The 66 Day Habit

I thought that changing the habit of driving on the right side of the road to the left side as I did recently in Ireland was a tough habit to change. Well, believe it or not driving my new car here in America is proving to be just about as hard. Ok, I can hear you asking, how can driving a new car on the right side of the road in the country you grew up in require a person to form a new habit?  Well, the car is different from every car I’ve ever had. It’s a Tesla and it can operate almost completely on its own. So why would that require a change of habit? Because all of us are in the habit of controlling our car and it’s counter-intuitive to turn that power over to the car and its computer.

Especially if you are traveling at 80 miles an hour on the freeway in traffic and going around curves.

I’ve had the Tesla for a little over a month and I am still working on shifting my usual driving habits. I remember reading many years ago that changing or developing a new habit takes 21 days. I think I read that in an old classic book by Maxwell Maltz, Psycho Cybernetics. So here it’s been over a month and I’m still trying to relax and let the car take over.

I began to question the 21-day thing and found out that was a bit of a myth started by Maltz all those years ago. A more recent study done by Phillippa Lally, a health psychologist at University college London, studied 96 people as they tried to change a habit. Her research showed that a change in habit or developing a totally new habit takes a little over 2 months–66 days to be more accurate. This is a very good thing to know because our habits, good and bad, really make or break our entire lives and if we held on to the 21-day myth we could easily become disappointed when we failed to change or develop a habit after 3 weeks. This could cause us to give up.

When I look at my own life with its big ups and downs I can’t help but see where some bad habits have held me back, causing me pain and failure. But then again, when I look at the good habits I have, I can see why it was such a good thing that I worked hard to form them. My dad for example, pushed and pushed me to form the habit of reading good books, which I finally did. I also pushed myself to develop the habit of working out, running, walking a ton and playing tennis virtually every single day and now at almost age 72 I am seeing the huge benefit of this habit and it’s not even hard to do anymore.

I also have to attribute my wealth to forming some very powerful and productive financial habits that have served me so well. Some are very simple, like saving at least 10% of every bit of income, which I did even when I was poor and making only $600 a month. Early on I also formed the habit of reading every financial book I could get my hands on as well as investing every penny I could into wise investments.

So I would plead with you to look at yourself and your habits and make a list of both your good and bad habits noting how the good ones serve and the bad ones aggravate your life and your family. Determine to keep up with the good ones but also add new habits and to change the bad ones. Stick with each new or changed habit for at least 66 days and watch the results! Try also to get your kids, significant other, parents and friends to do the same thing. I pretty sure you won’t be sorry.

A well ingrained habit is second nature and we will do it automatically, even those things we don’t enjoy doing all that much. The thing is, we love the results and if you keep your eye on what good habits can do for you, you can do it 66 times and beyond.

 

 

Employing the AB Split

Yesterday I sat down with a young man who asked for a little mentoring from me.  He had started writing a novel and wanted some coaching as to how he could get a publisher and or a literary agent.  I explained to him, first of all, how tough it was to get a publisher.  There are over 200,000 new books published every year and probably 10 times that many books that try to get published but are turned down.  I told him how I eventually got my first book published and how that didn’t happen until I had sold several hundred thousand copies by myself. Of course, he wanted to know how I did that. What I told him is something that can help anyone to achieve great success with almost any venture they are interested in pursuing.

Many years ago one of my mentors introduced me to a very simple but very powerful method of marketing.  In simple terms it’s called an AB split—it’s an easy way to measure anything from what price is the best price to charge to what words in an advertisement, book title, product name or anything else will be the best to use to grab people’s attention.

You can test two prices in a newspaper ad, for instance, by spending just a few extra bucks to have one ad show a $25 price printed in half the newspapers, then list a $45 price in the other half of the print run.  After looking at the orders you receive, you will know which price your customers preferred by simply counting up the orders you received for each price listed. The same AB split can be used with snail mailings or internet marketing, radio, TV or phone solicitations. And that’s just the beginning.  You can test what title would be best for a new book, or the best headline for an advertisement or the best words and story to tell in the body copy of a lengthy ad.

