In a similar vein, a former business partner of mine once quipped “The difference between a having a goal and indulging in a daydream is having a plan.” That always stuck with me.
Once upon a time, about a year after I got sober, I was cleaning out a desk drawer and I happened upon an old “todo” list that dated back to my drinking days. It was clear I had plans for that day, whatever day it was…but I never got past the “buy beer” part of the plan.
I realized that that was very typical of my life then, and continued to be even after I sobered up. I would head out from the apartment with the intention of going to the computer store, run into a friend on the way and end up sitting in a coffee shop and putting off my original plan.
The key insight for me, at the time, was that if I could make it a habit to continually make, and stick to, small plans, I could accomplish great things. So every time I roughed out a basic 3 or 4 point plan for my day, or my evening (these days I have a “tonight” list, where I enter things I want to do after we get the kid to bed), I did my best to cover off those points, no matter how insignificant.
Because the valuable skill to be honed is not accomplishing trivial things, but rather that of not allowing oneself to be distracted from his gameplan by anything else, trivial or not.
Once that is ingrained as a habit, then it builds up your tenacity and your commitment to your goals.
There may be people who are perfect at this, but I am not one of them. I still consider myself very much in the “needs improvement” category.
But still, I come up with a lot of ideas. Piles of notebooks and computer files full of them. I execute a fraction of them, many of those extremely belatedly (sometimes years later) and of those, most fail.
Having lots of ideas is good ammo for execution. To me there is no harm is having a notebook full with too many ideas I’ll never get around to (which brings us to the topic of resource allocation and prioritizing, for another post). But once I pick one to act on, it’s time to come up with a plan and execute against it.
A prominent general from some bullshit war or another (General Schwartzkopf perhaps?) once said something along the lines of “no plan, no matter how well crafted, ever survives it’s collision with the enemy intact”. Meaning, that your plan will need to adapt to changing circumstances, but that is far far different being chronically distracted from, and lured away from, what your plan actually is.
Television, substance abuse, eating, gambling, facebooking, whatever. These legions of worldly distractions are put there to separate you from your goals.
]]>
Before you ever put any money into the public markets you need to have the following down cold, or YOU WILL LOSE YOUR MONEY
1) Investment objectives: you need to know what you are out to do. “Make money” isn’t it. Do you want to buy companies cheap that will appreciate at a decent rate over time? Do you want to build up a nice stream of dividend income every month? Do you want to buy low and sell high? Do you want to short stocks?
Biggest decision: You have to decide if you are going to be an INVESTOR or a TRADER.
An investor will step in a buy things when he thinks the underlying value of the asset (company, stock) has diverged from the current price.
A trader will buy something now because he thinks the price is going up.
There is a big difference here and it is key. You must know which method you are employing for each purchase before you make it. Otherwise, consider the following:
You buy company A and the stock price (as if on cue) tanks. What do you do? (There is an old joke on Wall St “My short term trade just became a long term hold”)
If you are an investor, who has calculated the value of the business to be higher than your entry price, then if nothing has changed in your assessment of the business, you gleefully rub your hands together and you buy more. (Think Warren Buffet)
Successful investors spend long periods of time under water on their investments with only their own confidence in their model to sustain them until the underlying price reverts to its intrinsic value.
However, if you are a trader, you have to admit that you were wrong and take your small loss before it turns into a big one, and move on to the next trade.
Successful traders have horrible batting averages, they are wrong more often than they are right – but they have the mental discipline to stick to their plan. Thus, they let their winners run and they cut their losses. Most people do the opposite (because after you study psychology of trading you come to understand that we are hardwired to do the opposite).
In either case, they never put their money on the line until they have a coherent plan and investment methodology which they will adhere to no matter what.
This is what separates the winners from the losers.
