Control Your Wealth

Last week I ended my blog by talking about the huge importance of saving a minimum of 10% of your income as the first step to achieving total financial freedom and making that savings plan an absolute habit so you do it automatically every time.

But now what to do with that money? Where do you invest it for the best possible return with a reasonable low risk?

One rule that I’ve kept for life in investing is to never turn over total control of my money to someone else. As a stockbroker many years ago, I played in the market and usually lost money or just broke even. Part of the reason was that not only did I have no say or control over the company I bought into but I also had absolutely no control over the stock market and the direction it went.

But then I met a guy who became my wonderful and brilliant coach, Larry Rosenberg. He convinced me that improved rental real estate was the safest and most consistent way to build a fortune. Why? Because if you buy right and buy a property that needs improvement, you can reap huge returns and much of what happens with your investment is in your control.

First of all, you have the power of leverage you can apply when you have the right assets. In other words, if you fix up a property and raise its value by, say, 15% then that 15% improvement in value can turn your investment into a fat 60% on your money! That huge return is based on your choices. In this case, you would put a 20% down payment on it and keep fix up costs at about 5%. These are your decisions to make and therefore you have some control over how well you make out on the investment.

Even today, after 40 years of experience, I still say the best investment that allows you the most control, especially in today’s market with these very low interest rates, is real estate. I started with a small house on the wrong side of town and after I fixed if it didn’t sell right away I usually could rent it out so I had a tenant whose rent I was able to set so that it was paying off the mortgage, usually with a little left over for me. Then I moved on to larger and larger properties which I was able to work pretty much the same way and I still use this strategy today.

The other thing I do to keep control besides investing in the right property and making smart decisions to keep money flowing in, is to be careful with how I set up any partnerships. When I do deals and have a partner or two they always have their name on the deed showing the percentage interest they have in the property with everything spelled out clearly. If all investors insisted on doing it this way, it certainly would cut down dramatically on all the scams and Ponzi schemes. But it also means all the partners know what to expect and there are no out of control surprises later on.

So if you are smart and want to make those big bucks you’ll get out there, take and keep control of your investments, and keep focused on the great power of compounding and leveraging. Next week we’ll go into those subjects a bit more to keep you focused on your goal!

 

Make America and You Greater

I think most of us are getting pretty feed up and bored with politics lately.  I mean every time you turn around you see or hear more news about the race for the White House and, of course, the face you see most often is that of Donald Trump.  I don’t know about you but I’ve had enough of that big bully, loud-mouthed Trump to last a life-time.  This know-it-all thinks he’s the smartest man in the world but his campaign slogan is “Make America Great Again”. Every time I see that baseball cap with those words on it, I think, “Wow … when did America stop being great?”

I’ve traveled the world, visiting 84 different countries as well as living two years in the middle east and two years in England and I can say, without hesitation, that we have a great country and it’s constantly getting greater. I fear that might not hold true if Trump became president, however.

Ours truly is a land of great freedom and opportunity where you can start off being dirt poor and still become a millionaire. It happened in the 1930’s and in the 1970’s and it’s still happening today. So how does a person take advantage of our freedom’s and opportunities?

Continuing on last week’s post about the power of the brain and how we can program and teach our brain with enough repetition to act automatically without conscious thought, here’s the beginning key to achieving financial greatness in our great country. Step one is to start training your brain to calculate out at least 10% of every single dollar you earn and then you set it aside and never spend it and I mean NEVER. This is investment money, not spending money. So just keep doing that over and over again until it is such an automatic habit that you don’t even have to consciously think about it.

If you have followed me very long you know what comes next.  You take those savings after months or years and wisely invest them.  And that, my friends, is the beginning of a sure fire way to become wealthy in one of the greatest countries in the world, if not the greatest.

Next week I’ll lay out the best investments to make in today’s economy and the way to make those investments. You get started on the savings part and I’ll get you prepared for investing in the great USA.

 

The Brain and Robot Tennis

 

Sometime ago I read a book about The Secret Lives of the Brain which was actually the subtitle of the great book entitled Incognito by David Eagleman. The part of the book that really grabbed my attention was what he said about the part of the brain that you can teach exactly how to hit a tennis ball almost perfectly every time without even thinking about it.

