Life Area Effects

I've been noticing lately the combined effects of areas of my life. Say you break an individual down into the following areas:
Physical Health, Employment (Work / Job / Contribution), Financial, Relationships
Each of these elements contributes to some degree to their overall happiness level. Having a strong foundation and support structure in one area will help make up for deficiencies in others. As things change, it could topple over existing structures.

I wish I had a better grasp of this concept. Right now my work life has gone up and down, sometimes adding positive support, other times dropping the floor out from under me. My living situation is in flux as I prepare for a big move, so that has caused some stress. I've developed some good relationships that are adding to my life and providing some solid support.

It's hard to quantify and qualify all these influences and come up with any kind of model for actually objectifying how they impact my life. In order to do that I would need to spend some time clarifying the parameters and logging enough information to start creating definitions and logging real conclusions.

My current goal is to put together a program around this kind of foundation. I'm going to take my business coaching company and turn it into a life coaching company. I'll work with individuals to lay out specific life improvement goals and then design steps they take towards them as well as ways to measure them and record the results.

This is all in a very soft, formative stage at this point, but my interest has been in this kind of thing for a while. I feel like I have a clearer idea of what I want to accomplish with this approach than I had with the business coaching, so making this switch will be a step in the right direction. It's going to take a lot of time and focus though, so I've got a lot of things to take care of first.

I'll try to continue to update the process.

Plan B

I've spent the last 3 months working on an application to a business school in Austin, Texas. As I've mentioned in the past, my goal is start my own business, and I've attempted this several times now. This school is built around accelerating students through the learning curve so that they have all the tools they need to do just that. Unfortunately, I was rejected.

So the question is, now what?

Before I answer that, what really bothers me about this is something that happened that made me apply to the school. I was reading their website after hearing about it from my brother and I got this feeling. It was more than a gut feeling, it felt like it came right from my bones. Like everything that makes me who I am was pulling me toward this school. It just felt so absolutely right. So to get that feeling, put all the work in to apply to the school and then get rejected is soul crushing.

So now what? Now I figure out what Plan B is and do that. The nice thing about this process is that it has helped me identify the areas in my life that must change and the strong areas that I don't want to change. So I have to start cutting out the bad and building on the good. Even though I won't be doing what I so desperately wanted to, at least I know what needs to be done. I think it's false to pretend like rejection is really something good, I mostly think people are just lying to themselves when they say that. I am going to try and get at least something from it to help soften the impact of the blow.

Qualified

I had written a post a while back about what it takes to be able to charge someone for services. In other words, how much knowledge and experience does it take to justify billing someone. The answer is surprising.

If you are like me, you grew up going to a school till you graduate and then moving up to the next school. You may have stopped at high school, college, post graduate studies, or maybe you are still going. The idea though, is that by completing all the school programs you are gaining a specific knowledge that makes you qualified to be payed. After growing up with this, you are conditioned to the idea, thinking that is the only way things work. The reality is different.

We see alternatives all the time. The guy selling flowers on the side of the road doesn't have a degree or certification in biology or horticulture. He just has flowers. You have a need for flowers, so it is worth it to you to exchange for them. All he had to do was get the flowers and position himself in a place where the price he is set is less than the value of the flowers to the people passing by.

So there you have the answer to qualifications. What qualifies you is your ability to secure a resource, set a price, and get a level of exposure. Nothing else is required.

This can be misleading though, because it brushes over the hardest part. That is, actually doing it.

The main reason the average person has one job as their sole source of income is because it is easy. You gained the qualifications, you got through the interview, now your reward is to just show up everyday and then receive a paycheck for your efforts. You have earned the right to put in your eight hours and then go home and watch TV, with two days out of the week left free for you.

So now the question is no longer are you qualified but rather, are you willing to do the work.

Formula for Success

It turns out that there is a very simple formula for success. It takes some understanding of a few basic theories, but once you accept then as truth and start applying them, it's just a matter of time and effort. I'll give you a brief overview.

First, you have to understand that everything in life is built on a few basic principles. As a society of human beings, we are all 99% the same with 1% difference, usually mainly projected in our physical appearance. We all need food, shelter, love and attention. We all have problems, experience a range of emotions, and have the ultimate goal of being a success at our specific interest. We are all members of different groups where we have roles and value placed on the opinions of the other members based on their roles.

Knowing this, the interplay between us is dictated by economic theory. We are managing different resources that we control, exchanging them with others for ones that they possess that we desire. The value we put on what we have versus what others have is determined by our own happiness as well as the value we place on the opinions and needs of our core group.

With these basic rules established, how do we become a success?

The initial step is to produce value. You can do this on your own on a small scale. If you leverage technology, nature or even other people, you can create consistent value on a larger scale. Once you start consistently producing value, then you just need to find individuals or groups that require what you are producing and are willing to exchange more value in return for it than it took you to produce it.

