Without a Plan, On a Day-to-Day Basis.....How Do You Know What To Do?
Quick....here's an easy question.  How do you get from Point A to Point B?     For example, imagine you're driving from your house to a new restaurant you've never been to before.    The question is, how do you get there?  The answer is simple:  Follow the directions.   The directions are your plan to achieve your goal.  Just like in life, business follows that simple approach.   

If you want to be successful, start with a good plan and follow it.   It doesn't have to be a 42-page plan and quite frankly, that would be defeating.   A plan can just be simply what are the specific actions I going to take in the next 30 days to get closer to my goal?   However, when I review most student's plans, there just isn't enough detail to make the steps actionable.  Breaking things down to actionable steps is the key to building a good action plan.    Ask yourself this:   If I were only to have one 15-minute period to accomplish as much as possible,  how would you then break this plan down further?    

For example, using the above driving-to-the-restaurant idea, if I were to lay out a plan it wouldn't start with "drive to the restaurant".  It would probably start with get the directions, then #2, print the directions, then #3, get to vehicle, then #4, drive to the restaurant.    Of course it could be broken down to even greater detail; however, the point is it needs to be actionable.   

The shadow side of our subconscious keeps us away from creating a plan.   The shadow side doesn’t like accountability and wants to keep us away from putting something down on paper.  Once it’s on paper, it can be measured.  Your shadow side is trying to keep you at the same level of performance and it will resist creating a plan.  Therefore, understanding this and learning how to manage against it is an important success mastery, and a topic for a future article.  

When you have a plan and keep improving it, making it dynamic, you’ll be able to capture and organize your approach to success in addition you’ll be able to capitalize on innovative ideas that come to mind.   If you’re trying to keep it straight all in your head, you’ll be too busy and distracted to capture new ideas from the positive-side of your subconscious.  Once you get your plan out of your head and on paper that will free up your subconscious to focus on other creative solutions to act upon and incorporate into your plan.  

So the million dollar question!   How do you make a plan?   This will be the topic of our next article later this month called Components of a Successful Action Plan.  

It Starts With a Mirror Confession

"You will be the same person in five years as you are today except for the people you meet and the books you read.” 

- Charlie Tremendous Jones. 

One reason successful people are successful, is because they have success habits. Habits are so powerful, and one habit I've tried to follow is asking my mentors and teachers for book recommendations. Several years ago I heard a quote "You will be the same person in five years as you are today except for the people you meet and the books you read.” Therefore, in the last 5 years I've been trying to read books which have influenced some of my mentors. When I asked one my mentors, George Antone about what book had the greatest impact on him growing up, he recommended a great book called "The Power of Positive Thinking", published in 1952, by Norman Vincent Peale. This book now holds a spot on my bookshelf alongside other great books that have been recommended to me.

Ultimately, one of the themes of this book is mindset and trying to look for the silver lining in every gray cloud. Focusing first on what benefit and what positive element that is in every situation as opposed to skipping to the negative (which is much easier). What for? What difference does it make? This perspective will give your more happiness, energy, and success. The success will come both in business and in your personal life. Continuing to look for the positive will keep you motivated and determined to find that positive thing, before giving up thus creating an attitude of.....

* This doesn't work for me or
* I'm a failure at everything I attempt or
* Other people find luck when all I find is failure or
* I'm no good at relationships.

How? How does one accomplish this? How do you keep a positive outlook? Turn on the TV and all you see is negative. Of course the news is mostly negative, but it's not just the news, it's also throughout the other shows, the sitcoms, the talk-shows, even in most of the movies. Everything around us seems to be pointing to that direction. How do you keep that positive outlook? Then, and more importantly, are you to just ignore all that negativity? What if you're experiencing setbacks and failures? Are you to just look away and take somewhat of a pollyanna attitude about life, with your head in the clouds saying "I won't look at that because it's negative"?

Well #1, the answer is no. It is important to look at the negative. It's important to recognize that it is negative. It's important to draw a distinction between the thing that you don't want and those things in life that you do want. When you're experiencing those setbacks, it's important to understand and realize that this is not what you want and these things which are going on are not going to your plan. It's key to realize that difference between what you don't want and what you do want. So - keep it real.

However, once you see it, and recognize it, then switch to begin thinking of what you do want. You're not to spend all day thinking about the negative and lamenting upon what you aren't and what failures have become you. Your story needs to be that of - this is temporary and I'm more like this. I used the word story in that sentence on purpose. What story is it that you're telling yourself on a daily basis? What story do you repeat not only to yourself but to those around you? When you fail, how do you respond to your failure?

