Archive for the ‘Business Lessons’ Category

Last week we were chatting with someone who was pretty frustrated with their accomplishments.

More specifically, their recent lack of any.

They had read “The Secret” when it first came out and had believed they were practicing the art of affirmations and positive thinking aggressively but weren’t seeing any change in their circumstances.

They had studied the classic, “Think & Grow Rich”, by Napoleon Hill.

They had read, The Power of Positive Thinking.

They had scoured the bookstores for hours trying to find something that would answer the question, the one question, that was haunting them, “Why weren’t they were they wanted to be financially, mentally and even spiritually?”

We’ve been fascinated by personal growth for years and are students of it.

And a few years ago we realized something.

Personal growth wasn’t enough.  We need systems that produced consistent results in the real world.

We could “think positive” as long as we wanted but we didn’t actually achieve very much.

Ultimately you need to play ball and enter the marketplace.

You need to pick a niche to serve.

Then come up with something to offer that niche.

And then, figure out how to get your message in front of them.

That’s where real estate came in for us.

When you buy a property you’re forced into action.  You have advertising to get going.  You have leases to sign and money to collect.  And the interesting part of this?

You can be the grumpiest person in the world and the results will still come.  The mortgage will be paid down, equity will build, cash will flow.

You didn’t even need to think positively.

It was almost a disappointing realization for us.

But it was an important observation.

We were in shock when we met so many grumpy, frustrated, even angry, landlords but they were all making money.

And many of the happy, “positive thinking”, people we knew were broke.

Didn’t seem fair.

At that point we became convinced that hard work and systems were more important than “The Secret” and positive affirmations.

Business was done in the real world after all, not some fantasy land.  

After spending a few years fixing up properties, managing them, and profiting we began to notice something.  

The landlords and property owners who survived the longest and profited the most had two things:

Financial Capital and Emotional Capital.

The most successful investors had more than just money.

They were able to deal with almost any foundation problem, roof leak, eviction or contractor much better than the others.

They were very resilient.  Nothing got them off track.

When we started our real estate brokerage we found that it was important to have systems for our business but also important to build up our emotional capital.

To make deposits to our emotional bank accounts regularly.  That’s why we travel, attend mastermind meetings and take the time to read good books.

Each of those are big deposits into our emotional bank accounts.

It’s this combination of financial and emotional capital that really makes you powerful.

A few years ago we learned about the Stockdale Paradox, in Jim Collins’ book, Good to Great.

In the book Jim talks about a Vietnam prisoner of war James Stockdale.  He was held for seven years and was beaten repeatedly but refused to succumb to the demands of his captors.

He was eventually removed from the other prisoners and placed into solitary confinement for his refusal to cooperate.

When he was released he could barely walk or even stand.  He went on to receive a Medal of Honour and eventually ran for Vice President next to presidential candidate Ross Perot.

Jim Collins recorded a conversation he had with Stockdale.

He said, “I never lost faith in the end of the story.  I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

And when Collins asked who didn’t make it out alive, Stockdale replied, “Oh that’s easy, the optimists.  Oh they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go.  Then they’d say, ‘We’re going to be out by Easter.’  And Easter would come, and Easter would go.  And then Thanksgiving, and then it would be Christmas again.  And they died of a broken heart.”

Stockdale then added, “This is a very important lesson.  You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

The Stockdale Paradox: Faith you will prevail plus the discipline to confront the brutal facts.

How insightful.

Positive thinking is not enough.

Problems happen.  In business and especially in real estate.

But that’s OK.

It’s the way you deal with them that makes things more bearable.

A blindly optimistic real estate investor thinks that eventually they’ll collect their rent.

A disciplined investor says, “I don’t have the rent, I’m going to deal with this right now.”

We now believe that you need three things to carry you forward in real estate and in business:

1. An underlying positive belief system with regular emotional deposits to it.
2. You need to be accurately assessing the facts of a situation.
3. And you must take action and work hard – and you do it, not out of frustration, but because you want to, it’s part of your mission.

Although real estate on its own offers a very effective system for acquiring wealth in your life.

You can accelerate your growth and success with accurate thinking … the Stockdale Paradox.