When I couldn’t get a publisher to take on my first book I began using the AB split method and quickly and quite inexpensively found out that the “How to Wake up the Financial Genius Inside You” title of the book and the headline in my advertisements was far superior to the headline “How to Become a Millionaire”.  I then used the AB split to discover what price was best, using newspapers, mailings and TV ads.  Wow, once I found the best price and the best headlines and body copy to use, things went crazy as I began advertising just about everywhere, in newspapers, radio, TV and mass mailings.  The orders came rolling in by the thousands and eventually that money led me to publish a newsletter that morphed into a magazine with over 50,000 subscribers.  All of that, plus some, coming primarily from the use of the AB split method.

I don’t know what the young man who wants to be a big time novelist will do with what I told him but if he applies the AB concept to getting his book out there and sticks with it, I’m pretty sure he’ll soon see huge numbers for his book along with many lifetime rewards and a ton of satisfaction.

Forging Past the Fear

Well I did it! I gave my one-hour presentation to the MBA students at Utah State University on ‘How to Make Millions by Wise Investing’. If you recall from last week’s post, this speech had caused me some fear and anxiety. But after 5 or 10 minutes the fear and anxiety that had been gripping me diminished and finally totally disappeared. The students were great, as was the professor. They asked some great questions and it all went quite well. Yay! I guess I acted out the title of Susan Jeffers great little book Feel the Fear and Do It Anyway.

It’s fascinating to me that a huge percentage of people don’t step outside their comfort zone when it comes to investing as a direct result from that thing we know as fear. It might be fear of the unknown, fear of losing their money or sometimes just plain fear of taking any risks at all. I look back at my younger years (now called “my warrior years”) and remember how quite a few of my peers, people that were just as smart as me and sometimes a lot smarter, knew what I was doing and how I was doing it and, yes, knew that I was having some very big financial gains. However, they didn’t dare step up to do the same thing I was doing. I’m pretty sure the reason was primarily because of fear.

Looking back now I’m pretty sure I didn’t share with them that I had huge fears myself. The thing is, I forged ahead anyways and took the risks and it paid off. I wish I could go back in time and share those fears that I felt with those friends. I think if I had done that then many of those people might have taken a few more calculated risks, pushing past their fears and ending up with the kind of success that I experienced.

I think you would agree that many of our fears come from us thinking  things like “Oh, what if I fail? What will my friends and family think of me? What if I lose all my money?” But like I told the MBA’s, everyone fails from time to time! The key is to learn from your mistakes and be sure not to beat yourself up. It’s okay to fail. No human is immune to failure but if you pick yourself up and keep trying, your success, in investing to create your fortune or just about any part of your life, will far outweigh your failures.

The ‘Refrain but Don’t Repress’ Approach to Destroying Bad Habits

As human beings, we have many good habits that we’ve formed and held onto in our lives and then there are some bad habits that we’d really like to dump. Like most of us, you have probably observed and experienced how very difficult it is to change bad habits, whether the bad habit is overeating, overworking, sleeping too much or too little, watching too much TV, checking our email or text compulsively or some even worse habit or addiction.

In the last few weeks I’ve been reading an incredible book that I believe sheds tremendous light on habits including how to form good ones and how to break bad ones. The book by Pema Chodron is entitled Living Beautifully. I must admit that even though I’ve formed lots of good habits that have led to some very wonderful and rewarding successes in parts of my life, I’ve also had some bad habits that have hurt me, and it’s been so very frustrating for me to try to break or change the bad ones only to fail and fall back into them. But Pema’s book has some real answers and directions that, so far, seem to be a quite a breakthrough.

First of all, she outlines that part of the reason we have trouble breaking bad habits is because we are too hard on ourselves.  What most of us do when we end up doing something that we’ve tried to stop doing, is to get mad at ourselves, beating ourselves up mentally, then we try to repress our thinking and whatever we did that broke our promise to ourselves. She strongly suggests that instead, we come to recognize that we are fundamentally good rather than fundamentally flawed.

Probably Pema’s biggest lesson for us is a bit surprising. She suggests that if we are trying to break a bad habit, we need to think hard on refraining from doing what we promised ourselves but DON’T repress it. She goes on to say that many bad habits come from us trying to escape from uncertainty and fear in our lives in particular situations.  So when we are faced with the desire to fall into that bad habit, we need to examine our thinking to see what led us to that point and then just try to refrain from that action but not repress those thoughts.

Pema has science backing her up on this issue.  She says “Science is demonstrating that every time we refrain but don’t repress, new neural pathways open up in the brain. In not taking the old escape routes, we’re predisposing ourselves to a new way of seeing ourselves, a new way of relating to the mysteriously unpredictable world in which we live.” And in the process we are hard wiring our brain to do the right thing automatically.