That is the formula for success in its most basic, elementary form. Specifics are not included, but once you can successfully execute every step in the process from production to delivery, then you cannot fail. It becomes a matter of improving the process to require less to produce more as well as either finding better target groups that have a greater need for the value you produced or increasing the value you are providing so you can get more value in return in the exchange.

It really is that simple.

Long Journey

So, after a long year, I think I'm finally back to about where I was a year ago. What I mean really, is that I'm ready to start my own business again. But I'm going to do it a little differently this time.

Last time, my idea was to do the Rich Dad approach, which basically says that it doesn't matter what business you start, just go do it. The only problem though, is if you start a business and you don't care about it, then you're not going to get very far. So that line of thinking had me deliberating for about a year about what kind of business I actually want to start. What is something that I actually care about and want to do.

I finally figured it out. I'm going to start a business doing business consulting. What this essentially means is that I'm going to find small businesses that are already operational and go in and help them to become more profitable or grow. I'm building my own model for how to do this based off of a mixture of the plethora of sources I've read that suggest different ideas. I'm going to add in my knowledge of the new technology that is available and help these small shops in this dark economic time.

Finally I feel like I have all the tools I need, the initiative and the plan as well as the confidence. There are a lot of other little tricks and details that I'm not going to elaborate on because they are my clever innovations that I don't want people to take and run with. The point though is that finally I have a solid goal again, something I can break into steps and start working towards.

It's been way too long :)

Rent vs Buy

Renting makes more financial sense than homeownership

Very interesting argument with a lot of valid points. Currently, I'm still a renter and probably will be for at least a while since housing prices have inflated to such a ridiculously high amount, but that's more a personal choice of what works best for my current situation. Personally, I still believe with the right consideration of the following points, buying trumps renting.

The first thing to consider is the specific market you are analyzing. In the NY market, I could see why there is a significant difference between monthly rental rates and ownership mortgage payment rates, but in other markets the balance is the reverse, you can actually end up in a situation where the rent is more per month than the mortgage payment. A year or so back, I did some sample evaluation in North Carolina and found a market where the prices were almost equal, something I have never seen in my home market. There is enough public information out there that you can research markets across the country to find ones with better ratios so that the odds of finding a deal in that market is statistically favorable. This of course assumes you have the freedom to choose where you are buying, which works better for an investment property than a primary residence.

The second thing is the price and method of purchase. Just like how rental price can be negotiated, a house purchase price shifts by the laws of supply and demand. You don't have to buy a house through a Realtor, you can purchase a foreclosure, a bank auction, or do a lease option. Regardless of how the national market is, there will always be people desperate to sell and offering great deals if you are willing to look for them. It comes down to a matter of preference, esp if this is your primary living space, but with an investment property it becomes more about finding numbers that work in your favor for making a profit off of the rent.

I will say this, there is no blanket right or wrong answer for whether renting or buying is better. The bottom line is your individual financial situation, expectations and desires. Business and real estate are great investment tools, stocks and bonds being better for the passive investor and real estate better for the active investor, so it comes down to your preference for level of involvement. Sometimes the burdens that come with buying a house add a level of stress or frustration that tips the scale against the value any monetary gains would give.

Bad Customer Service

I'm writing this not to settle a personal gripe but more because I feel this needs to be said. I've had experiences with three businesses lately that have shown very poor Customer Service. In business, I believe that Customer Service is, if not the most important part, one of the most important pieces. One of the reasons I decided to work at GameStop part time was because of their emphasis and understanding of the importance of Customer Service. If you do not treat your customers correctly, providing them with prompt and courteous service and solution to their need, then they will not remain your customer for long. In this day and age, word of mouth advertising is one of the few genuine, trustworthy sources of recommendation left. Bad recommendations are an even purer source with much larger reach and less hesitancy to spread.

That being said, here are my three recent example of bad Customer Service.

First is Chipotle. This is not a universal criticism, but rather specific to one location and one employee, but as an employee of the company you are a representative of the brand. Recently I went in to a local store, waited my turn in line and ordered my common order, which is hard tacos to go. The lady placed the aluminum foil down and pushed it along. The next lady in line filled the customer before me's order, paused, removed the aluminum foil for my order from the line and proceeded to fill the next customer in line's order. No explanation was given. I politely asked about my order, but no response was given. The next person in line's order was filled and the line started to move along past me. I inquired again, but still no response. At this point I looked around at the other customers, then left the store. I'm still not sure why exactly my order was left out and why the ladies behind the counter were ignoring me, but I have not returned since and do not plan to any time in the near future.

Second is Three Brothers. Being lactose intolerant, it is always a nuisance to have to tell everyone at restaurants to hold the cheese or not put cheese on, but I always make a special emphasis of the point. I ordered a normal order of a chicken cheese steak, without the cheese (making special emphasis because this store has gotten it wrong probably 3/5 of the time I've ordered there). Not surprisingly, they got it wrong again. Normally, I'm very forgiving of this and would not make a big deal out of it. This time was different. The manager there, after finding out that they got my order wrong and were going to have to remake it, came up to me and said, "Next time, make sure that they type it into the order." There were several things that bothered me about this. The first was the tone, which doesn't come through in print. The second was that, even though I made special note of this when ordering, apparently it is my responsibility as the customer to make sure her staff does their job correctly. Something rang false about that to me. I'm paying them for a service, and apparently I am now responsible for supervision on that service. That sounded more like her job to me than mine.

