“Books are farms. Reading is harvesting. Talking about what you read is replanting.”

– Michael Masterson

 Just One Thing: American Teenagers Are Getting Dumber

Despite decades of effort and billions of dollars spent on government programs to improve primary and secondary school education, American students seem to be getting dumber.

Earlier this year, about 600,000 15-year-olds from around the world took a test (the Programme for International Student Assessment) that is given every three years to determine competence in basic knowledge and skills.

The results of the test were announced last week. The top 4 cities in reading all came from China: Beijing, Shanghai, Jiangsu, and Zhejiang.

In the country totals, Singapore, Macau, Hong Kong, Estonia, Canada, Finland, and Ireland were at the top. The United States was far behind, along with the United Kingdom, Japan, and Australia.

Even more disappointing is that the results for US students have been going down since the test was initiated. This while students from poorer countries like Portugal, Peru, and Colombia are showing improvements.

This is not good news. But these rankings don’t convey how bad the situation is. Here’s a fact that does:

20% of American 15-year-olds that were tested last year had reading skills that were “less than what would be expected of a 10-year-old.” 

How can this be?

Education experts disagree, but one thing is indisputable: All of the expensive federal efforts that focused on low-performing students (including No Child Left Behind and the Common Core) have failed miserably.

The Common Core is the most recent of these efforts. It began almost a decade ago as a “national effort by governors, state education chiefs, philanthropists, and school reformers to enrich the American curriculum and help students compete with children around the world.”

Its priorities included increasing the amount of nonfiction reading, writing persuasive essays, using evidence drawn from texts, and adding conceptual depth in math.

That sounds sensible. And it might have worked. But once again, politics got in the way. The left opposed it because it “unfairly targeted” children of color. And some right-wing groups objected that it was an “unwelcome [federal] intrusion into local control of schools.”

So it fell apart. And left 20% of our 15-year-olds functionally illiterate.

I wonder how that’s going to work out.

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“Thaw with her gentle persuasion is more powerful than Thor with his hammer. The one melts, the other breaks into pieces.” – Henry David Thoreau

 

The ABCs of Inventing a Blockbuster Big Idea Campaign 

I’ve heard gurus call all sorts of sales letters “Big Idea” packages simply because they became controls or broke a sales record of some kind. These included leads that touted:

* 10,000% returns on gold stocks

* 5 words you can say to your banker to make $200

* What never to eat on an airplane

* 13 Ways to Bring in More Customers This Year

* The trading strategy that works 94.6% of the time

* An ancient Indian cure for cancer

These are not Big Idea leads. They are based, as you can see, on promises or solutions. Promises and solutions are not ideas. They may sometimes contain ideas, small ideas, which help rationalize the selling proposition. But the sale is made by the promises and the solutions, not by the ideas. The marketer or copywriter that doesn’t understand this will never be able to harness the power of the Big Idea.

As I explained in my last essay, the Big Idea was originally used by David Ogilvy to describe what he was doing back in the 1950s – magazine ads that depended heavily on images to promote brand recognition. They worked by making subtle promises for psychological benefits that the prospect would enjoy by using the product. Two decades later, Bill Bonner reinvented the term for the direct response industry. Instead of the blatant leads that were popular at the time, Bill wrote very long indirect leads about something that initially did not seem to have anything to do with the product.

When you’re writing in an indirect way, having an idea matters. But not just any idea. For the Big Idea package to work, the idea has feel big in terms of its intrinsic importance and its consequences. It has to be an idea that matters to the prospect. It must be an idea that threatens (or promises) to change the world that he lives in. It has to be exciting and amazing. Most importantly, it has to feel true.

Big Idea packages often make promises. But the stated promises are secondary to the deeper promises, which are never stated but implied. In that sense, the promise of the Big Idea package is similar to the promise of Ogilvy’s Big Idea ads. (If your lead says that the economy is going to collapse next week and “here’s how you can get rich when it does,” you have missed the point.)

What matters most is that the Big Idea must be intellectually intriguing and emotionally compelling. In fact, it doesn’t even have to be correct or intellectually sound. It can be dead wrong or illogical in some way. But if it grips the prospect’s imagination and conquers her heart, the response will be huge.

So how do you do that? And how can you know if your Big Idea can do the job?

