Common sense perspectives and finding a way to retire

Archive for the ‘finances’ Category

The Illusion of Knowledge

Posted by Paul on January 8, 2007

“The greatest obstacle to discovery is not ignorance, it is the illusion of knowledge”
Daniel Boorstin, 1984 Librarian of Congress

I am a naturally skeptical person (probably why I am an engineer) and I tend to analyse everything to death before I make a decision. But unlike many people I try to analyse things impartially and do not depend on opinions of the uneducated to form my ideas. Nearly everyone has opinions that are mis-informed about everything whether it is health, sex, marriage, money, business, network marketing, real estate and especially science (its really sad to me how poorly educated we are about science in the US since many of the political decisions of the day are being made based on poor scientific knowldege).

Global Warming is my personal scientific pet peeve. We have less than 100 years of fairly good scientific data on temperatures, yet we try to extrapolate that data over the life of the planet and think we can predict some disaster. Understanding normal variation is not something people seem able to grasp. Every weather event is treated like a unique event. This only demonstrates to me a foolish lack of perspective!

Getting good data is also of paramont importance when evaluating a new business as well. Now when you are investing $1,000,000 into a business you probably will do some due diligence. However, for businesses like Network Marketing with low entry costs, nearly no one does due diligence. So I found that people asked their “expert” friends about the business and they got information on how prices are too high or the market is saturated or whatever. When I got involved in the Amway business I did not ask one unsuccessful person what they thought of it. I investigated the pricing structure, the quality of the products, the payouts, the franchise “system”, and interviewed people that had made the business work.

Likewise, in the real estate business, I’ve investigated lots of different systems, bought several and evaluated how they work. I only like to talk to successful people about what works. I like real knowledge, not theoretical knowledge about what might work.

Know that doesn’t mean I won’t listen to people that have failed at something. Certainly they can provide valuable insights. However, most people really didn’t fail because they really didn’t try. So 99.9% of their opinions are worthless.

Meanwhile thousands of people listen to Barbara Streisand rant about global warming while flying around in her private jet ruining the atmosphere.


Posted in business, finances, investments, money, Network Marketing, real estate, science | 1 Comment »

Recovering Financially from a Divorce

Posted by Paul on January 5, 2007

I went through a divorce which started in 2003 and last about 18 months before the final decree was issued. It was the most financially stressful period of my life. I lost about 25 lbs (good for some people, but my weight was down to 125 at one point). Me ex did not work and so all the financial burden was on me. During one 3 month period a Judge ordered me to pay all of my take-home pay to my ex. I literally had to beg for money from my relatives in order to eat.

Legal fees were atrocious. I paid over $20K to my lawyers (I fired the first one after he failed to get me weekend visits with my kids) and after the divorce was finished the Judge came back and ordered me to pay nearly $10 to my ex’s attorney. I had to assume responsibility for all of our mutual non-secured debts and at one point had over $70K in unsecured debt. On the plus side, my attorney negotiated a good financial settlement. I got the tax exemptions for the 3 kids, most of my 401k and a 85% of payments to my ex are counted as alimony rather than child support (good for tax deductions). I still own half of our house which will be sold when my youngest graduates from high school.

You may feel I screwed my ex, but she is not suffering either. She does have to work now and is quite capable (she has a BS in Engineering but doesn’t use it). She also receives about $35K a year from me and still lives in a 3100 sq ft home and drives the newer car.

Now many people going through divorce take years to recover. I first participated in, than latter led a DivorceCare group at my church for a couple of years. It was an eye-opening experience. It certainly helped me get through the divorce emotionally and spiritually much faster than most people might. However, I did see many people struggling financially for many years after their divorce.

My assessment of their financial situation was that it was largely self-imposed despite their constant complaints about the lack of support from their ex’s. Most lived in homes or apartments that they could not afford or would go out and buy new cars or new clothing. They had no plan on how to recover financially or improve their lives – just anger at their situation or depression. They did little or nothing to change their financial situation, beyond trying to work more hours at a low paying job.