The third and final example is Sprint. I'm not sure exactly where it all started. It may be the poor level of service, it may be that they have hung up on me so many times, but Sprint is probably my least favorite company. In my most recent conversation with Sprint, they called me during the work day (for the fourth time or so) to tell me that I have an old crappy phone that I should upgrade. They of course want to provide me the upgrade for free (minus the new commitment to a 1 or 2 year contract). After the lady was laying into my phone for a while, I stopped her and said that I wanted to speak with her manager about my account. She put me on hold for about 10 minutes, then hung up on me.

So there you have it. Each of these small, almost petty seeming encounters have left a bad taste in my mouth as a consumer. We have the choice to vote with our dollars and my patronage at these companies has been lost.

Another Business Owner

So after what seemed like a drought of ability to find business owners, I've met yet another one. This guy is a friend of a coworker of mines and he owns and runs his own landscaping business. Again, while this isn't necessarily a business that I want to get into, it was nice to talk about the different things he does and how his business has evolved over time.

Apparently he employs some guys from Mexico who come over on 10 month VISAs and then they are away during the winter months when business is slow. This has allowed him to pick and choose the different stuff he wants to do when it comes to the actual work on someone's yard and frees him up to do more common business accounting and marketing tasks.

It's been very motivating to talk to a couple of people who own and run their own business. While my previous attempts have been unsuccessful (mainly because I keep giving up), it restores some optimism about building a business and a steady flow of income when you see how other people have been successful. The thing I seem to be lacking that these others have is the motivation that pushes you to keep going when things get tough. If these guys fail (at least two out of three), they don't eat or can't pay their bills. So they have to keep going, they can't pick and choose or switch to something else.

On a side note, today is the first day I really take a step in implementing the Little Book that Beats the Market's approach to value investing. I sold off two of my stocks a couple of days ago before the year mark since they had lost money. Today I sold off my winners that are now long term gains, and I purchased four stocks to replace them. I also took a gamble at some GE stock since they are favored well in the upcoming energy crisis and need to switch over to alternative power sources.

After a couple of weeks you get a good idea about how the stocks performance will range for the year, so I'm hoping that the picks I made from the screened list will be good ones. I tried to base it off of my knowledge of the state of different industries as well as how much upside potential a company has. So we'll see how it goes.

Business Owners

In the past couple of days I've run into a few business owners. What's ironic about this, is that just a few days before this I was complaining to someone that it's hard to find these elusive individuals. Apparently, I was wrong.

The first one I met at Toastmasters. The guy runs a heat pump/air conditioning repair company. While not the kind of business I would probably be good at, just talking to him about how he started his business and how it has evolved was inspiring and educating. Apparently, years back, he was out of work and running out of money with a wife and three kids to feed. So he had to do something and he had to do it fast. He told me that he didn't like fixing heat pumps for apartments and preferred individual residential houses, but when he started out he needed an income fast, so he did whatever work he could find. He always gives his clients a 10% discount of the cost of any work he does, and has built up a client el from word of mouth and the basic advertising he does on the truck he drives. While I didn't ask how much money he makes each year, he said that he has enough business now that he only does private homes and not apartment buildings anymore.

I guess the lesson to learn is that you just need to keep plugging away, working on doing a good job and building a reputation. With a good enough reputation, the word of mouth advertising, which is increasingly becoming the only form people trust, will grow your business. Also, you shouldn't be worried about competition, since by doing a good job and making a name for yourself, there will be enough people willing to pay for quality work to keep you happy.

The second one turned out to be a coworker of mine. Apparently he created a small software client, a web service that it sends messages to, and a website where people can sign up for the software and service. It all seems simply now that he has it in place, and there are lots of ways for him to expand his services. The wider benefit from it, other than the added income, is that putting in the time and effort to make the business has taught him new skills and kept him sharp in different areas. I'm not sure how much money it pulls in, but an automated, subscription based service seems like a perpetual money making machine after the upfront cost and effort.

I guess the lesson to learn is to keep practicing to keep your skills up, but find a way to do it that benefits you outside of just your job. With a little bit of foresight and the willingness to put the time and effort into learning new things and making something that could be useful, not only do you gain confidence but you can gain comfort as well.

I'm glad to meet more and more entrepreneurs because it challenges me to keep going. Also, they are very open and encouraging, willing to offer up advice about what they did or what to avoid doing.

Honest

So I'm gonna be honest. I've been really slacking with my business ever since I read that article talking about how all these people are doing it better then me. I probably would still be more enthusiastic about it now, but I haven't had any luck reaching my latest investor. The prospect of paying $20 a week in parking and trying to get up to a farther away county every Friday just to get 5-10 leads isn't very inviting either. At this point I think I just need to regroup and find a better approach.