Positive thinking alone is not enough.

We searched high and low for a quote that would summarize all of this, here’s the closest we’ve found so far:

- Mahatma Ghandi

Many moons ago I went on a trip to Cuba with my wife to “find my life’s purpose”.

I was in a bad place.

Waking up every morning wondering if my life was really reduced to the 9-5 grind.

I had gone to school, earned a University Degree and I had incorrectly believed that everything else was going to be pretty easy.

How wrong I was.

I got a job in the IT industry programming mainframe computers.

Now let me explain something.

After learning about the latest programming methods and the hottest Internet based web development programs in a post-degree grad program … programming mainframes every day was like hammering rock with a sledge hammer.

I felt like Fred Flinestone.

I began having nightmares about my life and my future.  Waking up sweating in panic.  Seriously.

I couldn’t figure out if I was meant to program old mainframes in the basement of a building on Front Street in Toronto for the next 40 years.

Shortly afterwards I got a job do tech support at a software company and I was happy because I was learning and it paid better … but that happiness ended quickly.

Answering call after call I began to feel like the high paid software consultants I was helping knew nothing and that I was doing their job for them.

It was a great environment and I learned a lot but I just couldn’t see myself on a phone queue answering calls for the rest of my life … or even for the rest of that year!

The money was good, but I didn’t care.  My sanity was more important.

So I go on this trip to Cuba with my wife and have a great time.

On the trip I bought this little leather journal at the local market that had the word “Cuba” carved on it and I as I was relaxing pool side I began brainstorming ideas for my own business.

I kept asking myself, “What do people want?  What can I create that will serve an unmet need?”

And I came up with a glorious idea.

In the middle of bocce ball matches on the beach with my wife we brainstormed further and it confirmed how great the idea was.

I would create a website where woman (and men, but mostly woman I assumed) would be able to get information on all the latest sales going on in and around the city.

After all, every proud woman in the world loves a good sale.

Jackpot!

I had found it.

This was back in 1999 or so, maybe 2000.

When I got home I quickly registered www.SalesInTheCity.com.

Cool name I figured.

I got some graphic guys to put together a small web site that collected email addresses and each week I would email out the “sales going on in the city”.

Well, the thing kinda went viral and within about a month I had over 1,000 people registered.

At that time collecting 1,000 subscribers, even for a free service, in a month was a pretty big deal for yours truly.

My business plan was to offer the information for free but when I had enough subscribers I would charge retailers a fee for advertising their sales.

Brilliant!

I was totally giving myself two pats on the back at this point.

But then disaster struck.

I realized that I didn’t like researching all the sales going on in the city.

It seemed that almost every store had some sort of sale every week.

How do you figure out if it’s a “real” sale or just an ongoing sale that some stores seem to run continuously?

Confused I turned to my wife….and although she enjoyed shopping at the sales I found she wasn’t interested in researching all the sales every week.

I couldn’t blame her.  It wasn’t here idea, it was mine.

And the research part of this process got old really fast.

People began emailing me about planning their whole weekend around the sales I sent out.  And if a retailer didn’t quite offer what they advertised I would get some nasty comments for it.

I quickly learned that I actually hated this business.

I hate shopping.  I hate crowds.  I hate stores.

I can barely handle going to the grocery store to pick up a single item on a week night when the place is deserted.

For years I’ve avoided shopping malls.  My wife has heard me say many times that,

“I only have a certain amount of ‘shopping mall’ energy and if you tell me we’re going to two stores and then surprise me when we’re there with an unplanned visit to a third store I can’t handle it because I’ve already used up my ‘mall energy’ on the first two.  I need to know well in advance how many stores we’re visiting so I can pace myself.”

100% ridiculous I know.  But it’s true and she still loves me!

So basically I began to hate this little business I had started.

I hated the responsibility of having to send out this weekly email or face the wrath of email threats asking for it.

And I hated the stress of managing the daily tasks required to make it work.

Today, looking back ten years later on this it’s pretty embarrassing to admit that I found it stressful.  After all, it really wasn’t that much of a responsibility at all.

But at the time, for the person that I was then, it was too much to handle.