Being an avid tennis fan and sometimes tournament player myself, and with my own experience pretty much backing up and proving what he was saying, he had my undivided attention. Many times while playing, I’ve surprised myself when I am running full speed to get to a tennis ball coming at me at 65 or 75 miles an hour, then to arrive at the exact right spot and hit the ball back to the place I was aiming. Wow, I’m thinking … how did I ever do that?

Eagleman, a neuroscientist, makes the case that tennis shots are made almost entirely without using the conscious mind. Of course, to get to the point of great non-thinking tennis shots, anyone who wants to be that good needs to use the other part of the brain–the conscious part that is the part that thinks through what goals a person wants to achieve. So with the conscious brain a tennis champion wannabe sets the goals to fulfill their dream tennis performance.

The author of this book is not just talking about these two parts of the brain being used to be a great tennis player either. You can use both parts of the brain to become very good in many areas of our lives, whether it’s to become a great public speaker, great writer of books, making a fortune, or creating super health for yourself and others. It will work for whatever you really want to do and be.

But that’s just the first part, because after you use the conscious part of your mind to set your goals, you then need to practice and drill over and over again. If you do that for many, many hours over a good length of time you will begin to program your unconscious mind so eventually it will perform for you without your thinking about it. It will be automatic. It might take thousands of hours but studies have shown that anyone that spends 10,000 hours doing one thing they most likely will become one of the best in the world at that one thing.

Under the chapter subheading “The Robot that Won Wimbledon”, David Eagleman concludes that, “The competitors at Wimbledon are rapid, efficient machines that play tennis shockingly well. They can track a ball traveling ninety miles per hour, move toward it rapidly, and orient a small surface to intersect its trajectory. And these professional tennis players do almost none of this consciously. In exactly the same way that you read letters on a page or change lanes, they rely entirely on their unconscious machinery. They are, for all practical purposes, robots. Indeed, when Ilie Nastase lost the Wimbledon final in 1976, he sullenly said of his winning opponent, Bjorn Borg, ‘He’s a robot from outer space.’”

Today I would say the same thing about Roger Federer and Novak Djokovic. But remember folks these two parts of our brain can be used for many more things than tennis! Let’s all work on that.

Recognizing Reality

Did you get to read the post from last week when we started talking about common sense? Well while that was about using common sense when getting help and advice from the professionals that support your business, this week, let’s talk about common sense when deciding what financial deals to get in on. Here is just a little more from my old publication, The Financial Freedom Report.

One definition of common sense is “what is sound and prudent but often unsophisticated”. I’ve seen many very sophisticated business decisions that have lost millions of dollars. To avoid financial traps, you need a huge dose of common sense, especially when those all around you are playing sophisticated and getting wrapped up with what is hot or in vogue. Common sense will keep you from being trapped or pushed or bullied or shocked into doing a deal that you don’t want to do.

There are many high powered, complex formulas for success and financial independence, most of which are so mind boggling it would take a PhD to understand them. Many of these formulas were written by people who never actually made big money themselves but sat back and watched others do it. From a spectator’s position they think they know the answers and then they make things so complex and involved that the average person cannot understand them. Take it from me, making a lot of money in a short period of time can be done with a simple game plan. I said simple not easy, since it takes tons of work. You are probably already working very hard but maybe not with the right game plan.

When I studied the lives and fortunes of two dozen millionaires and multi-millionaires, I was looking for a common denominator, something they all did that accounted for their success. I finally noticed factors that were present in almost every fortune. I slowly eliminated those factors that didn’t show up in every case. What I ended up with was basic and somewhat obvious, although it escapes 96 percent of those who look for it.

There are four essential ingredients, and I put them into a formula I call “PSIC”, which simply translates into P=Plan, S=Save, I=Invest, C=Compound. And I will add now in order to compound at high rates you need to use leverage.  