First, you must realize that the effect of a Big Idea does not reside in its essential brilliance but in its particular expression.

During the last 25 years, for example, I’ve personally reviewed at least 100 financial newsletter promotions that were based on the same idea – that runaway debt was going to crash the stock market and decimate the economy. Half of those packages went nowhere. About four dozen did okay. And two did phenomenally well.

What was the difference between those two and the rest?

It wasn’t the core insight, since they were all the same. It wasn’t the strength of the logical argument or amount of proof offered. There were many that were stronger than the two in these regards. It wasn’t the promises made about how the prospect might benefit from the financial crises that were predicted. In general, the packages that made softer promises performed better overall.

The difference between the best and the rest was simply the way the copywriters framed and articulated the idea in the headline and lead.

There are many ways to introduce the Big Idea in a promotion. You can begin with a story or a secret or a prediction or a surprising fact. Each of these is an archetypal approach to beginning a sales pitch. (John Forde and I wrote a good book about this called Great Leads)

Within each of these archetypes there are countless possible articulations. You can, for example, conjure up all sorts of story leads. But most of them won’t work for a Big Lead packagebecause, for one reason or another, they will not have the power to move the prospect from where he is – intellectually and emotionally – when he reads the headline to where you need him to be at the end of the lead.

Getting back to our example of a financial newsletter promotion based on the prediction of an economic crisis, here’s how you do it…

When you sit down to write your promotion, you know who your prospect is. He believes that debt is bad and he is confused as to why the stock market is at an all-time high. That’s “where he is” intellectually. And “where he is” emotionally is feeling that the world is scary.

You write a headline that does its job and grabs your prospect’s attention. Now what? Now you have to move him from there to thinking that he wants and needs the product you are selling (a newsletter subscription).

To move him emotionally, you have to offer him not the materialistic promise of getting rich when the economy implodes but the promise of being a person of vision and conviction. (That is the deeper benefit that a good prospect for such a package would want.) And to move him intellectually, you have to say something that will feel big and new to him.

The two packages that did so well accomplished these requirements in spades. The first was titled “The Plague of the Black Debt.” The second, “The End of America.”

Notice that neither of these headlines sounds like something you would find in an economic treatise. Nor would you find them in an article in The Wall Street Journal. They both feel much bigger and more important than that.

Notice, too, that neither of them even mentions the promise of benefit. And they certainly don’t mention the potential for financial gain.

What they do promise is some interesting information – an explanation of how the insanely accelerating debt that the prospect is worried about will finally wreak havoc on the government and big financial institutions that have been meddling with the free market. The prospect gets an immediate payoff in the first 500 to 600 words of the lead, and is compelled to keep on reading.

The copywriters that wrote these packages understood something fundamental about Big Idea packages that most just do not get: that none of us really cares about getting rich. What we care about are the emotional and intellectual benefits that we imagine wealth will bring us.

Big Idea packages work precisely because they promise deep psychological benefits – benefits that cut through the artifice of profits and even wealth and take the prospect indirectly to a world where he has what he really wants.

And that’s why, when Big Idea packages work, they work like exploding stars.

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“An idea, like a ghost, must be spoken to a little before it will explain itself.”

– Charles Dickens

 

 The Big Idea: The Biggest Misconception in Marketing 

 Is there a marketing concept more misunderstood than the “Big Idea”?

Ever since The Agora became the dominant direct response publisher in the world, the term has become synonymous with breakthrough marketing packages. That’s because The Agora has long been associated with “Big Idea” promotions.

But what, exactly, is a Big Idea? Ask one expert and he’ll say it’s a big promise. Ask another and she’ll say it’s a big and clever lead. Ask a third and he’ll say it’s the idea behind a package that crushes the control.

This confusion is rampant across the marketing world. Even within The Agora companies, many marketers and copywriters use “Big Idea” to mean different things.

It was David Ogilvy, I believe, who coined and popularized the term. What’s interesting is that for Ogilvy a Big Idea wasn’t actually an idea at all. It was something else entirely.

He used “Big Idea” to describe what he was doing in the field of general advertising: magazine campaigns. His ads usually consisted of a photo (or drawing) and a phrase. The image provoked an inspirational emotion. The associated phrase made the connection between that inspiration and the product. Memorable examples include The Marlboro Man and The Man in the Hathaway Shirt.