Since that time I’ve moved into commission based sales, I began investing in real estate, I went to a start-up software company with insane monthly targets and together with Nick we’ve started three different companies.

We’ve handled more stress in the last three years than I ever imagined I would.

We take 100% ownership of everything we do.

We feel 100% responsible for all the investors we work with in our brokerage.

We often feel like we spend more time worrying about other people’s actions and properties more than we spend on our own.

And looking back recently over the last ten years I noticed something.

Handling stress and handling the responsibility of working with other investors and caring for them is a competitive advantage.

Let me repeat this…

Handling stress and responsibility is a competitive advantage.

Both personally and professionally.

Here’s why most people don’t get into real estate investing.

The don’t want the stress of dealing with tenants.

They don’t want the responsibility of dealing with mortgages, bankers, lawyers, contractors.

They don’t wan the responsibility of owning real estate.

They don’t want the responsibility of managing real estate.

They don’t want the responsibility of filling vacancies.

They don’t want the stress of dealing with unexpected problems.

But here’s the good news.

Because no one wants stress and responsibility … if you are willing to take it on it’s a huge competitive advantage!

Think back to the SalesInTheCity.com example.

I didn’t want the stress, however embarrassingly small, of putting out that list of sales in the city every week.

I didn’t want the responsibility of accurately reporting the sales.

So I gave up.

I began my search for the next “shinny money making object”.

“Late night TV and Internet Marketing here I come!”

And now I’ve learned the cycle repeats until I’m willing to change myself.

Recently I had PVR’d a documentary about a Russian Billionaire.  The interviewer asked him how he handled the huge amount of stress he had managing all the different companies he owned around the world.

His reply…in his words,

“Handling stress is my competitive advantage.”

BINGO!

So until a person is willing to be disciplined and save up money for a down payment….and deal with the curve balls that owning real estate will throw at you….and to handle the stress that comes with it….until they’re willing to accept the responsibility and stress they won’t achieve doodly-squat.

You can’t own real estate and not deal with problems.  It’s a real business.

The majority of society doesn’t want stress and responsibility.

And if you’ve heard us explain how you want to “go in the opposite direction of the masses”, then that should be your first clue as to why you want it.

Stress gets bad press from everyone.

And that’s another good clue as to why you should want it.

It’s the reason so much “get rich quick” stuff is sold … the sales pitches for this stuff make it seem you can work 4-Hours A Week and play on the beach for the rest of the week.

So here’s the deal.

You have two of the biggest competitive advantages right in front of you.

You don’t need to go chasing the next shiny Internet Marketing, Foreign Exchange Trading, Real Estate Investing “easy money” object.

Pick something you like.

Something that you can stick with.  Something you can leave a legacy about.

Accept the responsibility of having to do work at it.

Accept the responsibility of dealing with the stress of perfecting your craft.

And be happy about it, knowing that the majority of people around you right now are trying to avoid it.  Buying books on how to decrease it.

And the best part?

They’re free!  Your biggest competitive advantages are yours for no cost.

Imagine if I had kept going with that SalesInTheCity.com website?  Do you think that could have been a great little cash flowing business.  I do.

Someone else even owns the domain name now – I let it expire.  I don’t even have that to show for it!

I will never make that mistake again.

It’s amazing just how much responsibility it actually takes to take control of your finances, to make some great investments, to start your own business.

Much, much more than I ever thought.

The last 10 years have proved to me that handling stress and responsibility has big payoffs.

No one wants them and that’s exactly why you should.

Booyah!

Until next time … Your Life!  Your Terms!

If you’ve been following us for some time you’ve probably noticed that we make a point to observe and make a note of the behaviours and thinking of high achievers.

Because “the majority” is almost always wrong about making money we actively engage in the process of searching, seeking and pinpointing the exact thought processes and, more importantly, the exact behaviours of people who have accomplished a fair amount.

Last week’s article about Eva Longoria Parker and her comments about life and time management are case-in-point.

Now, before we go any further, let’s clarify something right up front.

We’re not big fans of “making money for money’s sake”.  

We believe in accomplishing a larger mission than simply “making money”.

However, we believe that the reason many people do not accomplish very much is that they won’t take study how money is made.

