.10 is nothing but interest.  This equates to about $1,095,657.10 per household or $2,282.62 per household per month.  That seems to be a little much to put on the backs of the taxpayers, so lets drag this out over 75 years.  Again, at an interest rate of 3.5% the total would be $185,420,751,313,928.00 of which $119,920,751,313,928.00 is nothing but interest.  This works out to about $1,668,018.92 per household or $1,853.35 per household per month.   Basically, what we are talking about is another house payment per month for every household in the United States for the next 75 years or 900 months.  If our politicians were doing this in a publicly traded corporation, they would be prosecuted and thrown in jail.

To fix this, our government can print more money.  If we do this, and we likely are going to do this, it will have an even worse effect on our economy.  Printing more money will devalue the dollar against every other currency in the world.  Our imports will cost more, and we will get less for our exports.  In other words, as we interact with other countries, we will increase our expenses while decreasing our income.  Ultimately this will put more pressure on our economy creating at best stagflation or at worst a depression the likes of which we have never seen.  If you have never heard of stagflation, it is where we have uncontrolled inflation coupled with a stagnant economy.

In the short term, we have HR-1 (2009).  The American Reinvestment and Recovery Act, otherwise known as the Economic Stimulus bill.  This is a bill we have been told will cost American Taxpayers $816,000,000,000.  Once all is said and done it is expected to cost more than three times that amount.  In addition, the law makers had no time to read the bill.  They simply voted on it based on what their leaders told them was in the bill.  Looking at the bill we find $600,000,000.00 will be spent buying new cars for government workers; $10,000,000.00 for bike and walking trails; $200,000,000.00 for plug in car stations; $400,000,000.00 to NASA to collect climate change data; $800,000,000.00 to clean up superfund sites; $600,000,000.00 in grants for desil emission reduction; $650,000,000.00 for alternative energy technologies, energy efficiency enhancements, and deferred maintenance at federal facilities; $1,000,000,000.00 to the unions for their community oriented policing services cops hiring program; $246,000,000.00 to Hollywood; and $4,190,000,000.00 to ACORN, the group under investigation for illegal voter registration.  These are just some of the expenditures in the  bill.  Clearly, this is not an economic stimulus package.  It is a pork package.  It is simply a spending bill that has been rushed through.

So what does this mean to you?  Spending got us into this trouble.  More spending will not get us out.  As an investor it is critical that you minimize your debt and maximize your assets and income.  Real estate is still a great investment, but you don’t want to owe money on it.  You want to own it free and clear.  As the dollar is devalued, your cash will also be devalued.  But, assets such as real estate and gold will increase in value.  I hope I am wrong, but it looks like we are in for long harsh economic times.  Non-monetary assets are your best bet.  I will be discussing this in more detail at the next Inner Circle conference call.  Make sure you don’t miss it.  If you are not yet an Inner Circle member, visit http://member.drpreforeclosure.com and click on Inner Circle to join.

Bruce..

It is way too easy for us to find reasons to fail.  I hear people saying, "The economy is bad."  Yet I also hear people buying and selling.  "There are too many laws."  Yet I hear people using these laws to make money.  "They say I can’t use this technique."  Yet I hear people getting the same thing done using other techniques.  "I don’t have enough money to get started."  Yet other people without money are changing their financial situation every single day.  The truth is that these are nothing more than excuses.  A woman once told me that excuses are nothing more than well planned lies.  I could not agree with her more.  All of these excuses are well planned lies to cover up the truth.  And, the truth is, "Doing something new is uncomfortable and I would rather be doing something comfortable."

We all have various levels of fear and comfort in our lives.  We all strive to decrease our fears and increase our comfort.  One fear is, "what if I fail?"  The answer to that fear is that if you fail you will be back where you are now with a little more education and experience.  But, if you don’t try, you will still be where you are but you will lack the education and experience you would have otherwise gained.  I agree with Jim Brooks when he said, "I would rather attempt to do something great and fail than attempt to do nothing and succeed."  Think about that one for a minute.