Now, I wouldn’t be honest if I didn’t say that there were times I felt overwhelmed financially, but I never felt hopeless. Instead I developed a plan that has propelled me back to a better financial situation then I was in before. Here’s what I did:

  1. I moved to the cheapest apartment I could find and scavenged furniture.
  2. I liquidated every penny I could and put all my energy into paying off unsecured debt
  3. I tried to move as much of my debt to zero or low interest rate loans
  4. I drove an old car
  5. I never ate out – I cooked everything myself from scratch whether alone or when my 3 kids visited
  6. Once my debt was down to manageable levels, I bought a real estate course and started searching for a distressed seller
  7. I used a loan from my 401k to buy a house that I found at $33K less than market value – so “nothing down”. The payments were slightly higher than my rent but offset by the interest and property tax deductions on my income tax turned this into a wash
  8. I used the “instant equity” I had created from my house purchase to get a HELOC loan and found a second house at far below market value from another distressed seller. We spent $16K fixing it up in our spare time and created more net worth
  9. This year we are focused in expanding our real estate investments and expect to create another $50-$80K in net worth.

Has it been hard? yes! Has it been a lot of work? yes! Did I have time? No! I’m now married with 4 teenagers. I still attend almost all of their after school sports meets and other school activities. I spend time with them helping with homework. But I don’t watch TV or waste time on non-essential activity. I still don’t spend money on non-essentials (my only purchase has been a new bed when I re-married). Now I have to give credit to my new wife as well. She has supported every decision and worked along side me while we rehabbed our rental property. Her love and support have been essential to my financial recovery.

Can you do what I did? Sure. Will most people? No. I learned while in Amway that most people would rather complain then act. God created an abundant Universe and I believe we have the right and maybe even obligation to take advantage of that.

Posted in finances, money, personal | 1 Comment »

Update to NetWorth IQ

Posted by Paul on January 4, 2007

 I’ve updated my financial information for year-end 2006 on the site NetworthIQ. Last year was a pretty good year after the setback of my divorce – my net worth is up 59%. My 401k was up 12.7% and real estate equity was up due to the purchase and rehab of a property (There’s not much appreciation in the Buffalo area-3.5%).

My major financial failure was my inability to fund my 401k enough to get the complete company match. My cash flow has been very marginal the last 3 years and even though I inched up my contributions during the year I only averaged 3.7% Vs my goal of 6%.

Credit card wise, I did increase my debt but all nearly all was for real estate investment.

Compared to others in my education or income level I am doing better than the average on that web site. Compared to others my age I still need lots of work to catch up. But I’m optimistic with the start of my real estate venture that I will do as well or better in 2007.


Posted in finances, money | 1 Comment »

Buying a car – new or old?

Posted by Paul on December 31, 2006

I’m not sure why there is ever a discussion on this topic. I’ve run through the calculations many times and there is never any way that a new car can be financially justified. One of the more important ways people get into financial trouble is buying depreciating assets. A car is the largest depreciating asset that most people buy. The worst financial decision is to buy a depreciating asset with credit.

Now some very smart people will try to convince you otherwise. A young man named Ramit who writes a blog called Iwillteachyoutoberich does just that. He tries to justify his decision with various reasons but in the end gives himself away when he talks about the “new car smell”. This means in the end he made an emotional decision, not a financial decision. (The ironic thing is that “new car smell” is a mix of VOC’s including benzene which can be harmful.) New cars depreciate quite rapidly – often 30% right off the lot. Add to that the interest nearly every purchaser pays and the cost of owning that car can double.

Now some people claim that they need a new car for business credibility. I don’t buy that logic either. Confidence comes from within – not from external things. Now when I was young I too feel prey to the idea that I needed a shiny red RX-7 to impress the women. Fortunately, I’ve grown out of that phase although many middle aged men think they suddenly have to buy a new Vette for the same reason. My car strategy at the moment is to buy cars with good repair records that are 5-7 years old which I can pay all cash for. Typically my cars have close to 100,000 miles on them (cars today when maintained will easily go over 200,000 miles – everyone of my 12 cars has.) I keep them well maintained so they don’t break down unexpectedly. My typical maintenance costs are less than $1500 a year including routine maintenance.

