Great Insights from the Best Teacher

Have you started writing in your own journal yet? If you haven’t, I’m going to try to persuade you to start doing it. Why? Because of the many, many benefits you’ll get not just at the time you write them out, but also down the road. This will be especially true if you write more about how you are feeling and what is quietly running through your brain from day to day.

In addition to writing your thoughts down, you will also want to record what you are doing including those steps you are taking to reach your goals. By writing out your thoughts and feelings as well as your goal items, you will no doubt find, as I have, that the biggest benefits come later when you re-read and revisit those thoughts that were running through your brain at different points of your life. You really can experience some major breakthroughs and some life changing and life enhancing discoveries just by looking back and seeing where you were and what you were doing at various times in your past.

I’ve been keeping my “thought journals” since I was 19 years old. I will admit that as I go back and read some of my thoughts and reasoning it’s down-right hilarious, but I’ve been shocked more than once that some of my recorded thoughts as a young 19 year old are rather profound. It’s so interesting to me to actually learn from myself, from my own words, concepts and thoughts that I had long ago forgotten. Many of us try to learn more about ourselves and want more insights into our minds and our lives. With more insights into our minds we can make big improvements to our lives. And who doesn’t want to be happier, healthier and wealthier? Well, that is what journaling can help you with.

Now as we begin a new year I think it would be the perfect time to start your own “thought journal”. If you are already journaling your journey and recording your thoughts and feelings, keep it up. And maybe now it would be good to take some time and re-read some old entries and see what you can learn from yourself. You may even come across some old goals that you logged but forgot about and it will make you realize that it’s time to hit the reset button on those goals.

I just re-read some of my thoughts and thinking from early 2012 and they certainly got me jump started for this new year. Maybe the best teacher you will ever have is actually you! But you do need to pay close attention to yourself and to you inner thinking and be sure to capture and record those thoughts and feelings. Then you will be able to revisit in order to learn and discover great insights from you, one of your greatest teachers, at a later time.

Planning the Best Year of Your Life

Have you recovered from Christmas yet? If you are like me, probably not.  It sure is a great and special time of the year.  There’s nothing like family, friends and lots of giving at this time of the year.

But now that it’s over, most of us begin thinking of the next year and what it is likely to bring. And if you are smart you will start planning and setting goals so that the next year brings you what you want it to bring, rather than what just might happen to you.

For me, I usually begin my planning by reviewing the past year.  I go through my planner week by week, reading my notes, my do lists, and my activities.  Then I review my goals and see which ones I’ve accomplished and which ones I didn’t.  Yes, that can be a bit of a downer but it also gives me a gentle kick in the butt and a renewed determination to work harder in the coming year.

I think it is best to remove yourself from any and all distractions so you can really stay focused on the task of planning your life for the next 12 months.  Personally I love to sequester myself on a long flight where I can’t be interrupted by phone calls, texting and emails. On a plane, I also don’t get diverted by picking up a book or file or any other stuff like that since I am not home or in my office where I can see and easily pick up something that takes me away from my planning.

So bottom line, I want to strongly encourage you to do a review of what you did and didn’t do as this year ends, and begin writing down what your goals and objectives are going to be for 2015. You might as well make it the best year of your life. And to a large degree that is up to you.

Like I’ve said many times before, “I am preaching to myself as I preach this message to you.” So let’s get to it!

A Time to Give, a Time to Live

What a great time of the year!  You can feel something different is in the air.  Of course, that great old Christmas music helps encourage that feeling of giving, loving and gratitude.  Whereas it’s true that the human brain craves novelty and unique experiences, our minds are also soothed and comforted by the familiar sights and sounds that the holiday season brings us.

I’m pretty sure you are like me, and most other people on this planet, in that you get that warm comforting feeling when you give a gift, whether it’s something fancy or a simple thing or you are giving of your time by doing something special for someone else.  Because, yes, to give is to live more fully.

You may have seen on the news recently, where some anonymous person gives away, at Christmas time, $100,000 dollars in $100 dollar bills to people who look like they are down on their luck and really are in need.  This year, he did it in cooperation with the police force.  And he has the officers give his gifts out.