So, the two ideas.

Making money and accomplishing a larger mission are not mutually exclusive.

They ideas can exist together and feed each other.

We believe that most people never achieve what they truly desire because they don’t take the time to invest in themselves.

This means, they don’t study and develop their skills.

And we can tell that just by sitting where you are right now, reading this, that you’re likely not like that.

You’re taking the time to search, seek and discover your own truths.

By reading articles, blogs or emails like this you’re investing in yourself.

The reason that most people don’t seem to get their business ideas, their real estate investing, their “ideas”, started is that they don’t put in the effort required to refine their behaviours.

Most people stumble out of the gates, into the marketplace, without proper preparation and without proper planning.

And they set themselves up for constant struggle.

Their investing strategies and business plans are “average” at best.

We are not perfect ourselves (not even close!) but we make a point to study, practice and try new things.

We careful observe those who are doing what we want to accomplish.  We model some of their actions and adapt them for our purposes.

Here’s an example…

We spend tens of thousands of dollars flying all around North America to meet with and “mastermind” with other people that we can learn from.

We want to put ourselves in the middle of groups of people who are doing more than we are.

And you know what, surrounding yourself with people who are achieving their goals motivates you more than anything else we’ve experienced.

Sometimes we find that by getting out of your own city and even getting out of Canada for a few days can really open up your thinking.

The “limiting beliefs” we had magically begin to fade.

It’s as if by leaving our community you get a renewed sense of what’s possible.

Sometimes you get stuck in the “tick-tock, day-to-day” mind numbing routine of your community and it’s difficult to break out of that mundane thinking.

To become special at your chosen field of work, whether its investing in real estate, or anything else, we believe you must turn against the tide.

You must do opposite of the masses.

And you must value the process as much as the results.

Like the old European apprentice who works for seven years to become a master at his craft.

His/her skill was held in very high regard and they were honoured for it.

They were recognized as being something special.

We’ve lost that thinking.  MTV nation has created a culture of instant gratification.

And that’s what the majority of people are looking for … instant cash flow, instant riches.

So how do you use this to your advantage?

Well, first, if you function at a very high level, producing great work … the marketplace will eventually reward you with your own special niche.

A niche where you dominate because no one else is putting in the same effort as you are.

You see, there’s one easy way to separate yourself from the masses.

How?

Glad you asked.

Think long term.

That’s it.  Think long term.

Nice and simple but here’s the catch … no one does it.  So if you do, you’re automatically different.

For example, if you’re a designer and you put in the work to master your craft.  And you produce some of the most well tailored garments in the community, word spreads.

Kinda like the “cake lady” in Woodbridge, Ontario.  She was making such amazing cakes out of her kitchen for her son’s birthdays that people began buying them.  

She now has her own successful cake store.

Did it come overnight?  No way.  She slaved for years in the kitchen.

She mastered her craft and the marketplace rewarded her with her own niche.  One which she dominates.

Let’s give you a couple of other examples…

The masses skip “credibility” for “believability”.

That’s why the advice of someone like Jim Rogers, a Billionaire Investor, with a track record or success over decades is ignored and people like Jim Cramer, host of “Mad Money”, are revered.

Jim Rogers has a track record of HUGE investing successes.

But CNBC commentators rip him apart on TV when he says to buy commodities for the “long term”.

That’s boring.

They want to know what they can trade TODAY, right now, this minute, to make money.

When Jim Rogers admits that it’s crazy to invest with that thinking they turn to Jim Cramer who screams, “Buy banking stocks!!  Why?  Because I said so.  Booyah!!”

Is it fun to watch?

YES.  We personally love it!

But be aware of what’s going on.

The masses want to trade stocks today to make quick cash.

Do the opposite and you’re instantly setting yourself apart.  

Here’s another example…

We know of a very successful business person and serial entrepreneur who was asked to write monthly columns for Entrepreneur magazine.

He explained to us just last week that he was fired.

After just a few months into the arrangement … fired.  Kaput.

His style of writing wasn’t what they were looking for.

So Entrepreneur magazine, which is run by editors who are likely NOT entrepreneurs, fired this person because they felt the advice was too tough.  Too direct.  Required too much thought and work.