Let’s assume you buy a new car for $25,000 with $3000 down and I buy a $3000 car cash. Now I don’t carry collision or theft and carry a $1000 deductible – you’ll have to carry collision and theft insurance. Here’s a simple spreadsheet:

After 3 years the typical new car buyer is upside down in their car loan so there is no re-sale value per se. The new car buyer is out an extra $14K Vs my strategy.

I have grown tired of buying cars from dealerships. Even with the advent of kbb and other services, the dealers want to play a game of giving me far less than my car is worth and asking over kbb average retail values. Instead, the last 3 cars I have bought have all been on E-bay. I research the cars and history and only bid when I can get close to the wholesale value. So far this strategy has worked extremely well and I have no plans to change it. Even a sudden windfall would not tempt me.

Posted in finances, money | 2 Comments »

The Courage to Be Rich

Posted by Paul on December 21, 2006

I was reading an article titled The Courage to Live Consciously by Steve Pavlina and was reminded (again) of the root reason for my current financial state -living too much in my fears.

How would I live if I had no fear at all? Have you ever asked yourself that question? When I was involved with Amway I often asked myself this, but had long forgotten about the question or my answer. Recalling back to the days I used to travel long distances to show the Amway business plan to prospects, I often would be driving home late at night listening to self-improvement tapes and sometimes would catch a glimpse of this awesome lifestyle that I could lead should I succeed – great friends, financial security, wonderful family and spiritually connected. But by the next day, trying to do my job with only 4 hours sleep, I slipped back into negative thoughts about why I would not succeed (fatigue can kill dreams).

Now I’m not totally a wuss. In some areas of my life I have a lot of courage. I relish heights and have no fear of dropping off the side of a mountain, I’ve had 20′ boa constrictors crawl over my back. I love speaking in front of large crowds (I’ve given speeches before 10,000 people) and I have never had a fear of investing money. I don’t really have a fear of failure, but I do have a fear of success. And I have had a very real fear of being rejected by other people in one-on-one situations.

Life shrinks or expands in proportion to one’s courage”.

Anais Nin

The word courage is derived from the Latin “cor” which means heart. Steve Pavlina seems to think that courage is more about mental decisions. However, for battlefield decisions the Marine that falls on a grenade is not making an intellectual decision, but a very real emotional one. He (Steve) thinks that our decisions are not “fight or flight” based because the real danger to most of us is mostly in our mind – not life or death decisions our ancestors (or today’s soldiers) faced.

Steve lists lots of practical advice to overcoming your fears (making list of possible negative aspects of you decision, breaking them down and setting goals to overcome them, becoming more educated, etc.). Maybe this helps some people, but I have tried this logic with only limited success.

So how do I gain the courage to be rich? My only good analogy is when I am at the top of a very steep ski slope and can’t see the trail past the edge of my skis. I simply push forward over the edge and trust in my ability, God and my instincts that I will make it down the slope. I am totally immersed in the moment, not worrying about falling, breaking a leg or anything negative.

I think that business success will take a similar route. When I was in Amway I was 99% committed to my success. I invested heavily in tools, seminars, travel. I would drive anywhere to show the plan to people, but I withheld myself in one critical area out of my comfort zone – I wouldn’t drop off that cliff when I was in the presence of a stranger. I have a colleague I work with who I admire greatly for that quality. For him everyone is a friend whether a CEO or the girl at the drive-through window. In seconds this man establishes rapport with strangers, a trait I envy.

So is becoming rich just about courage? To a large degree it is and a very emotional decision. It is about putting yourself on the line, about immersing yourself 100% into what you are going to achieve and blowing up the bridges that would allow you to retreat. That retreat has for me been too easy ( I make a six figure income at a job). But my job will never allow me to get rich.