Ogilvy’s Big Idea ads were not about better mileage or faster service or saving money. They were about notions and hopes and dreams. For him, Big Ideas were about what I call  “deeper benefits” – psychological benefits, such as affirmation and self-esteem. (“If I smoke Marlboros, women might find me manlier. And if women find me manlier, they will like me more. And if they like me more, I will feel better about myself as a man.”) They did not convey literal benefits of any kind.

This is a very important distinction – and a critical one, because it reflects the essential difference between general and direct response advertising. The primary goal of general advertising is to create brand recognition. The primary goal of direct response is to elicit an immediate response (usually, a sale). The first relies heavily on images. The second almost entirely on language.

This is not to say that language did not (or does not) play a role in general advertising. Before Ogilvy, there were many successful general advertising campaigns that relied primarily on language. But these tended to focus on a USP, such as how smooth and quiet the car’s engine might be. An image was usually present, but it was there primarily to support the USP or simply showcase the product. It wasn’t expected to carry much weight.

Ogilvy’s Big Idea campaigns were, as I said, short on words and big on imagery. And when they worked, it was the imagery that did the heavy lifting.

His understanding of imagery was brilliant and enormously successful. The Big Idea became the standard for what a great brand advertising campaign could be. And it still is today.

But in the 1980s, on the other side of the advertising pond in the world of direct marketing, the Big Idea was being used to describe an entirely different approach. Bill Bonner was having great success writing direct mail packages to sell investment newsletters. And he was doing so by writing long letters explaining what was wrong with the economy and how those problems were going to radically change the investment landscape.

Nobody was writing promotions like that at the time. Everyone was writing packages about how much money one could make by investing in gold or in a particular group of stocks.

Bill’s sales copy was short on promises and offers but big on ideas. Ideas such as: Government debt will lead to a massive recession. Or: Inflammation is the cause of all modern illnesses. His interest in those ideas was the basis of a new kind of marketing strategy. And he used Ogilvy’s term for it because it accurately described what he was doing.

Bill began his sales letters with an indirect lead – writing not about the product but about an idea that might seem at first unrelated to the product. By doing this, Bill believed, the customer would be less resistant to the sales pitch itself and more open to thinking about problems that might get him into a frame of mind (and heart) where the product might suggest itself as a natural solution.

When I started working with Bill at Agora in the mid 1990s, we began the first training program in our industry in copywriting. I had brought with me a lot of ideas about how to best write direct sales letters – not just promise-oriented pitches but offer-driven campaigns and invitations, too.

Together, we taught the full range – from the most direct leads (offers) to the least (stories). We met every day for about a year with a dozen fledgling writers, many of whom went on to have very successful careers. And we continued to develop ideas about effective copy and how to teach it for many more years.

During all that time, the status of the Big Idea as a marketing “secret” never lost its appeal. People still talked about it, wrote essays on it, lectured on it, and so on. But the definition was becoming more and more diverse.

Nowadays, the “Big Idea” retains neither David Ogilvy’s original meaning nor Bill Bonner’s reinvention of it. For most people, it simply refers to a sales campaign that works really well – i.e., one that gets a very strong response.

This is unfortunate for two reasons: It renders the term meaninglessness, and it deprives young copywriters of an understanding of the concepts behind both Ogilvy’s and Bill’s thinking.

For Ogilvy, a Big Idea was an evocative image that could be connected with a psychological benefit. For Bill, it was an actual big (i.e., important) idea that had or could have significant consequences for the prospect.

But what a Big Idea is not(and this perhaps is the key thing I’m trying to convey here) is a strong promise or a clever offer or a captivating story – or any of the other things marketers do to stimulate sales. A Big Idea in direct marketing can only be an intellectually and emotionally compelling idea.

Offering a quick and easy solution to a problem… introducing a startling fact… making a convincing argument… these are all very solid ways to structure a sales pitch. And if you asked me to do the arithmetic, I’d guess that they account for more than 80% of the successful sales campaigns that are out there today. I can tell youfor certain that The Agora has sold more subscriptions with direct leads that featured promises than it has with indirect ones that presented Big Ideas.

That said, when they work, Big Idea packages can be game changers. A single campaign can literally double the size of your business.