Learning to see yourself as a winner and to feel like a winner happens primarily as a result of having small successful experiences and thinking self-affirming thoughts. When we believe our efforts will be successful, we become venturesome and are most likely to undertake an activity or task. Because we expect to succeed, we persist until we do. This successful experience causes self-affirming thoughts, which boost our self-esteem, enhance self-efficacy, make us feel good, and will lead us to believe we will do well in the future. Thus, we attempt more, and the upward spiral continues. This internal system helps us grow and develop -- it is a natural continuous quality improvement program.

There is, however, an equally powerful downward spiral that can interrupt the natural growth process. If we believe we are likely to fail, we undertake activities tentatively, expecting a negative outcome. We feel anxious about our performance, we avoid or remove ourselves from anxiety-producing situations. When we fail, we say "I told you so" to ourselves and make a mental note to avoid similar situations in the future. When we expect failure and succeed anyway, we toss it off to luck or say it's a "fluke" or "only temporary," and hold on to our negative beliefs.

The key to this entire puzzle is our thoughts. You've heard, I'm sure, you're thoughts shape your future. Well, the HOW do we control those thoughts is what I'd like to discuss over the next few weeks. How does someone take the negative self talk and change that into something that can work for us as opposed to at odds with us? How do we change that story we tell ourselves? How do we reshape those thoughts to control the pictures in our head which drives our behaviors?

The Inner Game Challenge You'll Never Move Past

“Focus on where you want to go, not on what you fear.”
― Anthony Robbins


The constant and anxious thought of what's lurking around the corner keeps me up at night.   What could happen?  What might happen?   I don't know all the answers.   How can I proceed without knowing everything?    Eventually, thoughts such as these, if left to persist, will rob me of my dreams.    

What is fear?  And why is it so powerful?  

Let's break this down - quickly.   Fear is factory installed.  It comes from the inner most complex regions of your brain, but is designed to protect you.   As hunter-gatherers, we were always scanning for food and also scanning for danger.   We're looking for opportunity, but also at the same time, watching to make sure we don't get eaten.  So fear, is an early warning mechanism.   EARLY WARNING to alert you that you may get hurt - and more information may be needed.  

So what's the problem?   If fear is designed to protect you and designed to keep you from harm... what's the issue?    The problem is when hesitation turns into procrastination.    Procrastination is a dream killer.  The more you procrastinate on your goals and actions towards those goals, the further you get from achievement.    Think back through your life, how much has procrastination cost you?  How much time have you wasted in the procrastination mode?   How much money has this cost?  For most, it's well over 6-figures.  
So how do we overcome this model of procrastination from fear?    

Ultimately, you must understand that you can never get rid of fear.  You've always had the ability to create that emotion, and you always will have that ability.  It's factory installed.  It's designed to protect us and alert us when we need more information or more knowledge.   So, in that spirit, understand that and accept it.  Celebrate it.  Thank your subconscious for alerting you.    Then, (important next step), take action inspite of fear.   As you take those action steps, feeling fearful will subside, decrease and go away.   If it's more knowledge that you need, seek it.  However, do not allow that to be a crutch where you get into analysis paralysis.    You must take bold and decisive steps.   They can even begin as small steps toward your goal.  However, ACTION IS KEY.   

Next, be persistent.   Treat the experience as an opportunity to learn.    Are you afraid of failure?   We learn best by mistakes.   If you want to learn at a faster pace, we must make mistakes at a faster pace.  Those who are unwilling to fail, will never succeed.     There's an old credo that I subscribe to and has helped me through many challenging periods, and reminded me that I need to press on when fear seems like it's overshadowing my vision.... 
My Success is not measured from the number of times I fail, but by the number of times I succeed.  And, the number of times I succeed is in direct proportion to the number of times I fail.  I will not treat failure as failure unless I choose to give up, for success is not given to me. I will succeed because I choose not to give up.  

How To Achieve More Than Ever Before....

Very early in the world of an entrepreneur, a light bulb goes off, or more like a firecracker where the new business owner says to themselves.....

There's Way Too Much To Do & 

Not Enough Time To Do It!

How do you do it?  I'm often asked?  How do you build a business, while keeping your job, keeping your family intact, and your your sanity?   

Here's an adage my mentor and coach shared with me early on.   There's always enough time to do the important things - in fact there is an abundance of time available.

How is this possible?  I feel like I'm running from one thing to another, spinning my tires along the way.   How can I accomplish more when it doesn't seem like I have any time right now to accomplish the things I've already committed to?    How can I accomplish the important things?   How can I fit this all in when I don't even have time to read this email or blog post right now?

Introduce the solution:  The Critical Action Plan.    