The best idea for now would probably be to attend some REI meetings, not as a "Jobber" trying to find investors to work with, but just as someone who wants to learn more about the industry. I think just taking some time to do market research and learn about the purchasing process while I look for my own house would be extremely helpful. Not only would it save me money but after going through it, I'll have experience to look back on and compare with, rather than just playing with the ideas I've read in various books.

Also, I might be able to just volunteer to work with an investor on the weekends who is already doing these deals. That way I see what they do and get some advice, since usually having a mentor to learn from is a great shortcut and extremely valuable. I've noticed that at my day job, whenever I work with a more experienced member of the staff I pick up different tips and tricks that save me time in the future. Plus, by working with an investor, I can get a better idea of the information they want and where they would go to get it.

So for now I'll keep working on trying to find a car, building up my stock portfolio and putting money into my house fund. While I do that, I can start attending REI meetings and see how things go from there. Also, I'm planning on going to a Toastmaster's club meeting this Monday, so we'll see how that goes as well.

Courthouse Update

So I pulled myself out of bed early today and headed to the distant county to pick up some leads. I found a closer parking garage, but it turned out to be for a hospital next door, so the price ended up being higher than the $12 normal. I did manage to snag about 10 leads or so for the zip code my investor wanted me to look in. The housing may be below his normal price range, so we'll see how he responds. The other issue is that I couldn't find the court dates, only the dates the information was filed, so I don't know how happy he'll be about that.

I've been really frustrated recently. I feel like I've put a lot of time and effort into learning about business, stocks, real estate and various other fields. But then when I actually try to put my knowledge into practice I get nowhere. I can't tell if I'm just young and ignorant, if I'm not trying hard enough, if I'm working in the wrong direction or whatever else could be the problem.

I'd like to find a mentor of some kind to steer me in the right direction. I don't know anyone who is successful in all of those fields though, so it seems the only compass point I have is the information I read. The problem though, is that most of the stuff seems theoretical or introductory, so it doesn't help me to determine what I'm doing wrong in my specific situation, only more of an overall outlook or philosophy. I guess that's where the lack of experience comes in, I make mistakes because I don't know and haven't done things before, so I have no way of telling if what I'm doing is correct or not.

After reading Made to Stick, I feel like I run into a lot of situations where I want to get information or learn from someone, but the "curse of knowledge" stands in the way. They know what they're talking about but can't articulate it to me in ways that I can understand. So it seems all I can keep doing is plugging along.

The other thing I've been thinking about is at what point do I reach that big goal. It's like people say about making the first million is the hardest and once you've reached that point it's all downhill. I don't know if it's still the first million now or not, but if I just go by salary it's going to be a long way off before I reach that point. I'm hoping that all my efforts to move my money into less taxable but still profit making vehicles will start to pay large dividends in the future.

I guess I just put too many expectations on myself. A lot of people my age have much less than I do and very little goals or direction. I've only been working for almost two years and I basically started with zero. Most people my age probably have student loans and car payments that eat away at their earning potential, so I should be gratefully that I'm already in the position I'm in, instead of impatient at not being farther.

Regardless, I hope everyone has a good weekend as we slide into the final month of 2007.

Black Friday Sales Attempt

I enjoyed this experience, so I figured I'd share it.

On Thanksgiving I came up with what I thought would be a brilliant idea. I had a bunch of energy drinks left over from my time spent in Quixtar, and I figured if there was ever going to be a time to sell them, it would be Black Friday. And the target, captive audience would be the holiday shoppers who are lined up waiting for stores to open. If anyone needs an energy drink, it's people getting up early to spend a day out shopping.

I got together some preparations on Thursday night, a bag of quarters to make change and all the boxes of drinks that I had. I convinced my brother to help me for a cut of the profits. Then I set my alarm for 4:15 and went to sleep.

When the alarm went off, I distinctly remember thinking that I had two choices. I could either just forget about this idea and go back to sleep, or force myself out of the warm bed and into the cold, dark night. After about five minutes of debate, I managed to convince myself that I'd have to wait a full year to get this opportunity again, and that it would be worth getting up. So I got myself up and dressed and then woke up my brother and we ducked out of the house.

On the way to the local Best Buy we saw lots of people forming lines at various other stores, so we figured we'd have a good shot. Cruising for a parking space, we saw that the line went all the way down the block and started around the end of the last building. A good sign for success. I had set the price at three dollars, since the cost was about two without including shipping.

The first few attempts started poorly. My brother led in with an unenthusiastic "Do you want this?" sales pitch. This of course led to solid rejections. We discussed the approach some and he started to adapt. I had thought of the phrase "shopping fuel" as a gimmick approach to getting people interested, but it didn't seem to create any stir. He started reading the label on the cans some, talking about the 0 sugar, 0 fat and only 8 calories. This peeked some curiosity, but still no one wanted to buy.