So how do you write one? I’ll tell you in my next essay…

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“Skill and confidence are an unconquered army.” – George Herbert

Principles of Wealth #35* 

With respect to building wealth, there are two kinds of skills: financially valued skills and financially valuable skills. Developing skills in either category is a big advantage in building wealth – but the financially valuable skills are more important.

We are all aware of the financially valued skills. They are the skills that can earn you a lot of money. Practicing medicine is every ambitious parent’s top choice for their children. But lawyering, accounting, and engineering are also popular.

The advantage of such professional skills is that they can be learned by anyone that is reasonably smart and doggedly determined. There are other financially valuable skills – like batting at 400 or having a knockout punch that requires not only dogged determination but also rare natural skills.

When my son decided to study computer engineering in college, I agreed that he would be acquiring a financially valued skill. But then I explained that if he could also acquire a financially valuable skill his opportunities for building wealth would be much, much greater.

In a note to him before he left for school, I wrote:

“There are plenty of financially valued skills. And, yes, societies and companies value people who know how to design a car engine, analyze a spreadsheet, or fix a broken arm.

“As an engineer, you can earn very good money – so long as you continue to develop your knowledge of engineering and keep up with the changing technology. But you should recognize that however valued your engineering skills may be, your employers will always think of your work as an expense, rather than as a way for them to grow the business and increase profits.

“Only by developing – and mastering – a financially valuable skill will you be guaranteed a high income for the rest of your life and perhaps one day have the opportunity to become a company owner.”

So what is a financially valuable skill?

It is one that creates wealth opportunities for others. There are many skills of that kind, but they are all related to generating sales and profits. Here are four of the most important:

The 4 Financially Valuable Skills 

Marketing: Reduced to the simplest terms, marketing is the art and science of acquiring customers at a reasonable cost. This is the most complex of the financially valuable skills. It normally takes years to acquire it. Most people that call themselves marketers do not possess this skill.

Selling: Selling is the skill of persuading a customer or prospective customer to buy a particular product at a particular place and time. There are as many ways of selling things as there are salespeople. Generally speaking, however, sales strategies can be broken into four objectives (fast, slow, short, long) and two methodologies (hard and soft).

Creating Saleable Ideas: The financially valuable skill of “creating” refers to the skill of developing product and service ideas that can be profitably sold in a given marketplace. Most businesspeople that think of themselves as “creative” have little or no idea about how to originate such ideas.

Managing Profits: Profit management has two very specific objectives – to promote productivity and reduce unnecessary costs. With respect to the protocols and processes of business (buying, selling, marketing, information technology, and accounting, for example), this requires an eye for detail and a knowledge of pricing. With respect to employees, vendors, and advisors, it requires the secondary skills of diplomacy and persistence.

* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost. 

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“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” – Sun Tzu

 

Principles of Wealth #34* 

According to the financial planning community, asset allocation is the single most important factor in building wealth. This is misleading.  The most important factor is actually risk management. Asset allocation is just a part of risk management. The other two parts are position sizing and loss limitation.

 Risk is an element of every investment transaction. But if you know what you’re doing, most of it is unnecessary. And by knowing what you’re doing, I mean following the “best practices” I’ve discovered over the years.

 

Asset Allocation

Asset allocation means dividing your investment capital into different asset classes. By doing that, if one asset class tumbles, you have money invested in other classes that may not drop as fast… or may hold strong… or may even increase in value.

To show you how important asset allocation is, let’s look at would have happened to two investors in 2008.

Our first investor is “Joe.” He had 100% of his money invested in the stock market in 2008. Let’s say $100,000. In other words, he had no diversified asset allocation plan, and his money was wide open to stock market volatility. So when the S&P 500 dropped 37% that year, Joe lost $37,000.

Our second investor, “Nancy,” also had $100,000 invested. But she took a more conservative approach. She followed the traditional Wall Street asset allocation model – 60% in stocks and 40% in bonds.

Like Joe, Nancy lost some money when the S&P 500 dropped 37%. But she had fewer of her dollars in the stock market. Therefore, she lost less than Joe did. That alone makes her strategy superior. But it gets better…

Bonds are typically inversely correlated to stocks. And in 2008, when the stock market was plummeting, bonds rose 5%. So while 60% of Nancy’s money dropped 37% (her stock market losses), the other 40% of her money rose 5% (her bond gains). So Nancy actually lost only 20% of her money in 2008, or $20,000.