An insistent, fast-talking, and even somewhat logical person many times can persuade somebody to do something he doesn’t really want to do. If somebody asked you if you would like to get in on this super-hot deal that will pay you a 250 percent return without any risk and without a lot of your effort, what does your common sense tell you? Common sense should tell you that if a deal were really that good, the guy trying to sell you the deal and or the promoters behind him would probably not have trouble getting the needed money as a loan from a bank.

The simple fact is, those kinds of returns don’t exist. Yes, it is possible for you to get 100 and 200 and even higher percent returns, but not without a lot of work on your part and certainly not without any risk.  Deals like that don’t come all packaged neat and simple, especially without risk and without great effort on your part. Believe me it won’t happen! If I had a deal with a return like that (and I have had those kind of deals) you’d better believe that I would be able to borrow a whole lot of money, which I have done many times, even if I had to pay 2 or 3 times the going rate of interest. Common sense is recognizing reality and then acting accordingly.

Supporting Roles in Your Success

Last week, I shared with you some great advice from an old publication of mine, The Financial Freedom Report. I quoted from an article published in the Summer of 1995 entitled “Ask Your Barber How to Cut Hair, Not How to Make Money” which was simply saying that people who aren’t a super success as making money are not the people you want to talk to. However, there are some people you will need on the sidelines, but like knowing who to go to for advice on money, know who to go for advice on the other things you’ll need along the way, and when to bring them in.

Generally speaking, I find from experience, attorneys are deal breakers, not deal makers. Knowing that, I usually structure the whole deal before I have an attorney get involved at all. Yes, I want him or her involved. When? Just before I sign the papers. I want the attorney to read the contract to a make sure that everything is legal.

Problems can arise when the attorney steps into a management role. When going to an attorney for legal advice, you should always be sure that you ask very precise questions and not let the attorney overstep his bounds. He will if you let him. He has to play the devil’s advocate, and that is good. The same applies to your CPA, your business managers, and your bankers.

A man by the name of Owen Feltham said, “The greatest results in life are usually attained by simple means and the exercise of ordinary qualities. These may for the most part be summed up in these two words “common sense.”

So what is the bottom line from these words written so long ago? Use common sense when choosing who to go to for advice as well as what advice you take from people, even if they are “professionals” because if the advice doesn’t have anything to do with their profession, your common sense meter should be telling you to set that advice aside and have a word or two with someone that really knows what they are talking about in those matters.

Next week, just a bit more from my old publication but this time we’ll talk about common sense deals and how to avoid getting taken by fast talkers and their so-called ‘advice’.

Surround Yourself with Makers

I happen to pick up an old copy of a publication that I produced for many years called The Financial Freedom Report. It was dated the Summer of 1995 and the article that caught my eye was “Ask Your Barber How to Cut Hair, Not How to Make Money”. I quickly reread what had written all those years ago about that statement and it’s something that needs to be repeated and practiced today. Here’s what I said.

It is amazing how many people seek or listen to financial advice from neighbors who are in approximately the same financial position as themselves. Others run to their bankers to ask if a particular deal is any good or not. What do bankers know about deals? Zip! Sure, a banker knows about loans and checking accounts, and they know a lot about accounting and borrowing and lending money because that is their business. Deals are not. Since people know that there is money in banks, they tend to think that the bankers know how to earn it. Remember they are just custodians; they are just janitors of money. It’s not their own money. It’s yours.

Barbers work on heads, but that doesn’t make them psychologists, because they only work on the outside of the head, so their psychological advice or advice on how to make money is not very credible. Avoid the trap of looking to the wrong outside sources by doing some of your own thinking.

The best way to learn how to make money is with somebody who has made a lot of it. What better place to go than to an entrepreneur who started from scratch and did it all themselves? I wouldn’t even want to go to David Rockefeller. Sure, he has several hundred million dollars and he is the chairman of the board of one of the largest banks in the world, but his grandfather, John D. Rockefeller was the one who made the big bucks.

Everybody needs advisers, but the advisers you need to surround yourself with should be deal makers, not breakers. Sure, you and only you should be the one making the final decisions, but I find that all of us can be influenced and helped by smart people whose opinions we hold in high regard.