You may have heard about The Critical Action Plan.  My good friend and coach Mary Beltrami probably introduced you to The Critical Action Plan, but are you using it?    If you've not heard of it, let this be a short introduction to you and a challenge to everyone.   If you're not achieving the results you hope and desire, look to the fundamentals.   Success leaves clues.  Look at the clues of your business and your life.   The most successful entrepreneurs have a Critical Action Plan and are using it on a weekly basis.   Are you?   Have you created yours?    Why not?   Are you afraid it will work too well for you?   Are you afraid it's a waste of time?   Let me tell you - if you have not created a Critical Action Plan for yourself and working off of it on a weekly basis, you are certainly wasting time... guaranteed.  

What Is a Critical Action Plan?

Simply put a Critical Action Plan is a series of events that you must accomplish to achieve some end result.   This is not a to-do list, but more of an action list.  It's a list of things that must get accomplished - yes - but more than that it includes a verb to get you into action.   In addition, there are key elements to any Critical Action Plan.

Let's break this down a little bit.   First of all, it starts with a goal.   Everything starts with a goal.   When you get into your car or truck, you always have a destination in mind.   I'm going to the "post office" for instance.  That's the goal.   Then analyzing every step toward that goal would be an example of a Critical Action Plan.    

Thinking about the critical path for achievement, we reference the Critical Path model.   With the goal in mind (remember, the goal comes first), create a list of all the activities required to achieve the goal.  Then, consider the time duration that each activity will take to complete.   The evaluation of the critical path will then give you a rough idea of how long it will take to achieve the goal. 

For each activity, think of the steps involved - not the outcome.   This is the major deviation from a traditional to-do list.   The to-do list oftentimes lists goals or achievements or outcomes.    Although it is important to keep outcomes in mind, they are not action plans.   

The process of "chunking up the elephant" is also important when creating the Critical Action Plan.   Getting in the habit of breaking large tasks into smaller bit size events is a best practice for getting things done.     

How Do I Create a Critical Action Plan? 

Step 1:  Beginning with the goal.   Let's assume your goal is to close your next deal.   
Step 2:  Start Chunking up the Elephant!   If your goal is to close your next deal, what steps do you need in place to make that happen?   

Obviously you need to be looking at deals!   How many deals will you need to look at to close one?    Maybe 10 or 12 or 15?     So put that down as the next action step.   "Look at 15 deals".   We also need a timeframe around that.   This could be easily done in a 3-week timeframe if you had a consistent flow of deals to look at. However, if you're lacking in that area, how can we shore that up?   

How can we get a consistant deal flow coming in?    More chunking up the elephant.... How many deals can you expect from one deal source or another?   And, how do you put in to place all of these varied deal sources???? and how long does that take?   

Going back to the original goal of getting your next deal within 3 weeks may not be realistic due to critical downstream objectives.   This may now take you another 3 weeks to cultivate enough relationships to get your deal flow to 5 deals a week.  

So, we set another goal.   How many deal sources would you need to get to a consistent 5 deals a week?   Ten?   How do you know for sure?   This is where you can get feedback from a trusted advisor or a coach.     Someone who has visibility into your future path and who can advise you on the best course of action.   

Let's assume for a second the answer is ten.   Ten deal sources which could be from a variety of differing types of source.    So this is now a new goal.  Get Ten Deal Sources.    How do we accomplish this?    More chunking up the elephant.     Often times, then we can go back to a list of best practices or instructions to the business model to achieve these goals.  

However, it then needs to become a list of action plans, not a to-do list.   For example, let's assume, based on our research, we want to find an experience real estate investor who's buying and selling at least 10 houses per year.    There are several - several ways to find this person.    There are at least 4 that come to mind immediately and another 2 just as I've written this sentence.    Let's take the obvious, most basic idea and that is going to the REIA to look for this investor.   

Don't forget the goal.   Get a Deal Source.  Now, we ask ourselves, what is the critical list of actions to get to this goal?    We make a list, and put a timeline and deadline around each one. The more we chunk it up, the more actionable it becomes.    The goal in itself is not actionable.   Keep asking yourself, what do I need to do to accomplish this goal?    

Well, at the basic level, you need to meet several investors.   It's not reasonable to assume that the first investor you meet will become a deal source for you; therefore, set another goal to meet a # of deal sources.  How many?   Ask your coach.   Usually, somewhere between 10-20 investors will produce a deal source.    Ah, are you getting it?   Meet 15 Investors.  That should then be your next action item in order to achieve this Get a Deal Source goal.    