After facing rejection across the whole side of a building, we were pretty discouraged. So at this point we decided to just give it away instead of trying to charge for it. The sad thing was that, even without charging anything, people didn't want it.

After a few attempts, my brother kept pushing past the first few nos, and a girl in line was willing to give it a try. After a few sips, she admitted that it was pretty good, although sweet tasting. Then she asked if we had poisoned it. We didn't, and never had any intention to, but I thought it was funny that she asked after the point where she would probably have been dead if we had.

Once people started to see someone take it and drink it, they jumped on board. That first group took a box together, and with that our confidence in getting rid of the stuff started to grow. My brother had more success after that, he ignored the first few nos and kept pressing forward with the information he had read off the can. Eventually people were coming from different parts of the line to grab one, and we had almost gotten rid of all of the supply. When we were down to the last one, my brother picked out a guy in line and talked him into taking it, not taking no for an answer.

So while we didn't sell anything, we did learn a lot from the experience. First of all, people will pretty much say no to anything at first, so you have to keep going though their objections. Second, the people at the front of the line would have probably been the most receptive since they had been in out the longest and were probably the most dedicated. Third, you have to give the people something to identify with. If we had said something like, the kick of a red bull with the sweet taste of root beer - and it's good for you, people would have identified with it better and even been curious for more information. Fourth, if you don't have any confidence going in, people are going to react to your body language and reject whatever you're selling.

So in the future we'll now have this experience to draw from. It was worth the initial down payment as well as the struggle to convince myself to get out of bed.

Thanksgiving

I was going to write an angry post about how some of this conventional financial wisdom on different sites is extremely lacking, but I decided against it. I guess it applies to some people, but I think the idea of having to lie to yourself in order to not spend all your money and go into debt is ridiculous.

Anyway, I hope everyone has a good holiday, and for everyone outside the US, I hope you have a good Thursday.

I'm going to spend the time off doing some reflecting about where I am in various areas of my life (my job, my living situation, my business, my current financial approach) and where I want to be. Then I'm going to brainstorm about how to get the different areas where I want them to be. I've been in a holding pattern with some things for about a year or so, but I will have reached a lot of goals starting 12/1, and therefore it'll be a good time to implement changes.

Out Done

So I happened to stumble upon this today in my Reader queue:

Foreclose Market Picking Up

It seems people have caught on quick. While I'm not concerned with her class, I am concerned about her website. It seems to cover all of the US market down to each state's individual counties. When I check against my list from the courthouse, it doesn't seem to match up exactly. Upon further review, her list is extremely accurate, but I'm not sure why it does not seem to be as inclusive. The only thing I can think of is that she is filtering her list better than I am and only putting up ones that are definitely going to court. Regardless, this is trouble.

While there is always some market for the small guy that's local, this website seems to have seen the lack of information in the market place and dived right in to fill the hole. I'm extremely impressed and not really sure where to go from here. I do have an investor lined up at this point, so I can start working specifically on leads he will want starting Friday, but I'm not sure how this will effect future growth.

Along with this development, my stocks are now in the red as of today. In mid August, when there was a market correction, my stocks plummeted to the lows I'm seeing now and they temporarily bounced back afterwards. I'm not confident I'll see that happen again in the near term. While I'm going to stick with the value approach and continue to follow the instructions, it still leaves me a little disheartened.

I'm not sure if any failures get to me and I remember them more than successes, or if it's just that I haven't had many successes. Right now is definitely a low point one way or the other.

Weekend Plans

Another trip to the courthouse today. Rounded up 10 leads for my basic location. That's about average, and from what I've read the foreclosure rate is only going to continue to go up. The greater problem of nothing actually being done with the leads still exists, but hopefully I will make some new contacts on Monday that I can funnel the leads out to.

I've been rereading The E-Myth Revisited, and I hope that once I get a steady amount of investors who are producing sales, then I can really put a system around my business. The training that I read for how to be a Jobber was essentially all the system I need, but I hope to automate the process more and eventually move myself to more of a supervisor role. Eventually I should be able to get jobbers underneath me to go to the courthouse or be doing driving trips to find leads. Also, I plan to setup a website. Then I could have jobbers log in and input the data online, only to have the system then send emails out to the investors based on some rules that I setup. But that's all in the future for now.

Stocks are having a terrible day for the second or third day in a row. It just reemphasizes how important getting my business to a productive level is. With the business I actually have some control over what happens rather than playing the role of the middle man, hoping that the unruly mob that is the market continues to push up in my favor. Stocks are a great and extremely passive source of income, but when you're trying to get to a substantial amount of wealth, they are very slow and unhelpful. Getting a strong business cash flow is really the best fuel for filling up your asset portfolio.

The car hunt is continuing this weekend. I may just settle and buy the car I test drove on Wednesday. It seems the most powerful tools available for negotiating the purchase of a used car are the ability to walk away and the ability to buy the car outright on the spot. I'm hoping to use them to knock $500-1000 off the price tag. I figure if I can get the car for about $5K, then it's really a steal. So we'll see how it works out.