Next week, I’ll reveal a bit more about the subject with more from this very same article. Although it was written over 2 decades ago, the ideas in it are still true today. The best ideas do stand up over time!

Celebrating Life

I just flew from Kauai into Salt Lake City. Yep from the beach and palm trees to snow and cold—brrr! We are staying in Utah for just a few days. We made this special quick trip from paradise to the snow country of Park City and Deer Valley Utah for the grand celebration of the life of the legendary world champion skier and our dear, wonderful friend, Stein Eriksen.  In my January 2nd blog I talked about my 2016 New Year’s Resolution to follow Stein and Francoise example of being a great friend; my goal is to be a much better friend and cultivate more and more friends.

When you live 88 years as Stein did, a celebration of life makes so much more sense than that thing they call a ‘funeral’.  My message this week is a simple one.  Life is so very short and no one knows when their life is going to end but we all know that it will end at some point.  So to have a fuller life, we all need to celebrate each and every day. Or as my license plate on my new Tesla reads, “CARPIDM” which is an abbreviated version of ‘carpe diem’ which, of course, means ‘seize the day’.

Let’s set a goal to make every day count and make every day a celebration of our lives and spread that celebration and up beat feeling to all those around us. And do more of that celebration with our family and friends.  Live in the now! We all know we should do that so let’s be more aware of the importance of living in the now and in today and do it every day.  Remember, even if you live to be 100 years old that’s only 36,500 days and for me that only leaves 10,160, so I certainly need to practice what I am now preaching to you!

 

 

The Breath-Mind Connection

So how about this breathing thing.  I showed you last week how just the simple act of smiling can help to change how you think and how you feel. But how can breathing change your brain?

I’m pretty sure all of us have seen this–when we experience a big scare, our breathing speeds up immediately. This response in the increased speed of our breath also occurs, to varying degrees, when we are under any kind of stress. And as you might guess from reading my posts the last couple weeks, faster breathing can also increase your feeling of stress. The obvious conclusion is that you will want to slow your breathing to help manage and alleviate stress.

I will never forget watching this TV special with a yoga practitioner that had been hooked up to heart rate and blood pressure machines before sitting down to meditate. He assumed his yoga position and began using his mind to slow down his breathing. As he did, the monitors showed that his decreased speed in breath also resulted in his heart rate and blood pressure dropping.  It was a great demonstration of that mind-body connection we’ve been talking about.

Amy Cuddy in her book Presence quotes a psychiatrist and a PTS expert Bessel van der Kolk who said, “Some 80 percent of the fibers of the vagus nerve (which connects the brain with many internal organs) are afferent, that is, they run from the body into the brain. This means that we can directly train our arousal system by the way we breathe, chant, and move, a principle that has been utilized since time immemorial in places like China and India.”

Amy goes on to say “That’s one of the reason yoga can change the way you feel–it naturally prompts you to breathe slowly and rhythmically, as you do practices such as chanting, tai chi, qigong, and meditation. But you don’t need to do any of those; you can reap the benefits of breath control almost anywhere at any time. With a few deep, slow breaths, you’ve just changed your body and your mind.”

She goes on to give this good advice: “Take a second right now to focus on your breath. Inhale quickly, then slowly exhale.  One more time. Inhale for two seconds, then draw out your exhale for around five seconds.”  Go ahead. Do it over and over again and see how it makes you feel.

I find the beauty of all this–power posing, smiling and controlling the breath–can all be done at the same time or done one at a time at almost any time or in any place. Such simple practices can make changes for the good in your life.

Ok … maybe we are better off not power posing on an airplane. You never know how the crew and other passengers will take that.

The Smile-Mind Connection

I had such a great response from last week’s blog on the power and confidence that is generated from ‘power posing’ that it motivated me to dig deeper to try to find other body-mind and mind-body connections that can help and improve people’s lives. The two that caught my attention were smiling and breathing. Let’s start by checking out that Smile-Mind connection this week.

There are some fascinating conclusions that come from several studies behind what the human smile can do for the body and the mind. Research has shown over and over again that the simple act of smiling reduces stress and, just like power posing, smiling releases endorphins in your brain which make you feel happy in addition to relieving stress.