“Successful people expect the best, and they generally get it, because
expectations have a way of attracting to us their material equivalent,”

Tom Butler-Bowdon

When I started in real estate the first time 20 years ago, I didn’t have a plan, wasn’t organized and invested based on poor information. But I also failed to commit myself 100% to making it work, so I retreated to my job and let it bail me out. This time I am better organized, have good market data, have a planned exit strategy, know what I want to buy and am not letting emotion drive my purchase or selling decisions. But I still have the opportunity to give up – I’ve got 4 teenagers to care for with associated activities, a wife who wants my time and still have that 8 hours every day to exchange with my employer. I don’t have time to do this ( I could reason).

I’m 53 and I have no hope of retiring before my late sixties based on my financial position. I had not planned to be in this position, but that’s because I never did stick with a plan to do it. So its going to take relentless persistence to succeed. And ultimately, the courage to push myself over the edge.

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Using scarcity consciousness for gain

Posted by Paul on December 19, 2006

I’ve been posting about prosperity Vs scarcity consciousness here and here. Today a blog post popped up on my GoogleReader which seemed to prove the point by Derek Pierce.

He talks about using a “take-away” technique during negotiations. If the person he is trying to negotiate with starts to waffle he “takes back” something he had previously given. Here’s his explanation”

“The takeaway method works like gangbusters. But, you may ask why?
Well, it’s proven that we all are motivated by scarcity. In other words, if
there is a product or service that is freely available, then the desire for that
product or service is not that great. However, if there is a limit or some
deadline to that product or service, then it will increase your desire to have
the product or service. That’s why you see so many deadlines with

When I was involved with Amway, this is one of the common techniques also taught. If a prospect wasn’t sure that they wanted to join your business, you simply told them you were not sure if you could work with them, that your business was very successful and your time was limited you tried to give them something to lose.

In some respects, its sad that you can take advantage of people’s scarcity consciousness with such ease, but my experience in Amway convinced me that it is far easier to work with their existing mentality than to change it. Sometimes I spent hours with people trying to convince them that they could have more money, make their dreams come true, help their family and nothing would register. But the fear of loss motivated them time and time again.

One of the wage roll employees that I work with is forever complaining about his situation in life – he honestly believes that he is no better off (he makes $25/hr) than his father who was also a factory worker. I think this is quite an irrational perspective. Just consider the following:

  • health care has advanced tremendously. Survival rates from heart attacks and cancer have increased dramatically. This employee recently had a heart attack. Perhaps in 1965 he might not have survived
  • automobiles today last longer, run more efficiently, require less maintenance and are safer than ever
  • electronics are prolific and cheap – you can buy an HDTV and receive hundreds of channels (and the cost will be a lower portion of your paycheck than it was in 1965). Cell phones, DVD players, ipods and computers didn’t even exist back then
  • we spend a lower percentage of our income today on essentials like food and clothing than we did then leaving more disposable income for eating out (consider the proliferation of restaurants

Now I don’t think I can ever convince this fellow employee that he is living a prosperous life. So are people hopeless? No, I think that most people have hope, but few have belief and even fewer believe that they can have real prosperity.

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Is it holier to be poor?

Posted by Paul on December 18, 2006

A retired gentlemen that clips coupons made a strongly worded criticism of a post  I made the other day:

“It seems that you and a good majority of the world measure success by monetary value. Those that die with the most toys win”

He thought it more important to “help others” by serving food rather than working to generate wealth. Is he right? Are only poor people who “help others” assured of a blessing in the afterlife?

There have been several ministers that I have heard speak in the past 20 years or so who would disagree with that idea. – such as Norman Vincent Peale (The Power of Positive Thinking) and Robert Schuler (Move Ahead with Possibility Thinking). Another excellent book I have read that disputes that idea is Paul Zane Pilzers God Wants You to be Rich.