I've begun filling out some business school applications. The essay seems to be the hardest part because it's hard to write to a target audience that you know nothing about. Write now I have some basic framework for the content and a mild attempt to string it together, but nothing that would amount to a full first draft. If I don't finish the applications before the spring semester deadline then I'm not really going to worry about it. Usually bigger classes start in the fall which might play better into my favor.

Don't forget - One Laptop Per Child starts their Buy 1 get 1 program starting 11/12. So enjoy your 11/11 holiday and help some kids on 11/12!

Frustration

I'm making some small steps now. Today I was able to locate an investor's add in the local paper. I gave them a call at lunch but got the answering machine. I left a message with a brief description of my services and my number, so we'll see if I get a call back. Worst case scenario I don't hear anything from them and move on to looking for another investor's add tomorrow.

Also, I found a car that might be worth buying. I'm going to head directly to the lot to test drive it on Wednesday after work. I almost headed over there yesterday, but the lot closes at 8 and that's when I would have had the chance to get there by, so it didn't work out.

I finished some small things I was working on at work, but the results seem to point to bigger changes being made. I'm not sure exactly how those changes will be made and I can't get a hold of anyone who would have ideas. So right now I'm pending.

I read Orbiting the Giant Hairball over the past couple of days. It's basically a "look outside the box" book. It points the reader into these ideas that all corporations are the same rigid systems and only the author has the right path. This of course is a quiet rebellion, where due to his intervention all this "wonderful creative innovation" occurs and shakes up the business system. I have a feeling that if someone else wrote about his experiences from a perspective outside of his, there would be a completely different flavor to the book.

The problem with books like that are that they try to bring up a lot of questions but don't have any answers. It's nice to think outside of the box, but unless you have some kind of plan before going off the deep end, you're going to end up jaded against the idea of starting your own business or trying to do something different. The reason for this is because you're likely to fail. The statistic "9 out of 10 business fail" is correct. Either you have to be willing to start at least 10 businesses, or you have to have a plan of action going in where you take on the risk in increments that you can handle.

That's all I've got for today.

Phase 2

I picked up the laptop last night from the guy who I setup a deal with on Craig's List. It was a long drive out to the exchange location and back, but it was worth it since a laptop will be extremely valuable for storing leads. The only problems are that it doesn't have a wireless card or spreadsheet software and it smells like either coffee or some kind of tobacco or smoke. I can always pick up a wireless card at some point so that's not that big of a deal. I'm going to install Open Office on it tonight, so that'll fix the spreadsheet problem. I'm hoping over time the smell will start to fade and then disappear.

Tomorrow I'm going to do my new routine of going to another county courthouse as well as the one for the county I live in. From the articles I've been reading about housing prices and foreclosure rates, I'm guessing the average I've had for the last two weeks should remain consistent if not go up. Having a laptop will be greatly helpful when writing up 90 or so leads.

I still haven't solved the greater problem. Clearly my investor is not working out very well. I need to find more than one, as well as target ones that work specifically on foreclosure cases. Even if the agreed rate drops and I only get $500-1000 per sale, it still beats not getting anything. I plan on going to an REI meeting, like I mentioned previously, but the next one is going to be a week from Saturday. I'll have to scour the paper today and tomorrow and see if I come up with any ads that could lead me to investors.

Aside from that, I've been exhausted this week. I'm reading World Without End, the most recent Ken Follett book and sequel to Pillars of the Earth. It's an excellent read, but it entices me into reading for long stretches and staying up later than I normally would. I recommend it for anyone who is looking for a leisure activity. It's about 1,000 pages long, so based on how fast you read it could be a source of entertainment for a long time. Normally I read pretty quickly, I finished the last Harry Potter book in under 24 hours, but this book makes you think because there are a lot of intricate plot lines and you really get drawn into the environment and care for the characters.

Reader Feedback

A call out to the readers, if you know any ways of advertising a blog, finding investors, or just have interesting or helpful books that you suggest, please feel free to comment and let me know.

Laptop Pursuit

So after a few days of scanning Craig's List (more like a week at this point), finally a seller not only contacted me back with answers to my questions, but actually showed enough interest in selling the item listed that I've arranged a time for the sale. Unfortunately, it's like 40 miles from my house so it's going to be a long drive up and back. It'll be worth it to have a laptop to use for this week. I've found that the transfer time from written out to the computer is much faster than from the source at the courthouse to where I write it out. I imagine by bypassing the writing stage completely, the time I have to spend at the courthouse will be greatly decreased. I'm sure over the upcoming months, the time saved will greatly surpass the time spent driving up and back tonight.

The only other problem is that I've lost confidence in my current investor. Not responding to me for 2-3 weeks does that kind of thing. But currently I do not have any other investors lined up. I will most likely continue sending leads to him for now, but I found another potential investor's number in the paper yesterday, so I just have to call and hope that they are what I'm looking for. If not, there is a REI club meeting a week from this Saturday that I will go to. If you can't find an investor at a REI club meeting, something is terribly wrong.