Additionally, I was quite surprised to learn that studies have also shown that even if you force a smile your brain can’t tell it’s a fake and it will release the same good endorphins and reduces the harmful levels of cortisol in your body.  So hey, why not start forcing a smile even when you don’t feel like smiling at all? You should soon find your smile is no longer forced!

We can all learn a lesson or two about smiling from kids.  Watch them at play.  How much do they smile?  Even if they are only playing with a card board box that delivered a toy for their sibling, you will no doubt observe lots of laughing and smiling.  Kids usually smile about 400 times a day whereas even happy adults have been found to smile only 40 or 50 times a day. Worse yet, the average of all adults is only 20 smiles a day. That is little more than one smile an hour while we are awake.

So, okay … let’s all start smiling more, even when we don’t feel like it. I started doing the smile thing while power posing and it seems to be working. Besides, there is certainly much to smile about in your life. If you don’t think so now, try smiling more often and I bet it will be easier to see as well as feel the joy in your life.

Next week we’ll get to that other connection I found so interested—breathing and how it can change things in our bodies.

For many years, science has proven that there is a definite mind/body connection. That is, our thoughts and self-talk can stimulate changes in our bodies. We’ve all experienced changes in our bodies when, for example a sudden fearful thought pops into our mind. Our bodies can quickly begin to perspire, produce adrenaline, or make our faces flush.

Likewise, a very pleasant thought or positive self-talk can relax our muscles, slow our heart rate and even lower our blood pressure. If we use that mind/body connection in the right way, we can make big and positive changes in our lives. I have certainly experienced that on the tennis court by doing a lot of specific positive self-talk before I play a match. I repeat over and over again statements like, “I have great stamina and energy,” I have a very powerful serve,” or “I stay positive and upbeat.” On the negative side, I learned a long time ago not to say, at critical times in a match, things like, “Oh, I just can’t double fault now!” as apparently the brain locks onto the “double fault” words and misses the word “can’t”. And yep, that’s when a double fault happens.

But now comes some new discoveries about this connection. It’s kind of the reverse—it’s a body/mind connection. Several recent studies have shown that certain things we do with our bodies send a message to our brain. Those messages can be very helpful or very hurtful.

This body to mind connection was introduced to me just last month when I heard Amy Cuddy, an American social psychologist, talk about it. I was so surprised and impressed that I bought her book, Presence, the first day it was released. What a great return I am getting as I see and understand more about how the body can change your brain.

Last week I quoted Amy on the subject of better ways to set new years’ resolutions by using baby steps and nudging yourself. I thought her advice on goals setting was good but Chapter 8 entitled “The Body Shapes the Mind” uncovers, what I think, are brilliant ideas. Amy Cuddy, along with some very bright collaborators, began experimenting to see if the human body holds certain poses for about two minutes would that affect or change the human mind. They chose 5 positive poses and 5 weak poses. Probably the most powerful pose was standing up very straight, shoulders back with hands on your hips–what she called the superman pose. Not only did that pose make the person feel much more powerful, happy and confident it also improved their body chemistry. By using blood samples and saliva samples they found that the men and women who participated in the study showed a 19 percent increase in testosterone and a 25 percent decrease in cortisol–which is a stress hormone.

On the other those people that held a 2 minutes low-power pose like slumped down in a chair, head down and tucked in arms, had a 10 percent decrease in testosterone and a 17 increase in cortisol. Amy goes on to say “the way you carry yourself is a source of person power–the kind of power that is the key to presence. It’s the key that allows you to unlock yourself, your abilities, your creativity, your courage and even your generosity. Taking control of your body language is not just about posing in a powerful way. It’s also about the fact that we pose in powerless way much more often than we think and we need to change that.”

So when you want to feel better about yourself and feel more powerful in your life, remember that how you hold your body can change things in your brain. I’m going to start power posing before my tennis games like Amy does just before she gives a speech. In the quiet of her hotel room she stands in the superman power pose for 2 minutes which gives her the right attitude and confidence to go out there and give a terrific speech!

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