What I learned from Pema is already working well on a couple bad habits that I’ve been trying to break for years and I am so pleased!! Try it yourself and you may well see what I mean and find success.

Real Estate Investing: The Advantages Never Change

Yesterday I was going through a bunch of old files and I came across a large envelope that my good friend Joe Sugarman sent me. Joe is the founder of the company that introduced the Blueblocker sunglasses that sold millions, making Joe a very, very rich man. In the package was a few of my old ads that Joe had kept.  On the old yellowed paper I re-read one of my first half page ads printed in the Wall Street Journal on January 25, 1977. The headline read “How to Achieve Total Financial Freedom”.  I am totally convinced that the reason the ad sold so many copies of my first book, How to Wake Up the Financial Genius Inside You, had less to do with the semi-catchy headline than the sub-header that read, “Millionaires Are Not 100 Times Smarter Than You, They Just Know The Wealth Formula”. I’m sure that most people read that and it rang true to them. Because it is true.

In the body of the ad I went on to say, “Millionaires are not 100 or even 10 times smarter than you , but it is a fact that millionaires are making 10 to 50 or even 100 times more than you.” Additionally, I should consider that millionaires are not working 100 or even 20 times harder or longer than you either. There are not enough hours in the day to work 20 times longer than your average worker! And now, 38 years later, I can clearly see that the formula to making big money and accumulating great wealth is basically the same today as it was way back then.

I can tell you for sure that if I were just starting out now as a young man without any money to speak of, just like I was years ago, I would pursue the same path as I did back then.  The only difference would be that I might be a little more aggressive today than I was then. Today’s market is ripe for the picking!  For the most part the only push back that I have had in recent years from readers of the Financial Genius book is that buying properties at the prices given in the book are just not possible in today’s market.  And those critics are absolutely correct, but the ratios are still pretty much the same.  In other words today you can’t find “dirt bag” properties for prices like $40,000 or $50,000 in most markets. And that’s correct.  But the ratios for what you can make on your investment are still the same.

In many cases, you can gain a 33% value increase on a dirt bag property you fix up. On a $50,000 property, that would be a little more than $66,000. But today, you may have to pay $120,000 or $200,000 dollars for a beat up property but after fixing it up, you could sell the $120,000 purchase for at least $159,000 and the $200,000 investment for $266,000 or more. Yes, these numbers don’t take into account the money you spent on fixing it up, but if you leveraged the deal with a mortgage–using someone else’s money to make money–you will find that the return on your investment goes up a ton and will usually more than make up for your fix up expenses.  So bottom line here is don’t get hung up on the lower price examples in the book, invest and pay attention to the percentages you can gain.

To help with that, I have recently updated my Financial Genius book. It will be going to the printer before too long and I will let you know here when it’s ready for ordering.

The Failing of Stock Market Investments: Human Nature

In last week’s blog I talked about the wild stock market moves and the huge sell off, which was followed quickly by a rebound of prices. Since then we’ve had another pull back of prices once again erasing some of the gains. Some people would point to the big spring back of prices and make the argument against my conclusion that for most people investing in ‘real estate’ is a much better place for their money.

It is true that, in most cases, the market does rebound and in the long run you can make some money there as long as you buy good growing companies. The key here, as Warren Buffett has preached for years, is to buy the right stocks and hold them for the very long term. The big problem, however, is most people don’t do that. Why? It seems to be connected to our human nature. You see, when many, if not most, people buy a stock and they see it gain, say 50%, they sell it because, as I heard hundreds of times when I was a stock broker, “Hey, you can’t go broke taking a profit!” But the thing is, that stock may end up being the next Microsoft or Apple Computer company, subsequently moving up another 50% or 100% or 1000% or more over time.

On the other side, there’s the typical part time stock investor who buys a stock at $20 only to watch it drop to $10 a share, says to themselves, “I am not going to take a loss on this so I won’t sell it now.” So they hold on and wait. Over time I think you can guess what will happen. Yep, those kind of investors end up with a portfolio full of crummy, terrible, loser stocks. They kept the ones that went down and sold the ones that went up.

A big part of the problem with stocks is anyone can quickly and easily buy or sell with very little effort and that can lead to impulsive decisions. Greed and fear can cause that quick buying and selling of stock reaction–usually not a good idea. However with income producing real estate, impulse buying or selling doesn’t usually happen since it all takes more time and, of course, more effort.