Had you invested your money with the “average” financial planner back then, this would have likely been your outcome. That’s why the two-asset class “Wall Street” model is far from optimal. And that’s why I recommend reducing your exposure to stock market risk with an expanded asset-allocation strategy that includes such things as real estate, gold, cash, and entrepreneurial businesses.

 

Position Sizing

Position sizing is a simple strategy dressed up in a fancy name. The idea here is to limit risk by deciding you won’t put more than $X or X% of your capital in any single investment.

Where asset allocation reduces overall risk, position sizing reduces the risk within each asset class.

If, for example, you had $800,000, you might put $100,000 in each of eight asset classes. That’s asset allocation. Position sizing would determine how you divide the $100,000 in each asset class between individual investments.

You might say that you’ll invest no more than $8,000 in any one deal. $8,000 is 1% of $800,000. So if one investment of $8,000 went down to zero, your Free Net Wealth ($800,000) would go down by only 1%.

Like asset allocation, position sizing is a way for conservative investors to protect themselves from catastrophic losses. I’m a strong proponent of position sizing. This is an important safeguard – especially if you ever find yourself wanting to “go big” on some gamble.

Keep this in mind: The smaller you can make your position limit, the safer you will be. My position limit is 1% of my Free Net Wealth on many of my stock investments. But when you are starting out, it will be hard to set such a small limit. A good rule of thumb for most people is 3%-5%.

 

Loss Limitation

When you use position sizing to buy stocks, you are limiting your potential losses to a percentage of your portfolio (1% for me – maybe 3%-5% for you). But you can further reduce your risk by attaching a “stop loss” to each stock you buy.

A stop loss predetermines the price at which you will sell a stock if its price drops that low. If, for example, you set a 25% stop loss on a $20 stock, you will sell it if its price drops to $15. This reduces your risk for that stock to 25% of its position size.

Getting back to our earlier example and assuming that you have $8,000 invested in the stock (your position limit)… If the stock’s value dropped 25% to $6,000, you would sell it. You would take a loss of $2,000 and no more. And if, as in our earlier example, you had a total of $800,000 invested, your total loss on that investment would be only one-quarter of 1% of your Free Net Wealth.

Stop losses allow you to control what you are willing to lose. They remove emotion (an investor’s great enemy) from consideration when a stock, a group of stocks – or even the entire stock market – is tumbling.

And as you can see, when you combine stop-loss limits with position sizing, you reduce risk dramatically.

* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost. 

 

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 If you are not happy now with what you’ve got, you won’t be happy later if you get more.” – Michael Masterson

Just One Thing: You’re Not a Pharaoh. Don’t Act Like One

Several years ago, The New Yorker published a cartoon of a man on his deathbed saying, “I wish I’d bought more crap.”

That says it, don’t you think?

The pharaohs apparently believed they could take it all with them. So they did. But when their bodies were found years later – as desiccated, linen-wrapped bones – their treasures were gone. Plundered.

That’s the thing about Mother Time. She’s a Socialist. Sooner or later, she’s going to put your hard-earned things into the hands of others. Whether you like it or not.

You can write a will. You can spend a small fortune on an estate plan that will ensure, for some amount of time, what will happen with your “things.”

But even the best legal work can be thwarted by legal work that comes later, when you are no longer around.

The problem is people. As the late, great Joe Gondolfo, life insurance salesman extraordinaire, used to say from the podium: “People change when people die.”

* You leave all your money to rebuild the local library, where you volunteered during your retirement. A year after you are gone, there is a change in the board. The new board decides to sell the library and invest the proceeds in a technology school. “Books are passé,” the board president says.

* You have three rare coin collections, each worth $150,000. You leave one to each of your children. By the time you go, one is worth $300,000, another is still worth $150,000, and the third has depreciated by 300%. Your kids are unhappy with the situation. They secretly blame you.

Your financial life can and should be divided into two parts:

Part 1. Earning money to acquire things you need, and

Part 2. Deciding what to do with those things when you no longer need them.

