Posts Tagged ‘ business ’

“You Just Gotta Get That Nugget…”

I have made a habit of asking my students, “What do you plan to do to become wealthy?”  


The inner loop is the Rat Race; the outer border is where the rich people play.

I usually get blank stares, especially from the new ones.  They’re thinking, “Uhhh….I thought being an aircraft mechanic would do it, that’s why I’m here.”  I can see it on their faces, they’ve never been told anything else before.  I usually follow up by telling them that while they’ll make a decent living as an aircraft mechanic, no, they won’t become rich by doing it.  The main thrust is to jar their attention into what I tell them next, which is about Robert Kiyosaki’s book, “Rich Dad, Poor Dad.”  (Click the link to get to the book.)  They’re usually all ears at that point.

I read this book first about five years ago, and I about fell off the couch.  I was sitting around wondering what rich people do that I don’t (because it was obvious my career wasn’t paying me like I’d hoped), and this book gave me the answer:  I keep buying crap!

Enter Robert Kiyosaki’s brainchild, “Cashflow 101.”  Cashflow 101 is a board game, and it ain’t cheap.  I asked for it for Christmas, and my siblings chided me for being weird.  (I don’t suppose I blame them, given our backgrounds.)  What’s so great about a $100 board game, you might ask?  The answer is that it goes miles to teach you first-hand how rich people think of money, and it does this by literally forcing you manage a profit-and-loss statement as you play the game.  A prime example is your home:  You probably think that your home (if you own it) is an asset to you, right?  Well, according to rich people, your home is a liability because it costs you money each month.  The only point in time where you can view it as an asset is when it sells for more than you paid for it.  Which, as we’ve seen over the past five years in particular, is not always the case.  You notice this fact when, each month on your statement, you lose money by paying bills on the home.  

Additionally, instead of buying businesses, stocks, or real estate for investment purposes, we tend to spend our money on “Doodads,” or effectively, crap we don’t need.  Extra stuff.  A night at the movies.  A trip to Hawaii.  iPads, cell phones, and other electronics.  

The point of the game is to illustrate to us why we are so averse to doing things with our money that will compound our money for us, and instead stick to the safe act of buying Doodads (crap) each month.  The fact is, when I played this game for the first time, I happened to be alone (I was so excited to play it, I couldn’t wait for Alli to come home to Tucson from Chicago at the time).  It took me — no joke — three hours to “Get out of the rat race.”  And I had no opponent.  The reason is because I was always taught to “be safe” with my money, which basically means “Pay all your bills, blow a little of what’s left on extras.”  Guess what: Playing that way only left me in the Rat Race hour after hour, making no progress at all.  The key is to eventually learn that you need to do something different.

How like life, right?  That’s what we are faced with in this country, and it doesn’t have to be that way.  The way to get out of the Rat Race is to find a way to get that first little nugget of cash that you can invest in something bigger:  A duplex to rent out, a small business (like a carwash or self-storage unit) to manage, or figure out a way to get some cash from the stock market or a home sale.  Then, take that nugget, and scale it up.  Eventually, you’ll have more passive income (read: cash you didn’t lift a finger for) than bills.  Read that again:  Eventually you will have more money coming in than bills going out.  Pretty decent, right?

Trust me, I’ve had this game for a few years now, and it’s worth every penny.   And, if you can’t afford it just yet, you can either find someone who owns it, or find a Meetup Group in your area which plays it — they are all over the place, in nearly every city.  You need to find a way to play this game.  Multiple times.  It will turn every get-your-degree, climb-the-corporate-ladder idea we’ve ever been taught on its head…and that’s a good thing.

(By the way, I’m not a paid shill or anything for the book or the game; they have literally transformed the way I view my finances and my long-term plan, and I wanted you to know about it.)

Do you have this game?  Do you have thoughts on this book?  Let me know when you’ll be in the DC area, and you’re welcome by our place for a couple of bottles of wine, a cigar, and Cashflow 101.  (Click the link for an overview of the game.  You’ll be glad you did.)