If the flow keeps up at 90 or so, or even 75, that's still way too many leads for one investor to take on anyway. I need to start branching out, finding people who work specifically with foreclosure cases and actually start getting some sales done. Right now I have the flow coming in where I need it, but nothing is coming from it. The laptop will make that process even easier but it still adds up to zero without it leading to sales.

Stocks

I did some calculating of my stock performance today. I'll post all the numbers if people are interested. Currently I stand at an annualized ROI of 12%. It's an ok start, esp since I haven't actually fully primed the pipe with one year's worth of investment, but I'm a little disappointed. The advice in The Little Book that Beats the Market says to put about 1/3 of the amount you are going to put into your portfolio in the first year because over 3 year periods the average ROI should be between 20-30%. I haven't figured out what my plan is for after December when I reach the 1 year mark, but I might juggle some of my other investment amounts and keep the amount I'm putting into individual stocks steady.

I've come to realize that the mutual funds that I'm invested in through my 401ks, Roth and house fund are not performing up to the standard I'd like. I have a lot more faith in my individual stocks since I know exactly what they are invested in, I can focus on lowering the amount of tax by making sure they are taxed as long term capital gains, and there are no management fees and small trading fees. I realize that 401ks and Roths are tax free accounts, but the performance is still controlled by the company managing the fund, so they probably spread their costs equally across their accounts. Also, in my breakdown I count the 401ks and Roth as savings accounts and I'd like to get the percentages to favor investments over savings.

Quick Rant

First off, I really like Facebook but this just needs to be said.

I read this great article on Codding Horror: the Daily WTF recently that talks about Why Does Software Spoil. It's mainly because rather than focusing on performance and fixing bugs, new iterations always add more and more features. These features are great sometimes, but over a long period of time you get to the point where the core functionality that you use something for is eclipsed and ruined by a gross amount of unwanted features.

Welcome to today's Facebook.

What I use to love about Facebook was that it wasn't MySpace. It was exclusive to college aged or near college aged people. It was centered around finding people in your classes or that you meet on campus. Once you did, then you had all their contact information or at least a method of reaching them as well as a basic profile about them.

Nowadays, Facebook is filled with crap. This whole "Ninja vs Pirate", "Vampire", "Werewolf", "Zombie", "Write on someone's wall in paint" and various other plug-in stuff is crap. Not only does it make everything load slower, but it clutters up the page real estate. The last straw is coming soon because Facebook is going to become International. I can picture it now, everyday you'll see a new friend request from Viagra or Cialis written out in a mixture of characters and numbers or in Russian.

Unfortunately, I don't have a solution. I'm just sad that another great tool is starting to grow mold.

Habitually Automatic

First off, congrats to everyone who owns Apple stock. I wish I had more shares because today was a big day. I imagine it is only the first of many to come, so if you don't have any, look for dips and jump on in.

In some reading I did today, Get Rich Slowly did a review of The Automatic Millionaire ( link for the review). The review was excellent and the book seems to have a lot of good concepts. I think there are a few factors that are also important in the quest to becoming wealthy that were not mentioned though, so I'd like to build further.

What really matters? Four Points that really matter towards building wealth:

Point 1 - Your Net

First of all, it seems The Automatic Millionaire hits dead on with spending habits. What you do with your after tax money is extremely important. Of course you need to spend it to survive, but how and what you spend it on will determine, very clearly, your future. I like to think of it like every dollar you make, net (or after tax), is your employee. If you don't manage your employees well, the business that is your financial future will not continue to grow and may even go bankrupt. So setting up automatic deposits and planning for your retirement should be the first step. As they say, spend less than you earn, save up and start building wealth.

Point 2 - ROI

In line with this, the next point is what return on investment you are getting. Basically, measuring how well your employees are performing for you. If you read The Little Book that Beats the Market, it discusses how to determine a base line for your ROI. Basically, you can get a 6% ROI with little to no risk if you buy US Treasury Bills that are backed by the stability of the US government, or something to that effect. So if you aren't getting at least 6%, then you should change what you are doing.

The stock market indexes average about 11-12% over the course of their history, so with a little knowledge and a little risk, along with a long enough investment horizon, you can easilly get a better return than a lot of high fee mutual funds or leaving your money in a Money Market account will get you. But you should be able to get an even better return than that.

Point 3 - Your Time

The best and worst part of the stock market, is that you are not in control of your return once you've bought your stocks. For most people, this is good enough and they are content with leaving their future in the hands of other people that they believe are more competent than themselves. The rest of us are hungry to get even better returns. That's how point three comes in.

What better can you invest in than yourself? How you spend your free time will also determine your future. If you read my blog, you can see that I'm trying to build a business in my spare time. That's because I know that eventually I will start to create revenue with the skills and knowledge base, as well as connections, that I am building. Everyone who went through college and got a degree has already seen this process work. Putting the time in to study and learn is what got you the job that pays your bills and gives you the foundations for wealth already. Why stop there? Why not keep educating yourself towards the goal of being the guy at the top of a company directed towards your own interests? The only difference between the employee and the boss is the amount of time they've put into something and their persistence towards continuing to learn.