Most people put off Part 2 as long as they possibly can, until death is knocking at the door. Many never face up to Part 2. They go to their graves owning everything – the house, the valuables, and the money.

This is not a good idea. I’m assuming you know that, so I won’t belabor the point here.

My view is this: Once you have bought all the things you need to live comfortably, additional buying will be counterproductive. You will be spending money on things you don’t need for the very ephemeral dose of dopamine it will give you. But buying them won’t give you half the pleasure it once did… when you needed them.

Moreover, these “things” will start to accumulate – in your basement and attic and closets. You may even rent storage units to hold onto them.

And then what? You die and Mother Time distributes them as she sees fit. Your wishes no longer matter. And she’s a Socialist.

There is only one thing you can do about this. No, two:

  1. Stop accumulating things you don’t need.
  2. Start giving away the accumulated things you don’t need now.

So before you buy anything else, ask yourself these questions:

* Am I going to actually use this thing?

* How much pleasure or satisfaction will it give me?

* Is there something else I can do with the money that would give me greater pleasure?

If, after answering these questions, you decide to buy the thing in question, ask yourself this: Who should I leave it to after I’ve stopped using it?

Then don’t wait till you die to give that thing away. Give it away the moment you stop using it.

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“The most important secrets of every business are almost always invisible to outsiders – especially investors.” – Michael Masterson

Just One Thing: The Economics of Overseas Resort Development in One Lesson 

A colleague writes:

An associate I’ve worked with for a while and come to know and respect has developed a high-quality, eco-friendly project on the Pacific coast of Costa Rica. They are well along and are now raising equity capital to build out the central village. They are in active discussions with some boutique hotel companies as well.  

They have around $1.5M committed toward the $5M raise for the village construction. 

Great location, top surf break, centralized solar power system coming in, mini-farm, beach club, etc. 

I can attest to the intelligence and integrity of the co-founder.  

They are seeking investors, but also are keen to make deals with publishers to promote lot sales. Possibly even an exclusive. There are multiple phases so quite a bit of upside on lots ahead. They’ve sold quite a few lots on just word of mouth with no real promotion. There are houses going in. 

This is a very well planned and thought out project with great people in charge.

Sound interesting?

If I were asked to write a sales letter promoting this property to investors, I’m pretty sure I could make a strong argument with these details.

But would it be a good investment?

Here’s the thing: Every business sector has its own logic. And it’s an internal logic, not visible to outsiders. Until you’ve been in the business, you can’t know how it really works. And often, the most important circuits of that internal logic run differently than you’d expect.

In this case – developing a resort community in a foreign country – having a great piece of land is not nearly as valuable as you might think. In fact, it’s more often a liability than an asset.

When my partners and I got into the business more than 20 years ago, we bought a huge swath of land on a beautiful stretch of Pacific Ocean coast. The views, the surf, the opportunities were amazing. And we paid something like $500 an acre.

Today, those acres are selling for a minimum of $100,000 each. So we must be making a fortune, right?

That’s what we thought. It turns out that in this particular business there are three things that matter much more than the cost of land. One is the cost of infrastructure. Another is the cost of money. And the third is the cost of sales.

Infrastructure: Before I got into the business, I thought infrastructure costs  – electricity, running water, roads, sewage, etc. – would be the same, or even less, than they are in the states. But when the location has no running water, sewage services, or reliable electrical service, and when you have to build the roads yourself, the cost can be much more than you’d pay in the States.

Money: Development takes time. And time is money. It doesn’t matter whether you are using equity or debt, that money’s going to cost you. It’s going to eat up the profits. The longer the project takes to complete, the higher that cost of money. And it always takes longer than you think.

Marketing: Forget about the 3% to 6% sales commission you’re used to paying in the States. That won’t get your lots sold in an area that has no published listings and, more importantly, no local demand. What you need is a targeted marketing campaign to the 0.1% of Americans that are candidates for this kind of property. And the cost of that marketing is very high. If you are good, it will cost you 50% of the sale price.

So back to that $500 lot that sells for $100,000… The infrastructure costs – per lot – will be i $30,000 to $40,000. The cost of money, given the fact that the project will take at least twice the time you thought it would: another $10,000. And the marketing: as much as $50,000.

Yes, good money was made. But very little or none of it went to the investors.

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Just One Thing: Are You a Grower or a Tender?

