Bruce’s Wealth Blog

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.

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..

I spoke to someone who is under a lot of stress today.  She is a business owner who I have a lot of respect for.  The conversation reminded me that when we think about starting a business we have visions of spending months in Tahiti lying on a beach with a drink in our hand that comes with its own little umbrella to shade it from the hot sun.  We don’t think about the work, time, effort, sweat, and sometimes even blood it takes to get there.  But the truth is that everything has a cost.  And, freedom, even financial freedom, does not come free.  The conversation also reminded me that I had endured similar struggles.

For me, the stress really started pounding me when I started adding other things to my business. It was really difficult to stay focused on one thing because I kept switching hats. One minute I was negotiating a short sale, the next minute I was an educator, the next minute I was a social worker, and then I was a landlord. I was doing the work of about 5 to 7 people. What really made me mad was that none of those 5 to 7 people were doing their job well. As a result, my business was spinning out of control. I was at a point where I didn’t even want to get out of bed.

After you start a business and start achieving some level of success you eventually learn that you have your arms around a beast of a business. It is bigger than you ever thought it would be.   It is starts to take on a life of its own, and you are trying to control it.   It is stressful and it is scary.   What adds to the stress and the fear is the fact that you are afraid others might find out how out of control your business really is.  You become paranoid about changes that occur in your business relationships.  You end up thinking even your close associates are out to get you and that there is no loyalty anymore.

If you haven’t experienced this yet, you will.  I did and most everyone I know who has started a business of any kind has.  So here are some things I have learned that may or may not help you. Please let me know if anything rings true here.

1. You need a “Sabbath.” It does not have to be a religious Sabbath. But the idea is that your life needs to be cyclical and part of that cycle is rest. You sleep part of the day, then you are awake part of the day, then you are asleep, etc. To have one day out of seven where you refuse to involve yourself in any form of business is crucial. It doesn’t even have to be on a Sunday. You can pick any day you want, but when you pick it commit to keeping it the same day and don’t ever let anything intrude under any circumstances. You would be surprised how critical rest is. When I was writing software or involved in solving hardware or software problems, it was often in the middle of the night when I came up with the solution. That was because I let my brain rest.

2. Identify the things you can control and control them. Let go of the stuff you cannot control. We spend too much time and energy on the stuff we have no control over. You can control the content of the stuff you send out. You cannot control the content of the stuff people receive, or how they interpret what you send out. You can control your behavior toward others but you cannot control their behavior toward you.  Often we spend so much time trying to control the things we cannot control that we lose control of the things we can.  It is best just to control the things you have power over.

3. Accountability is good if it is used correctly. Accountability should never be used to affix blame. Blame is never relevant.   Blame takes the focus off solving the real problem.  I have watched companies spend weeks investigating a problem so they could assess blame while the problem went unresolved.  It is better to focus on the solution and stop wasting so much effort on blame and retribution.  Accountability is different.  We think about, “holding someone accountable,” as being synonymous with, “if it breaks it is his fault.”  But again, that is not accountability.  Accountability is a combination of responsibility and communicating results.  Accountability should be used to understand what is going on with your business so you can anticipate the future. Used correctly accountability will allow stakeholders to anticipate and allocate resources on the next phase of the project or to start a new project.   The challenge is to introduce that accountability without taking you precious time away that are needed to complete the project. Business owners have a responsibility to know what is going on.   That should not be confused with micro managing.  A simple reporting mechanism should be enough.   But I have to admit, while I believe accountability is important, I find it difficult to hold myself accountable. I think that is normal with entrepreneurs. I think we all find it difficult to keep ourselves accountable. But our businesses depend on it.

4. Focus is critical. We can only focus on one thing at a time. It is important that we don’t dilute ourselves too much by following the next shiny object. That is where I have made major mistakes in my business and why I have run into the financial difficulties in the past.   As a result of those costly mistakes I retooled my business and adjusted my mission to one that is clearer today.

5. Taking a page from Jim Collins, I have to say it is critical to get the right people on the right bus and in the right seats, and to get the wrong people off the bus. This is tough because we don’t want to fire good people. But good people aren’t any good if they are not in the right seats.  It also means firing a client.  That is right, sometimes the client is in the wrong seat or even on the wrong bus.  When we recognize that we need to fire them.  Even more difficult is when the business owner learns that it is he who is in the wrong seat or on the wrong bus.  Sometimes that means the business owner needs to get off the bus completely and let someone else drive.