As I watched how it all played out on a TV spot this year, I was quite emotional.  What the cops do is drive around looking for older, banged up and aging cars with people driving that look like that they don’t have a dime to their name.  Then they pull the people over as if they are going to ticket them.  Of course the drivers, as they see the cop walking up alongside the car, are wondering what they did wrong and as they roll down the window, filmed by body cams the cops were wearing, you can see the great distress on their faces. The drivers were obviously distressed. Some were defensive, others belligerent and others were simply and quietly upset.  But then when the officer reaches in and hands them a $100 dollar bill and says “Merry Christmas”, the drivers face is instantly transformed. Some looked shocked and some even started crying.  One woman said, through her tears, that now she could give her kids a Christmas present when she thought she would not be able to give them anything.

The cops were as touched as the people were by that act of giving, even though it wasn’t their money.  As I watched, I couldn’t help but catch the feeling and the emotions those camera caught and, yes, I teared up a bit myself.

I am pretty darn sure that the more we give, give, give, the more we live, live, live!  I sincerely hope you have a tremendous season of giving and you receive the great rewards that giving gives!  Merry Christmas!

 

Leverage to Lift Your Profits

Today I’m going to continue talking about making those huge returns that I touched on last week. Remember, with only a $30k salary and saving just 10% for only 5 years, you can bring in as much as $21 million dollars by age 70! How is it done?  It’s done by using two different types of leverage.

No. 1: Financial leverage. This is Other People’s Money (OPM) as in mortgage loans, personal loans, signature loans, loans from family or friends, or even through having family and friends as partners.

No. 2: Labor Leverage. This is Other People’s Efforts (OPE). You bring on other people, including employees, part time contract labor, day laborers, contractors and the like, to do the fix up work that will create added value in an asset.

Basically what these two types of leverage can do for you is help lift something that is bigger than you can take on yourself. To paraphrase what Archimedes said, give me a long enough lever and a place to stand and I could by myself lift the earth.

Using these two levers is exactly how it is very possible to receive a return of 15% or 20% or even more, turning a meager income of $30,000 into $21 million! The math is pretty simple. As I said in my July 25th blog, if you go out and buy a $500,000 dirt bag type property, one that needs some fixing up, and do this with a $100,000 down payment (a down payment that itself may be borrowed) and then go out and use some OPE and improve the value by $50,000, that gives you a 50% return on your money,

But of course it will have cost you something to fix it up. Let’s say it cost $30,000 in material and labor to fix it up. That puts you at a 20% return. Now keep doing that on additional properties and you’re looking at a cool 21 million by the time you hit 70 years old. Let me emphasis that you can only do this if you control your own money and do the work or have others do the heavy physical work.

Anytime someone comes along and offers you a 20% or 30% return on your money without you doing a thing, grab your wallet and check book and run away as fast as you can.  These very high returns are possible but, for the most part, only with your efforts or the efforts of other people that you control.

Think of it this way … if you are making 30% or more on most every deal you do, why would you go tell others about it? Wouldn’t you just borrow more money at 5% or 6% and take home the difference? You certainly wouldn’t give someone else a big fat return of 20% or 30% in passive income for not doing a thing to help.

I’m not saying these returns are easy and take no effort and there are other details such as income tax that will eat into that profit (although there is a way–see the IRS 1031 section of the tax code to help delay some taxes) so these numbers aren’t exact. But what I am saying is that it doesn’t take as much savings capital as most people think.  In fact it takes relatively little savings to reach some very big financial levels.

By the way, I’ve had more than a few deals that have topped the 100% return level. Compound that for a few years and your eyes will pop out! That’s the potential. Now, doesn’t that get you motivated?

 

Lessons from Arthur Ashe

Many years ago when I first started to play tennis I was so gung-ho about the sport that I traveled to all four of the major grand slams–Wimbledon, the French Open, the Australian Open and the U.S. Open in New York City.  I was so very impressed with the great champion Arthur Ashe and so admired him, not only as the number one tennis player in the world for a time but just as much for how dedicated he was to improving the lives of everyone, especially the unfortunate of the world.  To me he was an incredible double champion!

I will never forget, as long as I live, that night when the last match at the U.S. Open in New York finished so very late.  As I walked out of the stadium (the very stadium that has now been named “The Arthur Ashe Stadium) to catch a cab, I was surprised to see there were only a few cabs left and tons of people heading toward them.  So being quite young I sprinted to try to catch one.  I barely made it to the last taxi, but as I opened the back door and jumped in, someone else was doing the same thing on the other side.   As both doors slammed shut I look over to see none other than Arthur Ashe as my seat mate! Man, oh man, was I ever surprised, startled and yes, quite frankly, “star struck”. We quickly agreed to share the ride since we were both heading for mid-town Manhattan.  On the ride there I picked his brain to get all the tennis and life coaching I could possible pull out of him in that 45 minute ride.