Homebuyer Blues: How To Avoid A Terrible Realtor Experience



About a month ago, my wife called me up while she was at work asking me for some business cards and contact info.  A coworker of hers, Jenny* (*all names are changed), wanted to pass my information along to another person in the office because she heard them mention that they would be looking into buying a home soon.  (In the Interest of full disclosure, Jenny and her husband Jim* have been friends of ours for a few years now.)  Geesh–it’s like the Six Degrees Of Kevin Bacon over here!  “So, how’d you meet Jeff?”  “Well, it’s kind of a weird thing…”  Heh.

Flattered as I was, Jenny later told me when we next met that she and Jim had a really terrible experience with their Realtor, and since she couldn’t refer theirs, she wanted to refer me instead.  Always wanting to learn and grow in this business, I asked her why their realtor hadn’t been up to snuff.  These are hard-won lessons sometimes, and I wanted to make sure I was providing the level of service that was opposite of what their guy had been.

“Oh man,” she said, “he didn’t listen to us at all.  It was like we were taking up his time when we had questions, or any time we weren’t out looking at homes.”

Jim chimed in, “He kept taking us to places that were either out of our price range by sixty or eighty grand or dumps that were way under, the places we did like were already under contract when we got there, and it seemed like he could care less about us.  I almost punched him once, I was so angry at him.”

Woah.  At first I thought, “This guy really makes us look bad,” but that was quickly followed by, “This guy makes my job really easy!”  

As we’ve covered before, it’s generally in your best interest to hire a Realtor, but there is an easy way to avoid service like this.  Choosing a Realtor like me is not as roll-of-the-dice as you would expect, where you have to just hope you’ll “get a good one”…it really comes down to three simple things:

First, when you are getting into the process, I want you to treat your Realtor as someone whom you are hiring.  The truth is, you are hiring them as an independent contractor for their services.  Find someone who wants to earn your business, not the commission.  Interview at least three — preferably five — before making your final decision.

ImageSecond, make sure the Realtor you pick is either independently experienced, or backed by a mentor or support team if new.  That’s what I did.  I want to give every one of my clients the most stress-free experience possible.  Being new in the industry, I knew that couldn’t happen until I had a couple of transactions under my belt, but I wasn’t willing to let my first few clients be guinea pigs.  I hired a mentor to help me handle the things I didn’t know or wasn’t prepared for, and it has served me all the better for it.

And finally, pick someone you like.  Pick someone you get good vibes from during the consultation.  Everybody’s personality is different.  It is entirely possible, for example, that two Realtors are equally likable and equally qualified, but their personalities and approaches are different.  One agent might be trying to give you the speediest transaction for the least (or most, if he’s a listing agent) amount of money, and has a plan to do so.  The other agent might spend more time learning the story of how your oldest dog (three dogs ago) lost its hind legs, and that’s how you came to have Fluffy III.  If your personality lends itself to wanting a more intimate Realtor/client relationship, choose number two.  If you are someone who is more focused on wanting results, number one is your best bet.

As a short fourth point, I’ll mention that you can always choose to fire your Realtor if he or she is not performing.  I’ll cover the ins and outs of this in a later post, but just keep in mind that no part of your relationship with this person is forever, unless you want it to be.

I hope this helps ease your mind.  Have a great weekend, and Happy Home Hunting! 


Not Even Two Months Of Inventory!

I was sniffing through the latest real estate data for our area out here in Northern Virginia, and I saw something that shocked me, even as a rookie agent.

Inventory Right Now–Under TWO MONTHS!