So just like your money being your employee and working for you, if you make your time work for you now, it will pay off in abundance later. I've said it before, but the one main commonality between the richest Americans is that they all started a business or own a business. The potential is there for everyone, it's just a matter of taking action. Your time can have exponential gains for you just like your money.

Point 4 - Multiple Streams of Income

The final point is the end result of all the previous. By making your money work for you, you start to develop a stream of income that is not reliant on your efforts but only your direction. As this grows, so do good habits and your knowledge and ability. As time is going by anyway, if you use your time and energy to build a business, eventually you will get to the point where you can hire people and promote yourself up the ladder. Eventually, you will promote yourself all the way up to a primary stock holder and not have to be actively involved in operations anymore. That frees you up to start again, setting up more and more streams of income. As you do it, it gets easier and easier and your have more and more time and freedom. This is why you hear the phrase, "the rich get richer", because as wealth grows it becomes easier for it to continue to grow. At the end, you're doing very little work but making more money than just your time and labor would ever be able to make alone.

Habitual Millionaire

If you're young enough, it's likely that changing a few spending habits and removing temptation by automating where your money goes will eventually make you a millionaire. In doing only this though, you are giving up your time. If you follow the rest of the points, both your time and your money will grow exponentially and you will reach your goals much faster. So while I definitely agree with taking the first step, I also suggest not making it the only one you take. The first step is always the hardest, so if you're going to take it, be aware that you're already well on your way.

A New Week

Last week's expeditions went very well. I was able to collect 93 leads for the week and send them off to my investor. Sadly, I still haven't heard anything back from him, which, along with a total lack of production, has made me lose all the faith I had in him. So I think I'm going to go back to the drawing boards and try to collect a bunch of new investors. Specifically, I'm going to target ones that deal exclusively or mainly in foreclosures, since they should be up to date with all the laws and capable of actually making deals happen. I figure, if I'm going to have the production like I had last week, I need to actually start capitalizing.

Today has been pretty depressing outside of potential business success. The stock market is taking a beating and there seems to be large amounts of talk about a recession. I've built my portfolio around some international stocks or at least ones that should benefit from international markets, but it seems that when the US isn't doing well, there is almost a gloom around the whole market.

The other thing I'm frustrated about is the lack of returns on my money. At this point I've built up a pretty solid stockpile of capital, but it's growing so slowly that it might as well be sitting forgotten in the bank. This, along with this book I'm reading, has me thinking about the "class system" that exists even today.

The Class System

Way back, there was a clear separation between nobility, middle class, and poor. The nobility were the lords of the land, who didn't do any of the work but rather played on people's fear of God and lack of education to get them to follow them without question, working their land and paying taxes to them for the privilege. The middle class would work through apprenticeships for years, slowly learning and practicing a skill, until they became a master themselves with their own business. Then, based on the type of work they did, their trade pretty much determining their income level and social standing. The poor, with little or no education, did the manual labor that was needed to supply the goods and food for society. I think that, while slightly different in form, the system still exists today.

The poor nowadays are those who are right at or around the poverty line. Maybe they don't have a college degree or maybe they just don't care about the quality of their work, but they sit at minimum wage or so, barely able to get by. The middle class are educated, usually with degrees, but end up working for companies, doing skilled labor but not having any real holdings in the assets that they are building. Content with their paycheck, they live through there days keeping up with the status quo and being entertained by sports and TV.

Todays nobility are the business owners. Those who, through whatever means, own the company they work at, or a large apartment or office building that generates revenue for them with little actual work needing to be done. They employ the poor and the middle class and keep them content with benefits and slow pay raises. Meanwhile, they're paying less tax and pulling in money just because they are willing to go outside the main society lines and do things differently.

Great, so now what?

So, the real question in all of this is, how do you cross the lines up the class system? I've struggled with this one for a while. I have I read numerous books, learned about many investment tools and had many conversations with various people of different social standing. There is only one way to do it.

People are a product of their habits and their environment. If you want to change where you are and who you are, you have to change who you spend your time with, what habits you foster and what thinking process you support. The three classes just think and do fundamentally different things. If you are always around people who think like you, you will continue to do things the way you do. If you have problems, you'll ask your close friends for help and they'll give you the solutions that will keep you where you started. The only way to break free is to change all of that.

It's not an easy path. Hard work and persistence are the habits of the rich and powerful. By the time they've reached a certain status that you are aware of who they are, they have already done the hardest parts. You see the end result, the wealth, the freedom, but all the extra effort and behind the scenes work that it took to get there is gone from view.

So don't be fooled. If you want to change, do it, be bold. Step outside the box, find those who want to help you and see you succeed, help them as they help you. For the rest, leave them behind and move on. You can't help them by lagging behind and trying to hold their hand. Be a beacon of success for them by being a success yourself.