What a great experience that had been and what a great man he was.  He was so much more than a world champion tennis player.  From a young age growing up in a segregated society, he set about to help change the world by helping people and thus making the world a better place for all of us.

Earlier yesterday, I was struggling to come up with a topic for this week’s blog and as I was thinking about possible subjects I flipped on the TV. Yes of course, the tennis channel was on and there was a biography being shown on Arthur Ashe including his many victories in his tennis life as well as off the court and his sad and somewhat sudden death at the young age of 49.   So it was an easy decision for my blog subject.  What great lessons I began to learn from his life as I watch the commentary.  He did a lot more in those short 49 years than I ever realized.  So much more than I can put in this one blog, so I am going to tell you more about his life and the impact that it had on the world in the next blog.

For now, the take away I want to leave you with is this–if you are looking for a big life time goal that will energize your life, I suggest you first take a look at yourself and see what your talents are and what you like to do and then spend time figuring out how you can direct those talents to make a difference in the world.

When we are young most of us are pretty self-centered and most everything we do is directed at just helping ourselves, but as we grow older and a little wiser we see that helping others is not only very satisfying but it can make the world a better place for everyone for many, many years to come.

 

The Tragedy is in Not Moving On

Tragedy is a word that none of us are fond of.  But you know what, virtually everyone on this planet has tragedy in their lives and if they haven’t had it yet, it’s almost certainly on the way. I don’t care how rich or how poor a person is, tragedy strikes everyone if they live long enough. We all were certainly shocked a few weeks ago when we saw that the loveable, talented and very successful Robin Williams had died by his own hand. This tragedy, as distant as he may be from most of us, touched so many of us nonetheless.

A couple of weeks ago, while talking to a large audience of really great people, I shared the sad, sad story of the biggest tragedy in my life–the death of my sweet, wonderful, 16 year old daughter, Kristin.  Even though that was many years ago, I’ve learned the hard way that you never get over it–that’s the bad news.  The good news is you can learn how to deal with it in a positive way.

After telling the audience about Kristin and how she died, I asked folks to raise their hands if they had has lost a child.  About 3 or 4% of the group slowly raised their hands.  I wasn’t trying to sadden the mood of the group but I was making a very important point.  That point was that if we as human beings are going to prosper and make the world a better place we must learn how to deal with tragedy since we all have or will have tragedy in our lives.

Too often I have heard people complaining and in essence saying, “Poor me. If you had gone through what I’ve been through you would not be able to do any good and great things for yourself or your family let alone strangers and other people out there.” These people are basically saying that because of their unique tragedy, their lives are over and they’ve given up because they have no choice.  If these people would step back a bit and take a look at the big picture and look beyond the facades that nearly everyone puts on, at least to a degree, they’d see that all of us are in the same boat.   And all of us really do have a choice.  We can learn how to deal with the tragedy and move on with our lives. Many times because of that tragedy we’ve had to work through, we can become better people and can be of greater help to those around us. Face the truth–tragedy strikes everyone and none of us will get out of here alive!

Think about that. And please share this message with others that you see that are in need and have not been able to move on quite yet.

Compounding Kindness

Last week I talked about my speech in Las Vegas and emphasized how absolutely critical it is to use leverage if you want to make big money in a relatively short period of time.  But can leverage be used if you want to spread good words and good works so you can make a huge impact for good in the world?  All of us can spread good stuff around and many people do but where do they usually start?  They start right at home with family and friends. But if you want to spread good works and good words greatly beyond that you probably need to use leverage.

Let me try to motivate you with numbers showing how a great idea, a great deed and/or great motivating words can spread and become huge. Let’s call it “good message compounding”.  If any one of us passed on a great message or did a great deed and encouraged the recipients of our kindnesses to “pay it forward” to 10 people asking that they also request their recipients to keep it going by passing it along to ten more and everyone kept that going, what potentially could be the results?  Shockingly, if everyone in the chain were to do this and that passing it on continued 6 times or through 6 levels of people, your message or deed would have affected more than one million people!  If it went to the 9th level, you would have influenced or helped more than one billion people!