In real estate, we have what’s called “inventory.”  We measure inventory in “months”–as in, if no new homes were listed on the market beginning right now, how long would would it take to sell them all?  Six months’ inventory means just that–it would take six months to sell all of the homes.  (Six months, by the way, is generally known as a “balanced market”–if the number rises or falls too far from six months, the market will become tremendously out of whack.)  It’s basically supply vs. demand;  three or five years ago, when this area had 14 months’ worth of inventory, there were too many homes for the amount of people there were to buy them.  Back then, it was a “buyer’s market,” which means that buyers were able to get closing costs (and plenty of other things) paid by sellers, who were practically begging someone to take their property off their hands for them.If you click on the link above, scroll down to the second-to-last graph, labeled “Inventory vs. Closed Sales.”  You’ll notice on the right side that the graph shows that we have just under two months of inventory in Fairfax County.  Inventory here is almost three times smaller than it should be in a balanced market, making the market very decisively in the seller’s favor (or, a “seller’s market”).  We (real estate agents) are seeing more and more commonly very-well-equipped properties which are priced well staying on the market for three or five days, and selling under five or eight competing offers.  It’s very competitive right now to find great homes for your clients.

If you happen to find yourself looking to buy a home in a market as intensely comeptitive as this one has become, here are some tried-and-true tips to win against everyone else.  And if you are looking within the Washington, DC area, you need to get me on the horn as soon as possible, so I can help you find a house that feels like home when you first open the front door.  (I know, I know, and I’m sorry…I’m working on trying to find a picture of my mug that will fit there…but in the meantime, feel free to browse the area’s inventory at your leisure!)

I’m glad that I was able to find a great place for my clients (we are under contract and working toward a mid-March close date), and I understand now why we were out-competed in the first three properties they wanted to buy!  Lesson=Learned!

Shameless PluggityPlugPlug

Hey all!  I hope you are having a wonderful day.  This post is steered toward anyone in the Northern Virginia area who is looking for financing.  I realize this excludes several of you who get my posts in your email box, so if you aren’t interested, feel free to click “delete.”  I won’t be hurt by it, I promise.  I’ll talk with all of yous again soon! (And no, I haven’t taken to making this blog about shilling for everyone.  It’s just that my business goes because of certain folks, and I want to promote how much help they’ve been to me!)

Sean Johnson, First Home Mortgage

If you’re still here, you may be interested in the person I have staked my business on.  As you know, personal references are gold, since someone has effectively done the legwork for you already.  (You may remember a little post I wrote at the beginning of this year about why you should clean up your Facebook pages, and polish you LinkedIn profile to nice, clean shine…well, the same concept applies!)  It is on your behalf that I have done that legwork.  (Thanks!)Hey, no problem!

Before I began suggesting to my clients that Sean Johnson is the guy to go to, I wanted to see what he was all about, just like any other person would.  He sent me this link as a sample of the way that he communicates with clients and agents alike regarding financing possibilities, and it is very simply the best way to bridge the initial discomfort (from my clients’ standpoint) of meeting someone new.  (Megan and Dave’s names are changed.)  They can hear him speak, listen to what he has to say, and decide accordingly if he is the type of person who is their speed.

I know Sean personally, and he is someone who is easy to get along with professionally as well as personally.  I think he is a quick witted, easy-to-talk-to guy who will find the best possible financing scenario for you. He’ll even show you how sometimes it makes more sense to put 5% down as your initial investment than a full 10-20%.  He wants to keep your money in your pocket, where it belongs.  I get emails at least four weekends per month (yep, that’s right) from him letting me know that he’s available during the weekend, in the event that my clients want to make an offer and weigh the numbers.

And he isn’t lying.  I try to avoid overrunning his weekend with business functions, so I choose emails for not-so-time-critical messages; he calls me back regarding them anyway.  8:45 on Sunday night a couple of weeks ago, he called just to touch base about a part of the deal we were doing.

This guy is hungry, and he’s good.  Trust me, those unknown details are the most critical part of a new relationship’s apprehension, and that’s the legwork I’ve already done.

Have a great week!

Human Business Works

I.    Am officially.   A “startup.” startup

In the business world, a “startup” is just that–a brand new company with an idea, product or service which hasn’t quite gotten going.  It needs to have its affairs in order, begin drawing as many customers as possible to it, build buzz around it by word of mouth or other marketing techniques, and most of all, start making money.  A startup almost (emphasis on almost) always runs in the red for a period of time before its revenues overtake initial launch and operating costs (read: “makes more than it spends”).