The “tone” of the message just wasn’t right.

Hmmmm.

What tone were they looking for?  Get rich quick perhaps – it sells more magazines.

Here’s another example that real estate related…

Many investors have been sucked into this “cash flow is #1″ mentality.

And they’re right.

Cash flow is king.  But some miss the forest for the trees.

You ultimately want to OWN real estate.  

You want to have a portfolio that produces results for you for years and years.

And if you’re investing you likely want financial freedom and personal independence.  That’s why you got started in the first place.

So ultimately, owning a solid portfolio of properties is what you’re after.

But “the masses” get sucked into “cash flow” so deeply that they forget this.

Instead, they acquire any real estate that is producing positive cash flow.

And the more cash flow it spits out, the merrier.

If they have to do very little work to get the cash flow, even better.

Never mind that it’s a property that may have real headaches for them down the road.

They’re not mastering their craft.  They’re chasing deals.

They’re not thinking long term.  And it will hurt them.

So how do take this line of thinking and use it to your advantage?

Well first, always think long term.  Money for money’s sake is not the goal.  Have a bigger goal.

Next, become a master of your craft, whatever it is.  

Study, practice, develop, rinse and repeat.

Long term thinking and planning is ignored by almost everyone.

And that’s exactly why you should want to do it!

Until next time … your life, your terms.

Every once in a while we’re guilty of assuming we can’t learn something from a particular person.

And almost every single time we’re proven wrong.

That happened to us again recently with Eva Longoria Parker, of “Desperate Housewives” TV fame.

She was featured in the the March 2010 edition of Success Magazine and we were genuinely shocked at how much she’s already accomplished.

There are multiple lessons in her story and we thought we’d summarize some of what we learned here with you…

At 34 years old she’s leveraged her celebrity and growing wealth to start her very own charity, but that’s just the beginning.

She’s started her own production company, UnbeliEVAble Entertainment, that devlops, writes and creates both film and TV projects.

She co-owns Beso, a 150-seat Hollywood restaurant that includes some of her own unique recipes, and opened a second location in Las Vegas along with a nightclub called Eve.

She’s part of The Greenville Project, a real development initiative dedicated to building “green”, eco-friendly, retail spaces.

She’s a spokesperson for L’Oreal, Pepsi and Heineken Light.

She’s founder of Eva’s Heroes, a charity that provides after school programs for children with developmental challenges.

Eva is also national spokesperson for PADRES Contra El Cancer, a charity helping Latino children with cancer.

We have to admit, we’ve always looked at her *ONLY* as a TV actress and the wife of Tony Parker, NBA player extraordinaire.

Bad on us.

Her level of success in Hollywood made us believe she was *only* a celebrity, how wrong we were … and how very instructive to all of us.

We love the way she sums up her accomplishments and future goals in the article, with one word, “ambition”.

There are so many gems of insight into her thinking.  And really, that’s the thing we’re always most interested in.  

Check this out…

To quote Eva directly, “Building on success is a conscious approach…”

How insightful.

Everything is a choice.

And here is probably the most interesting and useful quote of all from her…

“Whenever I do something, I want it to be a tent pole for many other businesses.  My production company is all about writing, creating, developing film and TV projects.  With the restaurants, I’ve always known it was going to be a franchise, with the tent pole based in Hollywood, but expanded into both big restaurants and smaller venues, and later with food items in stores, a cookbook and other things.  And I want my perfume to be my tent pole for a clothing line, home line, bedding, shoes or accessories.”

Got goals?

She does.

And to think the achieving a certain level of success in one arena, acting, would be good enough for most people.  Not Eva.

There’s a H-U-G-E point here.

In a recent article we shared how to actually accomplish anything you need to “dream big” and take “concentrated action”.

This is a classic example of that.

At some point to realize your dreams you’ll have to take focused action in the marketplace.

You’ll have to make sales – even if you hate sales.

You’ll have to understand accounting – even if you hate it.

You’ll have to deal with problems – even when you don’t want to.

You’ll have to call people and persuade them (with integrity) to rent form you, invest with you, work with you, sell for you, build for you, run for you etc.