Of course, not all those first 10 people would follow through and pass it on and even if the first ten people did we can be pretty certain that not everyone down the line would pass it on.  But the point I want to make is it is possible to end up with huge numbers of people getting your message or being impacted by your good deed. If you keep that “huge potential” in mind it can really be such a super motivator for you and for all of us to push ourselves to do and say more to help others.

So I would encourage you to keep firmly in your mind that 9th level of over a billion people that you could potentially help.  Even though this “good message compounding” most likely won’t multiply into a billion it could certainly multiply into hundreds of good messages and deeds and probably even more than that. And that ain’t too bad coming from one little human on this planet of more than 7 billion people.  In my book that’s pretty exciting, knowing you, as just one person, can have that big of an impact for good in the world. And it all comes back to you in the great feeling it gives you and the happiness you see it bringing to others’ lives.

 

A List for Great Health

For the last few weeks I’ve been talking all about Money, Money, Money … so now I want to shift gears and talk about the extremely important subject of Health, Health, Health!  As most people know having tons of money without good health can be a real bummer. I can’t help but think of Steve Jobs with all his billions, who left this earth at a very early age because of a huge health issue that his money couldn’t solve.

I have preached for years that it’s better to read and re-read the very best book many times over to remind ourselves of whatever great lessons or super inspiration we got out of reading that great book the first time, since we tend to forget much of what we’ve learned. So with that in mind I was reviewing my notes of some of the best stuff I learned from reading Dr. Robert Lustig M.D. great words on health. So today I am going to give you a list that you can review at a glance to remind yourself of what you can do, and should be doing, to greatly increase your odds of achieving and keeping yourself in Great Health!

From Dr. Lustig’s great book entitled Fat Chance.

1. Sugar is killing us.

2. Your waist size is most important.

3. High fiber appears to limit total food intake.

4. Orange juice is worse than a sugar soda.

5. Alcohol increases fat around the liver and other organs.

6. Exercise works at so many levels, except your weight.

7. Studies show that those who skip breakfast eat more calories during the day.

8. Muscle burns more energy, even when you are at rest.

9. Consistency in exercise is the key.

10. Even 15 minutes a day is great for health.

11. Fiber one cereal has 14.9 grams of fiber.

12. Eat real food.

13. Don’t eat anything 4 hours before bed.

14. Wait 20 minutes before second helpings

15. Kids who get exercise during school do better academically.

16. Vegetables give you fiber and micro nutrients.

17. Resveratrol keeps inflammation down.

18. Diet is about weight loss and exercise is about inches and health.

19. People who eat veggie omelets at breakfast are less hungry at lunch time.

20. Eating protein does not stimulate insulin or hunger.

21. Alcohol is much worse than fructose and glucose because the lipid build up can lead to liver inflammation.

22. Alcohol for the same number of calories is more likely than glucose to cause chronic disease.

 

And here is another list that I wrote to myself so many years ago. I forgot where I got it–but it’s good and works.

Mood boosting super foods.

1. Tomatoes

2. Whole grains

3. Fatty fish

4. Dark chocolate

5. Spinach

6. Red meat -lean

Stick to the recommendations on these two lists and that commitment alone will show you great improvements your health!

 

Big Money in Cosmetic Fixes

As discussed last week, you can turn a 10% gain into a 100% gain using your sweat equity on the right real estate asset. Grabbing up run=down properties worked miracles for me, eventually adding millions of dollars to my net worth. You can do the same thing. But, you ask, exactly how do I direct my efforts? What do I fix up to make the property worth more? The simple short answer is paint, carpet, cleaning and basic accessories such as attractive plants and pictures on the walls and a nice green lawn and shrubbery in the yard. This is because you would be buying property that doesn’t needs more than a face lift but which you can buy cheap simply because it looks bad.

Now if you are like me and not particularly good as a handyman then you’ll probably want to use what I call OPE–other people’s efforts. I hired high school kids for just a few bucks an hour. I found from experience that paying people hourly, if you can keep an eye on them, is far less expensive than getting bids on the work needed. I should also say that most fortunes are made through the use of OPM (other people’s money) as we mentioned in earlier posts. So OPM combined with OPE is your formula for great wealth with this approach.

