WealthEsteem.org :: Psychology of the Deal

MicheleB challenged me to discuss the meaning of life among other things. I look forward to the smugness of owning half a suburb.

Nella and I were talking about buying nice things while the kids are still young enough to enjoy them. “How about a house”, I said. So we went to check out some relatively affordable houses in Sydney.

HA!

I’ll say it again.

HA!

We saw a couple of matchboxes that made our current place look fabulous. Given we are renting for about 2.5% of it’s current value, we decided to look for more investment properties.

So a plan with targets, deadlines and rewards is important for us to keep at it. Nice costs money. We don’t want to spend a lifetime amassing wealth for when we are too old to enjoy it. And I intend to spend a huge pile of my kids inheritance. Without a plan and medium term goals, it is too easy get distracted and let a year go by without progress.

A smart millionaire once told me that it is important to take a part of every successful business deal and buy a memory. Preferrably something you would never spend my own money on. It doesn’t have to be huge or expensive, but it must be something that will remind me of the success. I just realised I’d stopped doing it.

Life is the memories we build up on our journey.

MicheleB made the following comment to an earlier post on Post Navra Rush.

OK then, here’s a question I’d really like your considered opinion on. How does one, how do YOU, balance lifestyle with an ongoing acquisition program?

When you’re young, it’s easy to put the comfy choices on hold when you have a PLAN. In fact, there’s something smug and heroic about living like a refugee while owning half a suburb.

But suddenly you wake up one day and find that you’d better get a decent house pronto because the kids will be leaving home any minute and to continue to live in conditions that would shock a battery hen is no longer an option. OK so we sell something, extend/renovate an IP (because prices are silly and who’d buy in this market right?) and we suddenly have a ‘lifestyle’ YAYAY.

And of course it’s suddenly quite fulfilling to buy and enjoy nice things, an Italian oven, marble tiles, a Persian rug.

So how does one get back that lean machine attitude? And do we have to? Of course we do! We have tasted NICE. And nice costs money.

I see a brand new treadmill in front of me Paul…..and it’s got celestial rays coming off it like a Monty Python vision.

Balance is obviously required here, especially as I’m now too buggered to work as hard as I used to. Passive income sounds better than ever. What’s the answer? I suspect it’s probably the same as it ever was…. a PLAN. Goals, a budget, a nominated slush amount, a reliable income. And a reasonable stab at answering that trickiest of questions….what IS the meaning of life?

Well Paul?

Hehehe I’ll have a stab later this week. But I think it’s a great post on it’s own, so I’m reprinting it here for those who don’t read comments. There are a lot of readers who only check to read the new entries.

There’s a bunfight brewing over at the Somersoft forum about the Navra Cashbond?. If you want to wade through some tedious numbers, knock yourself out. There are even some interesting worked examples by Steve and others.

Let’s ignore the emotion of the debate. As an aside, there are people who love nothing more than debates. The truly wealthy people I’ve met don’t play those games, they’re too busy making deals or friends. Why hang around with debaters?

So I’ll summarise Bill.L’s position as “prove that cashbonds are a good idea in all cases”. Steve has a good swing at doing that, but I see it as a futile exercise. People either get it or they don’t.

Steve says “here is what works for me”. Naysayers respond, “here is why it will never work”. Only one is right, but also, only one can make money. But the point is not that it must work in 100% of cases, only that it works in my or your case. Let the rest of the herd believe it can’t be done.

Avoid jargon as you learn and practice asking your professionals for the outcome you desire. It will make you a fortune.

Instead of asking your accountant to form a discretionary trust, ask instead for a structure that will protect your assets, offer some income, estate and tax planning benefits.

Better yet say “I want to buy investment assets. I will borrow against my home and against the assets. There may be losses from time to time. In ten years I want $2Million in assets and an income before interest of 5% ($100K). How do you recommend I structure this? I hear a hybrid discretionary trust is worth considering, but I’m not the expert.”

I was reminded of an interesting phenomena this weekend at Steve Navra’s course. Many people on hearing a speaker want to deal with this subject matter expert, a.k.a “the boss”.

You don’t need to deal exclusively with the boss. If the boss is any good they have put great staff in place, who are better at the job. Get friendly with the staff, stay friendly with the boss. If you only deal with the boss and they get busy, the service declines.

I use this with lawyers all the time. I know the lawyer and the clerk or associate actually doing the work. Then I can get things done by talking to the most appropriate person. I need to do it more with my accountants.

Nella and I just flew back from Steve Navra’s Optimising Investment Structures course. If you want to get financially independant, are pushed for time, and are less than a genius, then book into one of these before Steve decides he has enough Australian clients and goes off to revolutionise the USA. If you are based in Sydney, click quickly because he really doesn’t need more Sydney clients.

Steve and I have discussed his structures over the years. Being a maverick, I find it hard to follow someone elses strategy too closely. Nella thinks I suffer from Shiny New Idea Syndrome — every new idea is distracting and I lose focus (I ask you what does she know?).