Well, all of that applies to me, at the moment.  Since beginning in real estate, I’ve had relatively small startup costs, but I do owe it to those invested in me to repay them in short order, and do with their funds exactly what I said I would.  (I’m working on it, and I have.)  I’ve convinced my first few clients to hire me as their Realtor, and I’m busting my butt to provide the highest level of customer service that I know how to, in hopes that they will like me enough to refer others to me.  What more can I do, right?

Well, there is something.

Besides staying informed by reading blogs like Seth Godin’s, Marcus Brotherton’s and Mark Cuban’s (among others), there are ways to boost business.  Chief among them is to partner with someone who knows what they are doing (which I’ve done at Keller-Williams Capital Properties by hiring a 20-year-veteran mentor).  Well, after doing a lot of homework, here’s the next big thing for me.

If you are running a business–or WANT to run a business–you need to sign up for this newsletter.  This guy’s name is Chris Brogan, and the man is unbelievable.  His newsletters show up in your email once a week on Sunday mornings, and they are the perfect way to open up the day:  I literally make my coffee, then sit down and start reading for about 4-5 minutes, and come away uplifted and motivated and creative.  His messages aren’t canned, and probably 90% of the time, they aren’t even sales pitches.  Hell, looking back on it–I didn’t even know what he was selling until about 4 weeks in, when I went to the site on my own.  The guy just puts down in words the ethos that he lives each day, and if you can harness some of his (err, actually, your own) energy, it really sets you up to face the week positioned well from the outset.  I’m serious–it’s one of the highlights of my weekend.

He’s got a brand new book (which I’ll be getting on order this weekend), and no, he hasn’t paid me to say any of these things.

He responds to emails when you have questions, he’s an established businessman…it’s like having an even BIGGER mentor, in my opinion.  Seems like a smart, logical next-step for a startup like me.  I’ll be “leading with revenue,” of course, but I’ve got my eye on some of the courses on the Human Business Works website.

Are any of you out there already affiliated with Chris or HBW?  Have you ever taken any of the courses?  What did you think??


You Share In My Triumphs, And…

Wow, it’s been a while!

My losing track of timing with this blog was an honest mistake, I promise.

I’ve been unwittingly redirected, and I’m a little down about it.  You’ll probably remember what a big stink I made about returning to school at 30 years old, and how excited I was to tackle that enormous, daunting task.  I planned and thought and planned long and hard about how I was going to achieve all of these different goals that I have, wondering where I was going to find the time to be successful at all of them.

It seems that the system has made part of that decision for me.

I found out a couple of weeks ago that I won’t be able to qualify for the loans to pay tuition at American University.  It seems the $60,000 I applied for ($56K for tuition, plus $4K for books, parking pass costs, etc) was just too much for the lender to bear, given my and my wife’s prior student debt load.  It’s just as well, I suppose…I’d rather find out about it now, than to get halfway through the program and be stopped in my tracks, already $120K in the hole and unable to continue.

Even still, it’s a bit of a letdown for me.  Most in my small sphere (comfortingly) suggest that I could do it for far cheaper elsewhere–and they’re right–but I wanted to finally accomplish something I have tried at several times, but haven’t:  Earn a stinkin’ degree.  A Kansas State, I just wasn’t mature enough for it; at COD, I got screwed out of it (the A&P program I was in never got accredited by the state of IL, lost its funding, went to another school…ugh).  I wanted that piece of paper on my resume, an actual college degree hanging over my desk in whatever office I work in, all gleaming with a prestigious school’s name across the top, emblazoned with “With Honors” underneath.  In reality, I still do.  In the business world, pedigree means something, and for me, AU was the best place I could find to start.  The alumni association alone is a networker’s heaven.

It seems silly, I suppose, to go after a college degree out of wanting to accomplish something, more than for strategic or marketability purposes…but I guess it doesn’t really matter whether it’s the chicken or the egg that came first, in the end.  A degree is kind of a win-win in that case.

For right now, I work nights, and my days are free.