I should also add that I am not very good with any kind of design or decoration decisions, inside or outside. So what did I do about that? Basically two things–I picked other people’s brains as well as copying success, both without cheating. Picking people’s brains is pretty easy since people like to talk about themselves and what they do for a living. I would simply take designers, architects and other professionals to lunch and pick their brains for the cost of a meal.

Copying success is not that hard either, it’s mainly a matter of paying attention to what works then doing the same thing. I will never forget the beat up little house that I bought that was in desperate need of a major design update on the front of this very sad structure. I was trying hard to figure out exactly what to do with the face of this house when the obvious solution suddenly hit me. The basic house structure and layout was almost identical to the house next door–even though you really had to look hard to notice that with my house being such a disaster. The house next door was absolutely beautiful and a delight to look at. It looked like “the little cottage in the woods” that we read about and picture when we were kids.

So what I did was essentially take the lazy man’s option and I had my people do an exact copy of that nice house in every detail– the exact same color of paint, the exact same window coverings and shutters and all the cutesy stuff around the yard and on the lawn. Bottom line, the house looked fantastic and I sold it in short order. There is one postscript to the story–the neighbor was irrate! So much so that he repainted and redesigned the front of his house as he didn’t want to live next door to an identical twin! I didn’t really blame him but it was a bit of compliment to him too. Not sure he saw that.

One big thing to keep in mind as you are using your own sweat equity or using OPE to do this fix up work, keep yourself totally motivated and firmly place in your head that this “grunt work” can and will turn a potential 10% gain into 100% gain. With those kinds of numbers and with enough time, it will turn thousands of dollars into millions!

Shotgun Investing

Last week I talked about how you can receive a huge rate of return on your invested dollar—100% return– by increasing the value of the ‘right kind of asset ‘by only 10%! But the real trick is that you must know how to increase its value by 10 or more percent to start with.

In my opinion and from my experience the best type of asset that lends itself to  ‘forced improved value ‘ is good ol ‘ real estate and specifically properties that need a  ‘face lift ‘. These are beat up houses, duplexes, apartment buildings etc., or what I have often refer to as ‘dirt bag properties ‘.  The key is doing a ‘face lift ‘not ‘bone surgery ‘ so you would need to find properties that are run down mainly on a cosmetic level.  You really don‘t want a property that needs to be fully rewired, plumbing pulled or the foundation replaced.  I look for properties that haven‘t been painted for 25 years or the front lawn is dead and the fence is falling apart. Maybe it just needs new carpet and window coverings to turn it around. Those kinds of properties can make you a fortune and do so in a few short years.

I do want to add that when I was introduced to leverage I was a stock broker and I began trying to use leverage with stocks and bonds but I found out very quickly that the real problem was I really couldn’t ‘fix up’ a stock and I didn’t have any control over the company whose stock I was buying or the stock market itself.  I did however, have some control over a little beat up house that I would buy, even though that is where the real work began.

Once you have found the dirt bag property, the next big chunk of work is actually doing the fix up to greatly improve its value and give you those big fat returns on your invested dollar.  So how do you find those fixer uppers and exactly what kind of work does it take?

There are several ways this can be done.  You could drive through the right neighborhoods that are a bit run down and in your price range, but that is the hard way to do it and it takes a ton of time.  Since time is one of those things that none of us seems to have enough of I recommend what I call the ‘shotgun’ method.  The concept of a shotgun is that when a hunter shoots at a bird the shotgun blasts hundreds of BBs that spread out as they speed toward the target. Most of those BBs miss the mark but it only takes one or two BBs to bring down the target.  Likewise, my  ‘shotgun method ‘ of finding the right properties is very efficient and a real time saver and it only takes one or two hits to score your target.

All you do is use the internet to observe all the for sale properties that even roughly fit your  ‘specs ‘ and then make low ball offers –around 20% to 25% lower than the asking price.  And you do this without even driving by the property.  The real key here is to be sure you have a “subject to” clause in your offer, which basically says that this offer is good only upon certain conditions.  Those conditions can be subject to acceptable financing or even something simple like “subject to my spouse or partners approval”.  So now when you shoot your shotgun at many dozens of properties each week or each month, you only get in your car and drive by and or do an inspection after you get a  ‘counter offer ‘  or sometimes, an actual acceptance on you super low ball price! It does happen once in a while!

Using the shotgun method works if you make enough offers and then after you have scored a property, then the physical work begins. It‘s not easy but it‘s simple.  More on how to fix up those properties next week!

 

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