Part of our fear of failure comes from our concern about how it would look to our friends or family if we fail.  Part of our willingness to quit comes from the fact that for many the reason for attempting to improve our financial position comes from how we want to look to others.  Clearly, while you think that reason is an important one and one that often directs how you life your life, I would say that it is a very weak reason.  My proof that it is a weak reason is the fact that the people whose reason is how they look to others quit.  Those whose reason is tied to their very survival tend to persevere and they are the ones who succeed.  And of those who succeed, they often succeed with fewer resources than those of the ones who quit.  We all need to worry less about what others think about us and more about what we have to offer them.  If you are a person of faith, I would say that instead of comparing yourself to your neighbor, you should be comparing yourself to God.  By doing this you will know that you will never measure up and in that knowledge remain humble.  And, more is accomplished through humility than through self exaltation. 

Dr. Martin Luther King in his dream speech said, "I have a dream that one day a man will be judged by the content of his character instead of the color of his skin."  I agree with Dr. King and would add a new dream.  I have a dream that one day a man will also be judged by the content of his character instead of the size of his bank account.  If your "why" is not good enough – if your reason for attempting something is not good enough, you will never succeed.  You will either use failure or your fear of failure as a reason for quitting.  What is your "why?"  Is it strong enough to see you through your failures?  Is it strong enough to make you get up and try again after you have fallen down for the 900th time?  My "why" is.

When I created my Inner Circle program, people told me it wouldn’t work.  They told me that it was too inexpensive and people wouldn’t take it seriously.  They told me that I would never be able to break through the idea that you get what you pay for.  They told me that no one would ever believe you can get much more than you pay for.  You see, I am on the leading edge of something I think is important.  The trouble is that often when you are on the leading edge, it becomes the bleeding edge.  But that is okay.  My "why" is strong enough to see me through.  My "why" is much bigger than I am – much greater than me.  Yours should be as well.  What is your reason for wanting more?  Is it about you or is it about something much larger? Will it be enough to persevere through your mistakes and failures?  I will leave you with this thought I got from a fortune cookie:  "Past experience:  He who never makes mistakes, never did anything that’s worthy."  It also had some lucky numbers, but I will keep them to myself.

Find the "why" that will make you and keep you strong and tenacious.

Bruce..

P.S.  For those of you who are discouraged about the demise of double closings and simultaneous closings, and the possible future demise of the assignment fee, don’t forget to learn my new wholesaling technique in the Inner Circle.

I am simply going to ask you to look at these two videos this week.  They speak for themselves.  These could be the most important videos you have ever seen.

Video 1

Video 2

Now that you have seen the videos, I have only one question for you to answer: 

What is your excuse?

Bruce..

This year I resolve not to make a New Year’s resolution.  Of course, if I am as successful with that resolution as I have been in the past with other resolutions, then clearly I will make a New Year’s resolution.  In fact, you may have noticed that I already broke the resolution by making the resolution to begin with.  Don’t worry the rest of this post will not be as convoluted as the first paragraph.  I have resolved to keep this simple!  (oops!) 

The New Year is a very opportune time to take inventory of the past year, even the past several years, and to set goals and plans for the future.  When I say that, one of the first things that may come to your mind is how much money you want to make this year.  That isn’t a big shock since you are reading, “Bruce’s Wealth Blog.”  Wealth means money right?  Well, not necessarily.  To me, wealth means a particular lifestyle.  Quite honestly, the definition of wealth has changed for me over the last several years.  To explain this change, I need to be a little sexist and write specifically for the guys here, although there are some ladies who may also be just as guilty as I was.

When I started investing, it was about the money.  I was the man.  I had to provide for my family.  And, of course, the best way to do that was to sacrifice myself and my time to make sure my family had money.  To ensure we had the “things” that we thought we needed.  I wanted my wife and my daughter to have everything they wanted.  I worked long hard hours to provide those important things for them.  They didn’t see me much, but we had money.  It didn’t take me long to experience money intoxication.  I started looking at enterprises that were wildly profitable but morally questionable.  These enterprises had the winning combination of booze, sex, and rock and roll.  (I will go into more detail about these enterprises in my ministry blog in the coming weeks).  With these enterprises, I could have all the money, and the power it brought with it, as I wanted.  My family and I would never want for anything.

DISCLAIMER:  I am about to make some generalizations about wives and children. Your particular model may vary.