6. Change is sometimes good. Change for the sake of change is often not good. But, change is inevitable. If your business is flexible and adaptable to change like the amoeba, then your business will thrive in many different economic environments. If your business is not flexible and adaptable to change it will become extinct like the dinosaur. Be the amoeba.

You may be able to relate to some or all of these things.  If you do, you are not alone.  I would not be writing about them if I had not attended life’s seminars on the subject.  You have a choice.  You can think you are different and that these things will not happen to you.  If that is the case, then chances are that you will be sitting in one of life’s seminars learning that these things will indeed happen to you.  Or you can learn from my experience in the seminar of life.  The only thing I can guarantee is that attending life’s seminar will be more expensive.

Take care and happy investing!

Bruce..

As we dissect the campaign that got Barack Obama elected as our next president, and compare that to John McCain’s campaign we will see that while there really was not much substantive difference between the two platforms, there was a huge difference between the two campaigns.  Over the next several weeks I am going to dissect the structure of Barack Obama’s organization and the role it played in getting him elected.  As I do that, I will relate it to the organization of our businesses and discuss how to use that model to help us accomplish our goals and dreams.  But before I start, I will say this.  The decision America made was a result of one undeniable fact.  It had nothing to do with race.  It had nothing to do with party affiliation.  It didn’t even have much to do with the economy, the war in Iraq, or even President Bush, although they did play minor roles.  The one thing that got Barack Obama his mandate from the American people is this:  John McCain was doing his best to look presidential.  Barack Obama simply was presidential.

The Message

One of the reasons Barack Obama was presidential during the campaign was the fact that he had a message, and with few exceptions he stuck to that message.  Consistency is one of the most important qualities of a leader.  The message was that President Bush started a war he didn’t need to start, let those greedy business owners suck all the money out of the economy, America has lost its way and has lost the respect of the rest of the world, and Americans are hurting as a result.  The second part of his message was that John McCain would do the same.  Much of the message was not true but that didn’t matter.  Barack Obama stuck to the message like a locomotive sticks to the tracks while pulling a train along the track.  And, just like he was coming down off a mountain side the Obama locomotive kept going faster and faster along those same tracks.

If we compare that to John McCain, McCain was not a locomotive.  He was a jet ski on the water.  He would go one direction then flip around and go somewhere else never hitting the same water twice.  When a hurricane hit Louisiana, the jet ski postponed the convention so he could look presidential.  But the locomotive kept chugging down the hill and was presidential.  When the economy crashed and congress was thinking about a bailout package, the jet ski "suspended his campaign" to look presidential.  But the locomotive kept chugging down the hill.  Even though the engineer of that locomotive needed to participate in bailout discussions, the assistant engineer kept the locomotive chugging down the hill.  The locomotive was still presidential.  In the days leading up to the first debate, the jet ski wanted to postpone the first debate so he could look presidential.  The locomotive just kept chugging down the hill and was presidential.  On November 4, 2008, the jet ski found himself sitting on the tracks, and the locomotive just plowed right through that jet ski because the locomotive had to be on time to its next stop.  The next stop was the White House, because the locomotive was presidential.

How does this pertain to our business?  What on earth does this have to do with being an entrepreneur?  Well, it pertains because the entrepreneur is a jet ski.  Entrepreneurs notoriously have short attention spans.  As soon as we start one thing, we see something shiny and follow it.  Then while we are following that shiny thing, we see something else shiny and follow it.  Sometimes we even find ourselves stranded on the train tracks watching a locomotive come closer and closer until it runs right through us because it has to be on time to its next stop.

American entrepreneurs are even worse off than most.  Not only should we be taking massive doses of Ritalin to treat our chronically acute attention deficit, but we live in a society that has little or no patience either.  Part of the reason we are in the financial mess we are in is because we are not willing to save up to buy the next thing.  We need it and we need it now.  If we don’t have the money, we just hand the cashier a little plastic card.  We are fickle, impatient, and willing to follow the next shiny object regardless of what it is.  When we hear the next multi-level marketing program is the best wealth making strategy we follow it even though it has nothing to do with our investing.  Then there is the new real estate technique that has never been done before making people millions.  So we follow that until we find out it is illegal.  Is it any wonder that most small businesses fail before they ever get started?