Then.....how do we Meet 15 Investors?   We've already decided going to the REIA is going to be our approach.  However, is Going to a REIA  something that is actionable?  In other words, can you go and take action on that?   Most likely not.  Finding out what time and the location the REIA meets and then booking it is a list of critical action steps. Thus becomes our next 3 action items for our Critical Action Plan.
Find a local REIA
Find the Next Meeting Time and Location
Schedule REIA Meeting into Calendar 

Deadlines are also an important component to the Critical Action Plan.   Assigning a deadline then scheduling these action items will help you accomplish those action items on time. 

How Do I a Use Critical Action Plan?  

Unfortunately, this is where most investors drop the ball.  They know about the Critical Action Plan, but fail to implement it properly.   The Critical Action Plan needs to become your working tool that guides your actions and plans for the week.  You should be referencing it on a weekly basis, delegation from the Critical Action Plan, keeping track of updates on your Critical Action Plan, and adding new projects and initiatives from within the Critical Action Plan as they come up.    A sophisticated project management software tool can also help; however, I've seen very useful Critical Action Plans kept on a notebook.     The key is to use it daily or weekly, identifying all the events that need to take place in order to achieve your goal.   Working with an accountability partner can help you stay consistent and will help you achieve more.    At the very least, you should be reviewing your Critical Action Plan weekly.     As you approach goal achievement, setting new goals and objectives then becomes your task as you maintain momentum.    Use the Critical Action Plan as a tool for direction and organization.   

Banker's Secret Lesson #1, Cover Your Downside

My mentor once taught me, never work without a safety net.   

Construction of the Golden Gate Bridge

This is the same lesson that can be learned by observing the world's largest banks and investors.  

Banks are very good at covering their downside.  They do a great job at mitigating any loss that might come their way.   The cover the downside and let the upside take care of itself.   In business, nothing is guaranteed; however, what banks do it try to protect themselves against loss.   

Over the next several blog posts, I'm going to reveal lesson's learned from banks, and how you can cover your downside on real estate deals.    Begin thinking with the bankers mentality and you'll begin to see things with a different lens.   Try to figure out how you can be on the receiving side of inflation, how you can be on the receiving side of appreciation, on the receiving side of opportunity costs, all the while - protecting your downside. 

The most obvious way banks look to protect their investment is asking for some type of collateral.    If I came to you with a gold brick or a Lamborghini, or something of great value and asked you for a loan at 10% of the value of the thing, would would be a good deal?   Would you be OK giving me a loan for let's say $10,000 if the thing was worth $100,000?    You can't lose right??!    This is how banks look at lending opportunities.   They say, "if everything goes bad and the person stops paying, can I recoup my investment and maybe even make more?"

As investors, we need to always be thinking of how can I cover the downside.   Regarding collateral here's an interesting question:  Are there ways to make the collateral worth more once you've loaned against it?   How can you continue to increase your upside and also make the downside so attractive that you make money in either case.   

More later.  Keep thinking of ways to cover your downside.    Till next time. 

The Banker's Secret To Business Works! Lesson #4

I would rather earn 1% off a 100 people's efforts than 100% of my own efforts.  --John D Rockefeller

Banks have a simple model.  They borrow at a low rate and lend at a higher rate.

The funds they "borrow" are in that of their customer's savings accounts, usually paying around 1% or less.    However, they actually have the ability to lend out 10x the amount of funds they've taken in as deposits.   

They get to supercharge their profitability 10x thanks to the magic of Fractional Reserve banking practice.  

Other industries can't do this  - leveraging their product and profiting on a fraction of the commodity.   Imagine paying for 100% of a car and only receiving the front half for instance.    

The model works.  

This is evidenced by The Wall Street Journal's recent reports of Bank of America, CitiBank, Chase and Wells Fargo are making a strong comeback from the financial crisis of the late 2000s.    Since 2006 over 380 banks and mortgage lending institutions failed (The Mortgage Lender Implode-o-Meter), but it looks like banks are just as healthy as they ever have been.   

It's proof again that the banking model works.   

In addition, there are many things to be learned from the world's largest banks.  One thing they do very well is hedge their investments.   Banks are invested in many diverse industries which allow them to balance any risk of loss.   How can this be applied to the Real Estate Investing business?    One thing that can be done is balancing your portfolio by shorting investments in the equities market which strongly correlate to the housing market.    This will offer you an upside if the market turns down.  

Covering the downside should be #1 priority when evaluating an investment.  Trading rose-colored in for a dose of humble pie allows one to slow down and look at the downside of the investment before we look at the upside.   Mitigating these potential risks will make your balance sheet stronger which can build momentum, confidence and more success.   

Following a list of identified best practices based on the bank's business model is something we can all learn and profit from.    I'll share more tips in the coming weeks.