But because of that ‘time and effort’ factor, most people that buy income producing properties buy and hold for the long term and if they’ve done it even half right they are collecting enough income in rents to more than cover their expenses which gives them the great benefit of being able to wait–sometimes for a very long time–until they can sell the property for a sizable gain! That’s why I love real estate.  It is also what primarily got me to leave the stock business and move into the real estate investing business. I do hope if you are not already investing in real estate, you’ll start very soon.

A Case for Diversification

Wow! What a wild stock market we’ve had the last few days. Over a trillion dollars in lost value. Can you imagine having virtually all your asset held in stocks? I was asked the other night at a party, by a person that apparently was hurt pretty badly by this, how much money this huge sell off of stocks cost me. I answered that it had virtually no impact on my assets and or net worth. How is this possible? Well, it’s simple … I own just one small position in one publicly traded stock. Maybe in the long run the market drop will have an effect on real estate property values–that’s where I have almost all my net worth– but I very much doubt it.

Yes, I used to be a stock broker many, many years ago and would buy and sell stock for myself frequently, but I learned the hard way that even very smart people can lose money very quickly in the stock market. Even if you buy great stocks and those companies are making money and doing well, if the overall market takes a big hit like it has done the last few days, your good strong company stock usually goes down with the market. One of the big reasons I moved almost all my assets into improved, rent generating real estate is because I had a least some control over the asset that I owned. You see, with stocks, you not only don’t control the company or the people that are running the company, but you have no control over what the overall stock market is doing.

You may be thinking, “Okay, I agree with all that but putting my money in improved real estate takes a lot of work and effort.” And you would be correct. It does take work but the rewards can be so great and much of the work can be turned over to others. I’ve certainly found that to be true and the huge surprise and benefit to me was that I found people that do a better job finding, fixing and managing the properties than I do, or I should say “did”. I’m a big time delegator now.

At a minimum, I would encourage you and anyone that will listen to not put all your eggs in that one ‘stock basket’. Diversity is the smart thing to do and, yes, even though I own very little stock, I do make sure I diversify my asset by owning different kinds of real estate. I own everything from triple net lease buildings with national company tenants to development of storage units to small retail strip malls and even a bit of raw land. A bit of cash always being set aside is a good idea too.

I encourage you to take time to plan out your asset strategy. Don’t be like the majority of Americans who seem to spend a lot more time planning their vacation that they do planning the financial life!

 

 

Money vs. Love

Last weekend we had our yearly Haroldsen/Baird reunion at our home and, oh, what a feast we had! We stand and sit around telling family stories and retelling the classic and most choice stories of past get-togethers and trips. Yes, there was some great food too but when it came down to it, it really was more a feast of love and interaction. That reminded me of a very important idea that I’d like to remind all of you about too.

For years I’ve preached over and over about the basic and best formulas for going out in the world to get and keep lots of money and I think that’s very important. Succeeding in financial matters really can improve and lift your life and those loved ones around you.  But, never let that ‘money getting’ get in the way of love.

Recently I listened to an author who had just written a book about that huge mine disaster that trapped 33 miners for 69 days, back in 2010 in Chile. When those survivors finally escaped that pit of hell, what they said was very instructive for those who would listen and learn from their experience.  Did any of them think about their houses or their money while they hoped and waited to be rescued?  No, they did not.  Their minds and hearts were fixated on their loved ones … their wives, kids, parents and other people they loved. When our lives are on the line, most everyone realizes what the most important part of their existence is and money is quickly and easily pushed out of our heads by thoughts of those that we love and those that love us. But we don’t need to wait until something terrible happens to remember what really matters.

Back when I was giving seminars, I used to ask the audience, by a show of hands, how many people would like to make and have a net worth of one million dollars. Just about every hand in the audience went up.  I would follow the same line of question with higher numbers: Who would like 10 million and then 100 million dollars? About the same number of hands went shooting into the air.  Then I would ask the question with a bigger number but with a much bigger difference: How many people here would like to make and have a billion dollar net worth, but when you got to the top of that huge financial mountain you arrived there only to find out you didn’t have any friends or relatives that liked you, and certainly didn’t love you, and none of them wanted to be near where you were—you would be totally cut off? There was always a few hands that were raised, very few, but all of those that had their hands in the air were, well, teenagers.

