WealthEsteem.org :: Psychology of the Deal

One of the hardest things about this blog is that the succession wars are depressing. After a few hours of working on the company, I then get to deal with the latest salvo from my father. This takes the form of contact with staff, family, lawyers or accountants.

So far he’s told his skewed view to my sister, his siblings, and his mother. My sister didn’t buy it, but it’s surprising how persuasive his family find it . Now I understand how and why my mother was shunned by his family. I have shakey moments where I feel down.

Anyway that is all background to my feeling of two steps forward, one step backward. My best way to deal with depression is to become accountable to someone else. This blog is one form of accountability. I also do a daily call with my accountant acting as business coach.

I have some notes on recent events that I’ll incorporate into some other posts, but I’ll enter them in correct chronological order. So some of those entries will show up before this one.

Peter FitzSimons in Saturday’s Sydney Morning Herald had this great quote:

“While it’s important to have balance in your life, it takes a certain obsessiveness to be outstanding.” Former Hockeyroo coach Ric Charlesworth in the latest issue of Inside Sport. And this, dear friends, is the key problem with modern sport.

I won’t comment on modern sport, but Ric Charlesworth’s comment is not limited to sport. Outstanding results come from two directions: 1) Pure dumb luck, and 2) perseverance.

Without Ric’s certain obsession, setbacks become insurmountable obstacles. What keeps investors going after their first few offers are rejected? How do you cope with any stuborn ignorance and negativity from friends, acquaintances and family members?

Notice he said certain obsession. I’m not talking about the sort of blind obsession that makes compelling drama in film and TV. Rather it shows up in our discussions and even our web-surfing .

I do believe in life balance over a period of time. There is a season to sow and a season to reap. That doesn’t mean you reap and sow every day. Outstanding people are willing to make sacrifices today to have what the unwilling don’t have.

With damn hard WORK (not JOB) how to go from 0 to 5 investment properties.

Assumptions

1. it wont happen fast unless you’re lucky – in which case you didn’t need to follow any plan.
2. You will work harder than anybody with a job to get the same initial results.
3. I’d guess it will take about 7-14 years
4. Getting and keeping a job would be easier (but may leave you broke). How many stories have you read that said “bought my first Investment Property then waited X years before I thought of doing it again because work got in the way”
5. We want this to be legal

So here is the list:

1. Start earning cash now. That probably means learning how to sell something, anything, anywhere.
   1. self-employment sections of the papers
   2. market stalls
   3. Walk around industrial areas with your eyes open. Has someone got an overstock problem? Ask for a sample and a price. Hit the road.
   4. Ask yourself how can I get something to sell on consignment?
2. Start small but scale quickly. Turn $5 into $10. Then $20 then $40 then $80 etc.
3. Learn to fix problems. Look for people with a problem and find a way to make that problem go away. That lets you set your own price that is not tied to time or personal effort.
4. Focus on cashflow. In the early days do not build a system to sell it. How much am I making per week/month (forget year). e.g. Some retailers break even on trading but make money by selling the business, others make money from day 1 — guess who normally wins in the long run?
5. Put 5%-20% (say 10%) away for wealth creation. That way you’ll know when you have enough to buy an accumulating asset. That % may be of gross sales or net profit whatever! But put it away out of every deal/week/invoice.
6. Network. Now. Go out and meet people. Not just your friends. Talk to business people, sales-reps, seminar-junkies, hairdressers, baristas and bar-tenders. Find a 2 sentence intro and ask them questions about themselves. If you can afford internet access you can afford to do a google search on how to network.
7. Optional. Find a deal that is too good to pass up and the money will appear. This is a fact
8. Buy an asset (with your own money) that is 80% right as soon as you see it. You won’t find anything perfect and the time you waste getting 95% perfect will cost you 2 deals. The learning experience is worth the mistakes. Remember you created the deposit and you can do it again if you make a mistake.
9. Did you know that if you had a 34% deposit the money is relatively easy to find?
10. Once you have an investment system that works for you, leverage it with investors. Realise almost no investor will back your first deal.