Step 1 in your journey to success is to find your niche.  Find something about which you are passionate.  Find out where it is needed, who needs it, and why they need it.  Then like the locomotive, build your tracks so you can deliver your passion to every station that needs it or wants it.  Then start chugging and don’t worry about the jet skis.  And when they are foolish enough to sit on the tracks in front of you, just smash through because you need to be on time to your next stop.  You will never have to look like a wealthy person.  You will be a wealthy person. 

And now we can truly say this:  If your passion is the White House, then regardless of your race, religion, or anything else you won’t have to worry about looking presidential.  You will be presidential.  America is the land of opportunity for everyone.

Be the locomotive.

Bruce…

Anyone who has heard me speak live has heard me say that we are not in the real estate business, or the money business.  We are in the people business.  I truly believe that tenet.  Our success is based on the relationships and networks we build.  Our very existence as investors is based on solving the problems others need solved.  On Monday, I had a meeting that was set up by a Pennsylvania Realtor® I had forged a relationship with.  The meeting was with an investor with very deep pockets.  This investor gets about 30 sellers who need short sales every month.  He needed someone to work the short sales so he could buy.  That someone is the Realtor® who set up the meeting with me providing all of the back office support.  This will take our typical short sale load of 90 to 120 short sales on our desk at any given time to between 150 and 180 short sales or more.  Not only will my short sale volume increase, but the investor himself is now a resource I have to help my Inner Circle members.  It is all about the relationships.  If I had not formed a relationship with the Realtor® in the first place, none of the rest would have happened.  The best marketing I have ever done, is the same as the best marketing you will ever do – Network and build relationships.

But now, it is confession time.  As much as I teach, preach, believe, and live the truth that this business is about people, I still find myself regressing back to the money.  I caught myself doing this last week when I welcomed some new Inner Circle members.  As soon as I saw them sign up, I started making a mental calculation in my head.  You know, the one where you start spending money you haven’t even received yet.

Don’t get me wrong.  I do have a personal interest in seeing each and every Inner Circle member find the success they want and to reach the dreams they want to reach.  I am very devoted to them.  But the fact that I made that mental calculation told me something about my heart.  It revealed something to me that I didn’t want to see and am embarrassed to admit.

After the meeting with the new investor client I started picturing what that additional $30K to $45K per month income would look like for my business.  Again, the investor and Realtor® will make more money on these deals than I will, and I will do everything I can for them.  But that mental calculation said something about my heart. 

This is something that we all struggle with whether we want to admit it or not.  We are lured into real estate investing with the promise of big, quick, and relatively easy money.  Some investors get out as quickly as they got in.  But for those of us who stay, we eventually come to understand the truth that this is not about money, it is about people and relationships with those people.  Yet, even with that realization there is still a part of us that reduces those relationships down to a dollar amount.

You may be thinking why this matters if we are doing good things for other people.  If they are better off because of the things we do for them, why does it matter?  If you are better off because of the things I teach you, why does it matter?  It matters because it goes to motivation.

A close investor friend of mine came to me a couple months ago complaining that some of the people he is associated with have not been loyal to him.  I told him that the reason people aren’t being loyal to him is because he has done what most of the rest of us have done.  Even though he was teaching ethics and honesty, he was luring them with the promise of big money.  He was teaching them how to make more money.  He had reduced the relationship he had with his students down to a dollar amount, and then he expected loyalty from them.  The focus was on the cash not the relationship.  Is it any wonder there was no real sense of loyalty there?  The reason why there was no loyalty was because there was no strong basis for a loyal relationship.  It was a result of his own doing, and he is not alone.

I have a student in Texas who was complaining about the Maryland law.  He had no idea how anyone could make money if they could not collect the fee up front.  He was shocked to learn that I had no trouble collecting fees after the services were performed.  The difference?  He was focused on the money.  I was focused on the relationship.

Many national speakers have been teaching (and some still do) to grab the deed.  Create a situation where the homeowner cannot back out of the deal.  This is dangerous, unethical, and downright wrong on so many levels.  But I bring it up for this reason:  The reason investors feel the need to do this is because they are focused on the money, not the relationship.  The truth is that if the seller wants to back out, it is a bad deal.  The other truth is that if there is a relationship established between the seller and the investor, the likelihood that the seller will back out is near zero.