I was content with my wealth creation results over the last 3 years – I have just about enough equity to go looking for another investment property. But my assets haven’t worked at optimal efficiency. Heck they have barely broken a sweat — you naughty, lazy assets. Imagine what I could have achieved with six-monthly reviews and a plan of action with milestones and targets? What about using an Optimised Investment Structure that used every dollar six ways. My wealth creation is now augmented with rigorous discipline courtesy of Navra Financial Services. Oh baby feel the burn.

This testimonial is from the heart. Nothing I have seen or done before has made this much sense. In the past I have kept an eye out for good deals, grabbed them when I could then paused to digest. Those pauses have lasted between one and six months. Then I’d wait until I could either afford another deal or another great deal showed up. This was somewhat ad hoc. The time has come for a machine-like approach to building assets.

Sim’ is shaking up my thinking again. He focused on my A students working for C students quote.

‘A’ students are not renown for thinking outside the box. There is a bias within western education to look for the single right answer. This normally means that A students need someone to grade their work and tell them they are right. Rarely will an A student not care about what the teacher thinks. Entrepreneurs and business initiators tend to be egotistical, megalomaniacs with a unhealthy sense of self-importance (by A student standards).

Sim’ gets better results in subjects he enjoys. No ‘A’ student on the planet allows themselves to have such petty preferences impacting their averages. You either get A’s or nothing. Getting a ‘C’ is not an option. Think about it – you know the type. Smart, hard-working, keen.

Sim’ goes on to answer his own questions by discussing attitude. A students make great research assistants and if they can break out the habit of looking for the quickest right answer, they make good research fellows. Entrepreneurship is a bit harder. It demands a passion for uncertainty or excitement. Those personality types normally don’t graduate head of the class.

I’ll always advocate following a dream over sticking to something you’re good at.

After posting about Steve Navra’s Optimising Investment Structures course earlier, I got home to find a brochure for Anthony Robbin’s Wealth Mastery.

I registered and attended Wealth Mastery in 1998 or 1999. I admire Tony Robbins very much, the man is extremely talented as a motivator, influencer and coach. There was also a good discount for me at the time. Coupled with a money back guarantee, I had nothing to lose by going.

Let me say, I loved it. But… during the first half of the seminar there wasn’t anything I didn’t already know. Sure, I wasn’t applying it all and found that fact very motivating. So I asked for a refund before the appropriate time. That gave me a lesson in self-confidence in asking for what I wanted.

“No, I don’t want to attend another event,” I said, “I’d like a refund. I am not getting what I want.”

“Yes, I do actually understand the content,” I said, “I have a B.Ec. and used to work for a money market trader. I’d like a refund. I am not getting what I want.”

When dealing with a skilled influencer, my only advice is to stick to your message and repeat it.

Many people who go, love Wealth Mastery. I loved it and didn’t finish it. But many people I talk to cannot immediately apply the principles. They spend time networking with other graduates until they reach a comfort level that lets them impliment some of the ideas. I know a few graduates who haven’t made an investment after a few years — they can’t find the right strategy.

This could easy become a post about unnecessary, expensive seminars. But I know graduates who made fortunes after attending. They basically found a strategy that worked for them and stuck to it.

That is the real lesson. Find a strategy that works and stick to it. Continue your education as you gain experience. Revise and refine the strategy as you reap the rewards.

The cost of the seminar is not indicative of it’s value. Spend what it takes to find your strategy.

But it does make Steve Navra’s course at $286 worth a look.

Nella and I are attending Steve Navra’s Optimising Investment Structures course this weekend in Melbourne. A little bird told me this may be the last formal course Steve will run in Melbourne. Nella normally hates going to courses, preferring to put into practice the things she’s learned over the years. We could once have been called course junkies.

Despite that I think Steve’s weekends represent phenomenal value for money. In these days of $3,000 courses, it is inspiring to see a course cost less than our airfares from Sydney. This is basically because Steve is not in the Seminar Business. However our attendance is not determined by price at all.

We’ve been to a couple of Steve’s Q&A’s over the years. Steve makes a dollar work six times and shares the how he manages his own assets. Go check out the articles if you want an overview. However as each person is unique the detail comes from the time spent around a table hashing out examples. This process cannot be done online or in general articles – I’ve tried to explain the Steve Navra principles but once you get beyond the generalisations it quickly becomes specific to the investor. I believe a weekend thinking and discussing my financial strategy will be worth millions over the next 10 years.

Seriously consider what you are doing this month to create wealth in your life.

Nova 96.9, the Sydney radio station, are running a contest called Double Dilema. They give a tricky situation and ask you to SMS your choice, then tune in at 5pm and see if Sydney agrees with what you think. Random prizes are offered to induce participation.

Sydney’s Channel 7 Sunrise program also uses Yes/No phone polls. The peer pressure in this sort of group-think is incredible. I’ve found myself doubting my convictions in response to polls that don’t go my way. Do I really care what 74% of respondents think?

On the other hand, leading the pack is dangerous in the stock market (and potentially also in real estate markets). Anybody still think Telstra 2 was cheap? The trend is your friend.

My motto is “don’t be a schmuck!” The madding crowd have no clue — so don’t follow them. But keep aware that a stampeding mob can kill you if you stand in their way.