There are many Christians who point to the Biblical admonition

“It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the Kingdom of God”

and think it is holier to live a life without money. Few pay attention to the parable of the talents.
The most insightful part of this parable is the most severe condemnation that Jesus gives to the servant that did nothing with his talents:

“And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.”

Jesus also says something about those that create more money with what they are given

“For everyone who has will be given more, and he will have an abundance.”

This passage tells me two things

  1. God’s given you something and you better do something with what he gave you
  2. If you do something he will bless you with abundance

when I was involved with Amway in Network Marketing business I showed the business plan to hundred’s of people. Many had been blessed with much in the way of gifts that would have made them very successful in Network Marketing. But, for one reason or another they declined the opportunity or started with great enthusiasm only to quit after a few days or weeks. I believe they were gripped by a scarcity mentality that didn’t allow them to believe they could get rich.

Now my critic may have thought I was attacking him for clipping coupons. I was not, as I shop for good deals and don’t believe there is anything wrong with being a good steward of your money. The point of my post was that people driven by scarcity mentality tend to focus on what they don’t’ have which leads to jealousy. Now, don’t get me wrong – I am no saint (I’m sure I’ve broken every one of the Ten Commandments). Just as being too focused on getting money at the expense of others can lead to sin, so can being focused on scarcity.

We are all given different abilities to produce something in this world. Someone with disabilities certainly may think that they have fewer opportunities to others but there are countless examples of those who have overcome every form of disability to do something astounding in the world.

While most people think that the world is a zero-sum game, this is an illusion. As Pilzer correctly writes – “any increase in wealth of an individual, always results in an even greater increase in wealth for society“.

God created the world with abundance, more than any of us can comprehend. God created each of us with abundant talents and has given us abundant opportunities to use those talents. Most of us have declined the opportunity (I plead guilty!), and we are left with a coupon clipping mentality. Now if you are putting the savings from your coupon clipping to good use for investments or business opportunities or charities, I’m sure you are using your money wisely.

I don’t believe that those pursuing a life of poverty through scarcity consciousness have the corner on holiness, nor do I believe that those who pursue money just for the purpose of having more things are in the right either.

What I do believe is that God created a world that the more successful I am, the more wealth there is for everybody. By working and creating and sharing we make a better place for all.

My perspective is that God was the Creator and he created us in his image – so we were made to create. That is our role.

Posted in finances, money, Network Marketing, religion | Leave a Comment »

Prosperity Consciousness

Posted by Paul on December 16, 2006

One of my favorite topics to think about is the concept of prosperity consciousness. It sometimes seems that most of the world is gripped in a scarcity mentality despite overwhelming evidence to the contrary. Sometimes people blame wars on religions or mad dictators but, in fact, it probably is most likely due to the prevalence of a scarcity mentality.

I wrote earlier about my favorite economic book Unlimited Wealth by Paul Zane Pilzer. It’s not difficult reading as you might expect from an economist, but rather entertaining. Pilzer traces the root of the scarcity mentality to the basic premise on which economics has been based – economics is the study of the limited supply of the worlds resources. If that premise is correct then it makes sense to fight over raw materials (gold, oil, etc.)

But what if resources are not scarce? What if in fact we have reached a point in our history that we can control, through technology, the supply of resources. What if, like the ancient alchemists, we can literally turn base metals into gold. In fact, today we can in essence do just that for most of our needs and the rate of technological advance is so rapid that I don’t believe we will ever run out of anything we need.

Pilzer reminds us of how in 1973 leading scientist predicted that we would run out of oil by the 1990’s, yet by 1990 there was such a surplus of oil that prices were at a historic low. What happened to cause that? Technologies like fuel injectors doubled fuel economy in cars and essentially doubled oil supply. New technologies allowed us to recover more oil from existing wells and dig deeper wells to find more oil. In fact, technology advanced so fast as a result of new R&D (money invested by the profits of the 1980’s high prices), that it surpassed our ability to consume the oil and keep the price up.