Most students don’t believe me when I tell them that networking is the best marketing they will ever do.  It is too easy and inexpensive for them.  I have built my entire business on these relationships.  Like everyone else I have made really stupid mistakes.  Yet I am still in business.  The only reason I am still in business is because of the relationships I have been able to form with others.  Even though I am good at building these networks and relationships, I will still sometimes make that mental calculation.  That mental calculation harms the relationships I am in and I am working to fix that problem in my heart.

So what about you?  Are you pursuing money or are you pursuing relationships?  Are you looking for loyalty but not building the foundation on which to base and expect that loyalty?  Are you focused on what you get from a transaction, relationship, or other event or are you focused on what you can offer to others?  I am not asking you to answer these questions on a superficial level.  I am asking you to go much deeper.  Most people would say my mental calculation is no big deal.  On the surface, I agree with them.  But when I look deeper, I believe it is a big deal and one worthy of change.  Are you willing to dig deep, see the truth that you may not want to see, and then work for change?  If you do I believe you will reap the rewards.

Take care and happy investing!

Bruce..

I was just about to write a post about the presidential election when I got this email quoted below.  It is a story that is not uncommon and it moved me to change the topic of this post.  Here is the text of the email:

I always felt kinda cheated being from the Phila. area (Ardmore -What they call the Main Line) when ever foreclosure came up it was always about Md.

I was in a coaching program (********* ****** ***** out of Naples Fa.) until I ran out of money.

They had Me sending first a series of 6 Mailings Then 12 Mailings with different messages Each one had a different Ex # to a !-800 #(so I had a 1-800 # with 20 EX) I had a skip tracer they recommended I rented and set up an office the way they told Me to get ready for the on slot I down loaded the list directly from the courthouse every wk.

Started a mail campaign

Used the skip tracer to get their #s

Voice blasted to let them Know an important piece of mail would be arriving And after all that I received 1 phone call to 1 of the educational messages Bruce I still think foreclosures are the greatest I thought Mr Foreclosure Had a great plan(but You are the expert) I have not done a deal of any kind I joined DC Reia for the Education I blew $20k on that coaching program I am broke but willing to work Would You be interested in going into a partnership I (but I don’t know any thing) think in an area like wear I live the average home is 750k to 1mil (I rent on the poor side of town)that the strategies that We heard last Sat. would work Thank You For Your time looking forward to hearing from You

Regards

 

I removed the name of the program because I don’t like to bad mouth my competition and because this story could have come from any one of a number of national speakers and programs that are available today.

Quite honestly before I created the Inner Circle program some of my students probably had similar experiences.  To be truthful, I don’t feel very good about this.  During the time I was teaching high cost boot camps, I was told that if the students didn’t spend the money with me, they would be spending it with someone else.  The sad thing is that it is true. 

I know some people who would go to one conference and spend $20,000.00 there, then go to another one and spend another $35,000.00.  Don’t get me wrong.  Education is important.  But, you need to use the income you get from doing what you are taught in the beginning to fund the rest of your education.

So how do you get ahead?  The first rule is not to go into significant debt learning how to become wealthy.  It makes no sense to me to go broke before you can start building wealth.  I know one speaker who has a two day wealth seminar.  On day one they teach the students how to increase the credit limit on their credit cards.  The second day, they teach the students how to spend that increased limit.  This is just wrong in so many ways.  The fact is that you are starting a new business.  While it is possible to get your first deal done within the first 45 days, it is not the norm.  It takes time to start and grow a business.  It also takes some money.  It doesn’t necessarily take a lot of money but it does take some.  If you spend all of your money learning how to start your business, you then don’t have the money you need to start that business.  As a result, you end up with an expensive education and no place to use it.

The second rule is to start building relationships.  It is through these relationships that you will do the majority of your business. You will need to do some marketing, but the relationships you build will end up being the core of your business.

One of the relationships you will need is a mentor.  You don’t necessarily need one on one mentoring, but you need to plug into someone who is already had success doing what you want to do.  For most people teleclasses, webinars, and forums provide enough personalized education to help them be successful.  While I have done personal one on one mentoring, I think it is more cost effective and just as beneficial for most students to rely on web delivered content, teleclasses, webinars and forums.

Finally, you need to keep focused.  Keep your eye on the ball and never give up.  Most people who try to do something new will quit just before they are about to achieve some success.  Stay focused, be tenacious, don’t listen to anyone who has not achieved the success you want to achieve, put off non-essential purchases, never quit voluntarily, and never spend so much money you have to quit.

You can do it.

Bruce..