Take This 10-Question Quiz and Find Out 

If you want your business to run smoothly, manage it well. Tend to the details. Think in terms of people, protocols, and production.

If you want your business to grow, forget about all that. Put someone in charge of it who is capable of creating growth.

Growers are rare birds. It’s quite possible that – other than you – your business doesn’t have a single grower in its employ.

Or maybe it has one or two, but they are not being given the liberty they need to do what only they can do. In that case, their superpowers are negated.

It’s also possible that you are not a grower – that once you were but now you are a tender.

Here’s a quick test to find out. Take it yourself, give it to someone else, or take it on behalf of someone you supervise.

Management Personality Test: 10 Questions Based on the Common Impulses and Characteristics of Growers 

  1. What do you care more about – quantity or quality? Would you rather have a bakery known for being the best in the city… or a factory selling more baked goods than anyone else in the state?
  2. What do you typically think about at work? How to solve problems… or how to boost sales?
  3. Do you welcome new marketing and sales ideas? Do you see them as exciting opportunities… or as extra work that will just screw thing up and slow things down?
  4. Would you describe your management personality as understanding or impatient?
  5. On a scale of 1 to 10, how competitive are you?
  6. Are you fair about the expectations you have of your fellow employees and subordinates? Do you demonstrate that fairness… or do you frequently indicate that you’d like things done faster?
  7. Do you care about other people’s workloads or problems? Or do you care only about getting your own agenda done ASAP?
  8. When someone suggests a new product, protocol, or plan to increase sales, do you endorse it immediately… even though you are not sure it will work?
  9. Do you understand the need for bureaucracy? Or do you have zero patience for it?
  10. With respect to your career, what’s more important: being admired for your character… or venerated for your success?
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Just One Thing: How to Get People to Like You 

I’m perverted in oh so many ways.

One perversity of mine is the habit of being disagreeable with the people I care about. If I don’t care about someone, I’m as agreeable as a sunny day in London. I will laugh at every joke, no matter how lame, and concur with every opinion, no matter how idiotic. But if I care about someone, there is nothing I like better than to challenge everything they say.

I’ve wondered why I do that. It could be that it’s a screening process – to cull out from potential friends the superficially attractive from the worthy contenders. Or it could be that I have such a low opinion of myself that I want to sabotage the relationships that hold the most promise.

And yet I want to be liked. And to be liked by everyone – even those I don’t like.

Here is a fact about human nature: We tend to like people that admire us. Why? Because it makes us feel validated. (“I must be okay in some way if this person believes I am.”) I’m sure an evolutionary biologist could tie that into a survival instinct – joining a tribe for self-protection, perhaps. In any case, it’s an indisputable fact.

And there’s a pragmatic benefit to being admired. People that like you are more apt to cooperate with you. This is why so many successful business people and politicians are able to build teams of people behind them.

There are established methods for getting people to like you. The most popular is probably the one advocated by Dale Carnegie and by Mystery (the reality TV pickup artist): Don’t talk about yourself. Pay attention to them. Listen to what they say. Affirm their feelings. Remember and use their names. Compliment them.

This may sound artificial or manipulative. But I learned long ago two things that I have kept in mind: (1) Even if you are faking your admiration, it is still appreciated. And (2) if you can pay attention to and compliment people earnestly, your likeability will be even greater.

I was reminded of this recently by Donald Miller, a business blogger that has a talent for communicating simple but important business ideas. In a recent essay, he told a story about a fishing trip he took with several of his buddies…

At dinner, one night, one of the guys suggested that they each stand up and accept a standing ovation from the others. Initially, Miller said, he recoiled at the idea. But he went along with it. And when he did, he discovered that he had no trouble participating. “I realized that there was something about each of these men that I genuinely admired,” he said. “I was happy to applaud them and happy to receive their applause.” (I’m paraphrasing.)

I began using this strategy in business about 20 years ago. As a mentor to copywriters, I had a reputation for being critical. I’ve been told that more than once my comments devastated people. I was shocked to hear that and determined to change my ways.

I wasn’t going to refrain from saying what needed to be said. But before I dared to say anything negative, I found something – some aspect of the person’s intelligence, work ethic, or talent – that I could praise. It didn’t have to be a big thing. But it had to be true. They had to know that I honestly admired them for this specific thing.