Here’s the other super insightful point from her quote above.

Did you notice how she mentioned “tent poles” and how one business is a “tent pole” for another.

How interesting.

She has the big picture in mind and is building businesses that compliment and feed each other.

The restaurant leads to a franchise and to a nightclub, and to “Eva” food items in stores.

Her fragrance leads to clothing, bedding, shoes and accessories.

Her acting leads to a production company for writing, creating, developing film and TV projects.

Her “green” initiative leads to eco-friendly real estate developments.

It’s interesting how many successful entrepreneurs have built their empires with multiple businesses that all feed off each other.

And this is yet another classic example.

Let us ask you something.

What FOCUSED action can you take to begin building your empire?  

What can you do in your life to begin building your “tent poles”?

Can your real estate investing lead to other real estate businesses?

Professional services, property management, education, real estate development, international investments, land acquisition, vacation property, recreational property?

Trump does this exact thing.  His developments in Manhattan turn into rental units and hotels after completion.  He acquires land and develops them into golf courses and vacation properties.  He uses his name to “brand” other developments, products and services.

It’s one “tent pole” after another.

Here’s what Eva says about time management.

“People have more time than they realize.  There is so much wasted time in people’s lives.  Just plan.  And stick to the plan.  My lifestyle requires a lot of planning – I wake up with 10,000 things to do.  You just go over that hump and you get them done.”

Insightful huh?

Good on her.

And it turns out, after learning more about Eva Longoria Parker, that she’s not that desperate at all.

We regularly run into Canadian real estate investors who have uncovered amazing real estate opportunities but can’t raise the cash to close on the deal.

There wasn’t a problem with the real estate itself.

Or with the potential profit of the deal.

This investor had a marketing problem.

They couldn’t find the money and people to help them take advantage of the opportunity quickly enough.

As we ourselves grow in business we’re ready to conclude that almost every single problem in business, real estate related or otherwise, is a marketing problem.

Almost everything can be solved with effective marketing.

Whether it’s raising joint venture capital, finding great team members, finding good properties or filling vacancies.

Marketing can solve all of these if applied intelligently.

And your marketing doesn’t have to be smart or cute, it simply has to “capture attention”.

We’ve been studying this and applying different “attention grabbers” ourselves for several years now.

And we’re going to let you in a little secret.

One of the most effective ways to capture attention is with “incongruity” … with things that are “out of place”.

In the book The Psychology of Humor and Wit, Psychologist Donald M. Johnson explains that, “Perception of an incongruity arouses energy directed toward resolution”.

Meaning that our attention is drawn to things that we find are incongruent with what we expect.

How does this work?

Well, what would happen if you’re riding your bike down the street and you saw Santa Claus walking on the sidewalk.

Incongruent right?

Your attention is immediately focused on jolly St. Nick.

You can’t help but stare.

A couple of January’s ago we were filling some Student Rental rooms in multiple properties.

Instead of using the standard “open house” signs that you see many Realtors use we got neon orange bristol board and wrote “Student Open House” with the thickest black Sharpie marker you’ve ever seen.

And the hand writing was U-G-L-Y.

This was incongruent in two ways.

First, no other landlords in the area use “Open House” signs when showing student rental properties…

AND

No open house signs typically look as ugly as ours did that day.

So we were incongruent on multiple levels.

The students walking around campus couldn’t help but find our ugly signs advertising something they’re not used to seeing.

The result?

We filled multiple properties with students that day.

Recently we were in Times Square which has more attention grabbing billboards, signs and people per square foot than perhaps anywhere in the world.

Your attention is stretched to the max.

But what did we find ourselves drawn to?

The most incongruent message of them all.

It was a bunch of students holding out bristol boards with the words “Free Hugs” on the them.

In the cold streets of NYC this was definitely incongruent and we couldn’t walk by without our attention being captured…

Because marketing is such an overlooked aspect of Real Estate investing we’re going to be expanding on this principle with Rock Star Inner Circle members in an upcoming Monthly Newsletter.

If you’re not a member of ours yet you can sign up for our Introductory Training class here:  http://www.CanadianRealEstateTraining.com