I’m not saying that you shouldn’t set your goals high and go after your fortune and keep on building it bigger and bigger. I mean only that you should think about all the good you can do in the world with that fortune. Always, always, always remember that giving and receiving love is infinitely more important and lifts your soul and your happiness in life to a much higher level than any amount of money ever would. Then live your life giving focus to the things that really matter as well as your big financial goals.

Three More Buried Secrets

A secret is some bit of knowledge that is kept from someone or many someones. Last week I spotlighted those truly terrible secrets … the ones we hid from ourselves! When you are trying to accomplish something that is challenging or simply hard to stick to, you need every tool you can get your hands on. But so often, we have been given these tools and then hide them away. Why is that?

Well, if you read last week’s post, you now know (or have been reminded!) what some of the most important ‘secrets’ are to accomplishing both small and large goals. But wait … there’s more! Let’s take a look at some of the other great ‘secret’ tools you have available to you to make your dreams happen!

No. 5: Establish a routine and keep with it until your routine has truly become a hard and fast ‘habit’!

This is a big one. Form the right habits and you can change your life forever.  You know as well as I do that this is true whether the habit is a good one or a bad one.  Scientist have determined that it takes anywhere between 21 and 66 days to form a solid habit, depending on the person. You and I must stick with the routines that are leading us toward our goals long enough that they become rock solid routines.  If we do that, we’ll see that sticking to our plans and reaching our goals will become easier and easier.

No. 6:  Break down those big goals into what I like to call ‘bite-sized’ steps.  For most of us, and I know for me, if I don’t break it down into small goals or bite sized tasks, those big goals can break me down. Why? Because those big, long term goals can overwhelm the mind and shut a person down. It’s easier to do the small stuff and they eventually add up to something big!

No. 7: Set up a reward system for yourself. That is, when you hit your goal and maybe even along the way as you take those bite sized steps or reach intermediate points or milestones of success, take time to celebrate your victory. You can reward yourself with a special night out on the town or a huge getaway vacation to an exotic place. Whatever it is, make it super special and something that you will always remember.

That is a long list of ‘secrets’ you can use to help you reach your goals. But one last thought–If you don’t hit your goal or you miss a deadline, don’t be too hard on yourself.  Remember, some of the most successful people on the planet had many, many failures as they pursued their big goals.  It really is okay to fail–almost everybody does at some point or another. The thing is, failure can lead to even greater successes, so if you fail and fall down be sure to get right back up, reload and reset and keep going!

 

The Power of Unchangeable Deadlines

Here I am sitting in the Los Angeles on the way to Kauai. I know poor us, right? But what a day! Got up early to bury a rattle snake, fix a broken sprinkler pipe, negotiate the multi-million dollar sale of a property that I’ve been wanting to sell off, pick up the paperwork, write emails to the office and others, do a last check on the swimming pool motor, double check to make sure we have enough gas to make it to the airport, get packed for our trip, etcetera, etcetera, etcetera.  It was quite a morning but so much better than the day before with all the stress and worry about the tight schedule we had today.  But why had I been so stressed?

Well, it’s simple. Before we have a big day planned, whether it’s a trip, a big event or a similar massive change from what we usually do, most of us are filled with stress over the great unknown outcome of all we have to do. When we get going on all the tasks that need to be done, then the stress starts to go away because we are so involved with the ‘doing’.  What’s so amazing to me is that most of us humans can and do get so focused and determined to get these time sensitive and necessary jobs done that we can and do manage to get tons more done than on a normal day. We can amaze ourselves at the efficiency and effectiveness with which we get things done.

I am pretty sure you have, in the past, experienced the same thing as I did these last two days.  I’m so impressed how efficient I can become if I have absolute deadlines that I have to meet. You know, like an airline departure time that won’t wait for me.

I guess we can say that one of the great powers of goal setting is in its time limits. In this case, it’s time limits that are set by others, time frames that can’t and won’t be changed for us.  And that’s probably a good thing.  The problem we have when we set goals for ourselves, whether they are physical, family, health or wealth goals, is that we can cop out and change those goals along the way.  If we can somehow set those goals in real, immovable ways, kind of like an airline flight

Think about that and see if you can come up with a plan or a method that might create for you a deadline that you won’t think about changing or that really is absolutely unchangeable so you can’t even begin to think about not hitting your goal! What would do that for you?

 

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