I was so blindly intoxicated by money and power that I didn’t see what my wife and daughter really wanted.  Sure, it was nice to have nice things, but what my wife really wanted was to cuddle up with me on the couch watching TV, talking, reading, or doing nothing at all.  My daughter was happier cutting up an empty box with me and playing in it with me than she was with the toy that came in the box.  As a rule, women and children would rather be broke and spend quality and fun time with their family provider than to have lots of money and things but little or no time with their “provider.”  Being the provider means providing them with security.  Security means a secure relationship and has nothing to do with money.

We are told that money problems are the number one cause of divorce in our society today.  The truth is that it is not the lack of money that causes the arguments that lead to divorce.  It is normally the arguments that arise because the husband feels like he is less of a man because he isn’t bringing in enough money, so he goes out to get more and practically abandons his family in doing so.  The result is normally that his family still doesn’t have enough money, and they don’t have the bond of a close relationship because they don’t see him either.  They argue, separate, divorce, and blame it on money.

While my situation with my family really was not a lack of money, it was very similar because of the fact that I was so driven to continue making more of it that I lost sight of what was really important.  After all, having money is better than not having money and having a lot of money is better than simply having some money.  More is better right?  My intoxication with money and my willingness to compromise my morals to get into enterprises that catered to a seamy part of our society cost me nearly everything, including my wife and my daughter.  I can tell you from personal experience that chasing after money can cost you all of your money, your family, and even your life and your soul.

So when you take inventory of the past year and start making resolutions for 2009, I urge you to think in terms of what is really important.  Is it the money, or is it the lifestyle?  What do you really need? What does your family really want from you?  What will improve the quality of life for you and your family?  Discuss it with your family.  You may be surprised at the answers.  And, finally, if you haven’t already done so, take Bruce’s Challenge.  It too will help you with your priorities.

I wish you a very prosperous New Year.  May 2009 exceed your dreams.  May you live the lifestyle that makes you and your family happy.  May 2009 be the year that transforms your future.

Bruce..

I was speaking to a dear friend of mine the other day and she made a comment that I thought was important to discuss.  She is a business owner.  As a business owner you are by definition a leader.  Even if you have no employees, you are a leader.  The purpose of your business is to earn a profit by providing a service or product to customers or clients.  Those customers or clients look to you as the business owner to provide them with what they need.  Therefore, as the provider you are a leader.

The comment she made was, "Leaders don’t make mistakes."  As I thought more and more about this comment, I realized that her view is probably held by the majority of other people in the world.  This should go down as one of the biggest urban myths of our time.  The truth is actually the opposite of what is perceived.  Leaders actually make more mistakes than anyone else.  What separates leaders from everyone else is in this regard is that their risk tolerance is also greater than non-leaders.

A leader absolutely must be a decision maker.  If the leader is not willing to make decisions, his company will stagnate and eventually collapse.  Actually, choosing not to make a decision is just as much a decision as making the decision, but we will not get into that here.  Leaders are charged with making decisions others don’t want to make.  How many times have you gone into a business only to be told that the employee cannot make that decision, that only a manager can and the manager is out of town on business?  Let’s face it, most people don’t like making decisions even though we make thousands of decisions every day.  Some people experience great anxiety when they are faced with making a decision.  They get that terrified deer in the headlights look every time they are faced with a decision.  The anxiety we all feel when faced with a decision comes from our fear of being wrong.  What if we make the wrong decision?

Bruce’s Decision Rule:

"You will make bad or wrong decisions in your life."

This is just a fact.  Leaders understand this fact and are willing to tolerate the risk of being in a position to make decisions.  The only reason we don’t know they make mistakes is because they are making timely decisions to correct the mistakes they make.  As an employee you will probably never see the mistakes a leader makes.  Even if a leader personally comes to you and apologizes to you because they made a mistake, you will go about your day and will at the end of the day still make the statement that leaders don’t make mistakes.  Since leaders are making more decisions, they make more mistakes.

There is one more point I have to make before I close this post out.  If you are afraid to start your business because you are afraid you will make a mistake, let me leave you with these thoughts.  First, you will make mistakes.  You are not perfect, no one is.  Regardless of how much information you have, how educated you are, or how smart you are, you will make mistakes.  No amount of information will keep you from making mistakes.  The second is that your choice not to start your business because of your fear of making mistakes is a mistake in and of itself.

Bruce..