The result of putting this into practice was a noticeable improvement in the progress of the people I mentored. I believe it was caused by their willingness to accept my criticism because I had established a basis of trust.

The key to this technique is to zero in on something you truly admire about the person and be willing to state it repeatedly and, whenever possible, in front of others. If you fake it, it will (as I said above) still make them feel good. But they will see it as flattery and it won’t build the trust that you want and need.

Some people do this naturally. Number Three Son has been doing it since he was a toddler. When he meets people, he instinctively searches for something he likes about them and expresses it in terms of admiration. He doesn’t do it with any ulterior motive. He does it because he feels it. (It’s not surprising to me that he has such a diverse group of friends and colleagues.)

AS, a high-school friend of mine, is also a master of this technique. He is always telling friends and even strangers what he likes and admires about them. He does it to me all the time. It can be something as unimportant as a quirk or some little routine that he finds amusing. But the telling of it – when it’s genuine – has a powerful impact. And the result? He has dozens if not hundreds of people that like him and would be happy to help him out if he needed help. When it comes to goodwill, his account is overflowing.

Donald Miller’s essay reminds me that relationships are built on trust, and trust is built on belief. Think of every conversation you have as an opportunity to add some goodwill to your personal likeability account.

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Please… Don’t Follow My Advice!  

There are times when I want people to follow my advice, but not often. Most of the time I want people to listen to what I’m saying with an open mind, and then do whatever they think best.

True story…

When cryptocurrencies were at the height of their popularity several years ago, I had the following conversation with a brilliant young man that had worked with me in the investment advisory field:

DT: I’m thinking of going back to work. I could use some extra savings.

Me: “What? But surely you are rich now. Weren’t you an early buyer of Bitcoin? Didn’t you have a significant stake?”

DT: “Yes. But I sold it. I made a few hundred thousand. But I could have had millions.”

 Me: “What the hell happened?”

 DT (looking at me quizzically): “Huh? You don’t remember?”

 Me. “Remember what?”

 DT: “About a year after I bought it, I asked you what you thought about cryptos. You said you didn’t believe they would ever replace the dollar.”

 Me: “Yes. I still feel that way.”

 DT: “You said you thought their value would ebb. That they might even become worthless one day.”

 Me: “And?”

 DT: “And so I sold them.”

 Me: “You what?”

 DT: “I sold them.”

 Me: “Why did you do that?”

 DT: “What do you mean? You practically urged me to sell them?”

 Me: “I did no such thing. But even if I had, why would you make a decision based on my opinion? You are a market analyst. One of the best I ever worked with. I’m just a businessman with a bunch of ideas. I’m hardly an expert in cryptocurrencies.”

 DT: “Yeah, but you made a convincing case.”

 Me (shrugging): “That’s what a writer does. But sometimes I’m wrong. There’s a big difference between making a good case for something and being right about it.”

 DT: “Well, I wish you had said that before you gave me your advice on Bitcoin.”

As a writer, I write about lots of things. When I write about wealth building or personal productivity, my ideas are based on my experience – what I’ve done and what I’ve observed firsthand. When I write about investing, my ideas are based only partly on what I’ve done. They are also based on what I’ve read – the most convincing ideas that I’ve found from writers whose work I find credible.

As a consumer of writing, I make decisions based on what I’ve learned from experience and also on the credible advice I’ve read. But I never make decisions based on a single argument – especially when those decisions are big and important.

So here’s my advice on taking my advice:

If you work for a business I own and I give you advice, I expect you to listen to me as if your job depended on it. Because it does. You can choose to do something other than that which I recommend – but if you do so, I expect you’ll let me know in advance and give me a fair explanation.

Otherwise, I expect my advice to be treated like… well, like advice: one person’s idea of what to do in one particular situation. I definitely don’t expect it to be the final word.

I know people that get angry when the advice they give is not heeded. “Why do I bother?” they say. “You don’t listen to me!”

That’s not the way I feel. As I said in the beginning, yes, I want you to listen to my advice. But I want you to then compare it to other advice and (most importantly) to your own gut feeling that comes from your experience. And then make up your own mind.

If  I thought that everyone that listened to me would always do exactly what I recommend, slavishly, I’d give no advice at all!

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