Just yesterday, I passed the exam to become a licensed Realtor in the state of Virginia.  I’m really excited about the prospects of this, but I can’t help but wonder if I’ve somehow made a grave mistake which I’ll pay for dearly later on.  I’m not usually such a paranoid fatalist, but this one has been nagging at me.

How have you handled choices like these in your life?  What have you done to overcome them?


The Great Unknown…Returning To School and Career Change At 30.

The time has come to stage my coup.

I’ve been accepted into The American University’s Kogod School of Business, and I can’t wait to get that ball rolling in the fall.  Further, the time has come for me to transition out of aviation (for now) and into a subject that I began focusing on and learning about over five years ago now:  Real Estate.

Business and Real Estate–two things I have no formal experience or education with yet.  I’m leaving the comfort of showing up to work every day at 8am (or 7, or 5, or 6pm), punching the time clock, working on tangible, mechanical things and seeing tangible results…the truth is that I have no idea what will happen in the next couple of months.

It’s both exciting and terrifying.

But you know what?  Nothing will happen if I don’t do it myself, right?  I’m ambitious–sometimes too much so, according to some–and I’ve been waiting for five years to be able to act on this.  I only put it off that long so my wife could properly finish her graduate degree in Arizona, and we lived on my salary alone before we moved out here to Virginia.

Frankly, I’m nervous about how we will survive here while I’m in school.  Our bills aren’t exorbitant, but our cost of living here is.  A nice place in a relatively safe area has been running us nearly $1700 per month in rent, and that isn’t unreasonable out here.  We have basic cable, two sensible, reliable vehicles, and some credit card debt to deal with, but otherwise, we aren’t spendthrift.  We had smartphones (which I got us for cheap during a free upgrade period with our provider), but we downgraded them to save $60 a month on the (required) data plans.  We’ve held off on buying an iPad, despite how handy we would both find one to be–and how much we salivate every time another iteration of it comes out.  We’re getting rid of cable, because it makes more sense to rely on Netflix or Hulu than to pay out the nose for three hundred channels of “WasteYourTimeHere.”  We’re trying to find a cheaper place to move, but we don’t want to dig up $3400 to break our lease early–and that’s if we could even find something.  The occupancy rates at apartments are so high out here that we didn’t even bother looking at several of them because we simply couldn’t find parking near the leasing office.  It’s a great time to own an apartment building.

We’re downsizing as many of our expenses as possible to keep our bills within my wife’s salary alone, in anticipation of my starting school, and the income lag from starting in real estate.  I’ll pick up a job to get through it if I have to, but I’d prefer to have the ability to focus my energy on schoolwork, internships, and networking opportunities if I can.

And then there’s the real estate.

I plan on being a licensed Realtor by September, when school starts.  I figure it will pay off because I’m pretty decent at networking, I talk to everybody, and being in classes with hundreds of students every day gives me the chance to build a friendly rapport with a captive audience.  This will let me capitalize the most out of my time there, because look at this:  The average price of a home in Muncie, IN is something like $185K.  The average price of a property here in the DC area is nearing $400K.  Some of the contacts I have figured out that it would take literally three times as many homes sold in Indiana as it would to make the same money here.  DC will treat me well, if I can wiggle my way into it, and figure out what makes it tick.   As it stands right now, though, almost no one knows me, and I have but a few people in my address book here in the area.  That, of course, is up to me to change, and I intend to; it’s just that everything takes time.

I’m excited about my prospects, though.  I’ve been doing my homework on these choices for years now, and I’m confident they are the right way for me to go.  In five years, I expect to have achieved my goals.  I am standing on the precipice of a turning point in my life.  I know I’ll do it–I know I need to–but it doesn’t stop me from being consumed with trepidation of the unknown, and frustrated by the constant juggling I’ll have to do until I cross the finish line.  I guess that just means I’m human.

Enough about me–what’s new in your life?  What’s the next Great Unknown project you are tackling?  Has it gone according to plan for you?  Did you anticipate the issues you ran into, or were you blind sided by some of them?

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