In college, I worked on a co-op job for a large copper & coal mining company in R&D. One of my projects was transforming coal into oil products. It wasn’t too hard to do, but it’s not cost effective yet. There are more BTU’s of coal, tar sands, and oil sands in the ground than oil. Once companies can get a decent return on investment. I also worked on a software program which simulated mining precious metals from the ocean bottom. I remember being overwhelmed by how large a source of gold, copper, platinum, etc. existed on the ocean bottom. I don’t believe we’ll ever be able to use all of this material. This has given me a perspective that resources in fact are not scare, but quite abundant.

One of the most intriguing examples of modern alchemy is the conversion of the most common of elements, silica (think of sand) into computer chips. This is about as literal example as can be made of converting a base material to gold. Food is another example. In the 1968 Paul Erlich published the Population Bomb – predicting widespread famine in 10 years (the world’s population was only 3.6 billion in 1968). Today with a world population over 6 billion we have to pay farmers not to farm and most countries export food (even China!). The company I work for is constantly creating genetically modified crops that are increasing farm yields exponentially. We will never run out of food!!

So what does this have to do with a prosperity consciousness? Well, when we live our lives out of scarcity we miss opportunities. I see so many blogger’s writing about being frugal or clipping coupons or budgeting. I believe that people that live in this consciousness are constantly jealous of others accomplishments and this creates lots of conflict between those who make money and those who want to take money away from those who make money. It drives our politics and promotes disharmony throughout the world. I think the current war against us by the radical Islamist’s is driven by this attitude. It’s hard to focus on generating new income streams when you are focused on penny-pinching or taking someone elses money.

Here’s more thoughts from Pilzer:

  • technology is the major determinate of wealth because it determines the nature and supply of physical resources
  • the advance of technology is determined mainly by our ability to process information
  • the backlog of unimplemented technological advances (technology gap) is the true predictor of economic growth

The first law of business is no longer “find a need and fill it” but “imagine
a need and create it

My sister-in-law is a perfect example of someone who has imagined a need and is using the technology gap to exploit it. She started a business InOutSource.com which caters to attorney’s. Lawyers are technologically very outdated. They keep all their records on paper and pay thousands of dollars per month to store and manage all those papers. My sister-in-laws idea was simply to employ technology to manage this information for the attorney’s using technology. And she is succeeding beyond any one’s dreams (except maybe her own!).

I’ve always hated the scarcity mentality. I hate going to thrift stores, clipping coupons, trying to watch every penny I spend. I’m not jealous of those who succeed, but truly admire them for what they have accomplished and found inspiration to keep going when I haven’t gotten wealthy yet.

I hope someday Pilzer wins a Nobel Prize for his thesis.

Posted in business, finances, money, politics | 3 Comments »

How to get rich

Posted by Paul on December 15, 2006

One question that many people ponder over throughout their lives is the question of how to get rich or least financially independent. The vast majority of us have been schooled in the time-honored wisdom that the best route is to go to a good college and get a good job. Then we spend our lives exploring the stock market or real estate or network marketing or a business or buying lottery tickets or suing someone if all else fails, without really understanding the basic concepts that will realize our dreams.

I’m going to give you the secret (I sound like a salesman here, but I’m not selling anything) and it is so simple, welll….duh!

There are two immutable’s in getting rich:

  1. Leverage
  2. compounding (also known as interest or the time value of money)

If you understand these two concepts and use them positively, I can guarantee that you will be rich. Now most people spend their lives either not using these or using them in reverse. For example:

  • they work at a job (trade their hours for fixed dollars) and spend all that they make
  • they incur bad debt (reverse compounding)
  • they use leverage with extremely high risk/reward ratios (for example, lottery tickets)

Many of us have read stories of poor ministers or spinsters that die and have millions of dollars in their estate – these people lived on meager incomes but used compounding( the time value of money) in their favor to accumulate wealth. In WV I lived across the street from a 92 year old spinster who had several million dollars in AT&T stock. She had purchased some small amounts from her employer when she was working a summer job in high school and 70 years later – voila!

I want to distinguish between bad debt and good debt. My Chinese wife believes that all debt is bad, but I think it is correct to say that investment debt that has a reasonable risk/reward ratio is acceptable (think of your home). Debt incurred to buy that HDTV is bad debt (but damn do I want one 😦 Guess I’ll have to achieve some financial goals first!)

So what is leverage? Basically it is when you use a tool to allow you to be more financially productive. There are many tools that you can use:

  • starting a business and hiring employees to get more work done (good risk/reward)
  • franchising your business (good risk/reward)
  • using the Internet to leverage your efforts (good risk/reward)
  • buying real estate with small down payment (good risk/reward)
  • investing in commodity futures (poor risk/reward)
  • using margin accounts to buy stocks (poor risk/reward)
  • investing in a college education (may be a poor risk if you choose the wrong major!)

What about ways to use the time value of money or compounding to your advantage:

  • saving 10-15% of your income -especially in a IRA or 401k (excellent risk/reward)
  • investing in stocks (could be good or poor risk depending on your diversification)
  • owning a completely paid for piece of real estate (good risk/reward)

I’m not so sure that college is the best use of investment dollars. With a typical education costing $40k/yr, the $160k invested at 9% for 35 years will yield $3,266,000.

So what should you do? Here’s my list:

  • put some money into an emergency fund
  • pay off all bad debt – use a snowball formula
  • accumulate 3 to 6 months of expenses into very liquid savings
  • invest 15% of your earnings into a Roth IRA or 401k (especially if its is matched)
  • buy a house from a motivated seller – don’t make an emotional purchase
  • start a business (our tax laws provide magnificent deductions for businesses not employees)
  • systematize your business (see E-Myth Revisted) so it doesn’t run you
  • invest in real estate

And stop buying lottery tickets! That’s my perspective.

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Maybe not luck at all

Posted by Paul on December 12, 2006

In the book Tales of Power by Don Juan he says “The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything as a blessing or a curse”.

Steve Pavlina tackles this issue in a post on the Shrug Effect. His point is similar to Don Juan in that the average person is quick to dismiss the success of high profile people to the breaks they had in their life rather than be responsible for their own breaks. Spiritual people tend to count their blessings, secular people just look at their bad luck, but neither group tends to see everything as a challenge.

Now I can’t dismiss the possibility of luck. Certainly it was bad luck to be on one of the planes hijacked on 9/11. But I’ll wager that vast the majority of our life is governed by decisions we make from minute to minute. I’ve talked previously about luck and was hoping for some better luck in my new real estate ventures.

I think the cumulative effect of decisions we make from an early age often determine part of our personality, what kind of relationships we develop in life, our career choice and financial success. When I was in high school I would occasionally go to a school dance. But I wouldn’t dance. It was too far outside my comfort zone to ask a girl to dance. There were other young boys that were less attractive than me, had worse personalities but didn’t have the fear to take a chance. They learned from trial and error what the girls liked – often developing humor as a way to attract a girl.

Looking back to my college years I can see clearly that the people that succeed financially were not necessarily the ones with the best grades. It was often the ones who had the largest network of contacts. Was this my bad luck not to make hundreds of friends or a decision not to get outside my comfort zone and make friends. It was easy to study my engineering books and get good grades. That certainly got me a good job offer, but in my company it takes lots of people skills to climb to the highest levels.

The same certainly was true for my experience in Network Marketing with Amway. The people skills that I had failed to develop all my life through my fear of people stopped me from making it. And I still wasn’t willing to get outside my comfort zone – even for the millions of dollars of potential income. As I mentioned in my post on SMART goals, I never believed and wouldn’t try.

I’ve been busy creating a business plan and goals based on The E-Myth Revisited and feel much more confident that I will succeed – not because I’ll have better luck, but because I have made the decision to treat each challenge as an opportunity to get better.

From A Separate Reality

You should know now that a man of knowledge lives by acting, not by thinking about acting, nor by thinking about what he will think when he has finished acting. A man of knowledge choses a path with heart and follows it”

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