Get and read these books:
The Disciplined Trader & The Investors Quotient
Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets
Mike Swanson’s Strategic Stock Trading
David Skarica’s The Great Supercycle
For added measure:
Sham Gad’s The Business of Value Investing
The “Little Book” series:
The Little Book of Value Investing
The Little Book of Sideways Markets
(Circling back to the late-night huckster who was advising people that the S&P was going down “hundreds of points” – I personally have a theory that the world’s most successful investors do not actually PREDICT the future. They succeed by correctly understanding the present – so people who offer to “sell predictions” are usually in the prediction selling business, not in making money in the market business)
]]>1) I read a lot of books. There are very few unique problems and nothing’s new under the sun. So whatever I’ve faced over the years, whatever I wanted to learn about, there was always a previous body of knowledge out there I could draw upon.
The internet greatly amplifies this pool but increases the need for filters.
2) I have had great mentors. Mentors are a type of filter. They help you strip out the noise and the bullshit and to benefit from their past. They enable you to cheat the Ben Wicks idiom: “Experience is something you don’t get until just after you need it”.
3) Naivity, gullibility, a certain type of stupidity that enables me to try things because they appear to be simpler than they actually turn out to be. Otherwise I wouldn’t bother.
4) Tenacity, long-term thinking. Remember: if it was easy, everybody would be doing it.
]]>Average people require ideologies and belief systems to numb their minds. They need an either overtly or subtley authoritarian societal structure to keep the wheels on civilization. They are perpetually interchangeble, replaceable components of “The Mob”.
Non-average people set out to accomplish whatever they set their minds to, regardless of what the rules or social norms are.
In just societies every single average person has the choice to make the leap from average to non-average but it is not easy. There are barriers and hurdles to overcome and this is part of the process. Some of these barriers are societal, some are conventional, but most are personal.
The thought to cease being average and become non-average simply never occurs to most average people, and to those it does, they find the process difficult and discouraging. Of the minority of the herd who attempt it, most drop out and languish on the fringes of the herd as beatniks and malcontents.
If it was easy, everybody would be doing it. That’s what being average is all about.
]]>I never made it through the video, because frankly, life’s too short to sit through something you already know the ending for, especially when it’s a marketing pitch for a bullshit marketing course teaching you how to make “big bucks”, in this case on my home turf…the software business.
(Just so the slower students get the formula, it’s like this:
- Squeeze page to get your email address, welcome to yet another dipshit list, here come the automated sequential mailings….
- The “free report” or in this case a video “blueprint” is nothing of substance, just a longer pitch for the “course”. If you sit through the video you get the standard issue fare
- Testimonials from people with half the intelligence and talent than you who made “big bucks” using this system
- A can’t fail risk reversal proposition: if you aren’t satisfied, you get your money back, how can you lose, blah blah blah
And like I said, I didn’t watch the whole thing, but there was probably a side order of….
- Scarcity: Because of the value of this information, there is likely a “cap” on the number of “students” who will be “accepted” into this, so he’s capping registrations at 2 billion and ……
- Urgency: those slots are filling up fast AND there’s a special price on if you sign up in some perpetual “now” moment, after which the course price goes up to some price that looks straight out of hyperinflationary Zimbabwe.
thus ends the standard squeeze-page-opt-in playbook….moving right along)
Almost as if this entire pitch page was made to validate yesterday’s post, the course is about
How To Make Money Using Software
Because, as I said yesterday, the entire online marketing industry is about marketing, and it by definition (almost proudly so), relegates what is being marketed to the back seat.
So the entire thrust of “the course” is this:
- There is “big money” in software (which is true)
- You can grab a chunk of this, without knowing anything about software!
- You do this by outsourcing everything and doing it on the cheap (including support)
- The secret sauce in the formula is the marketing.
Which is all true.
Make no mistake, what this guy says will work, and people have been doing it for years and making huge fortunes at it.
There’s just one problem:
Most of the products suck. Most of the services are sub-par and virtually none of these “fast buck” enterprises ever actually make it to the point where they become viable businesses: with competitive advantages, barriers to entry, strong brands and (tada) recurring revenues.
There Are Two Kinds of Businesses
There’s the kind of business where the dumber the customers are, the better it is for business. Pretty well all the online marketing gurus are marketing toward these people. And after these people take these marketing “courses”, they will pull vaporware “me-too” products and nebulous pseudo-services out of their ass and sell them to more stupid people. From a high altitude it looks somewhat like a ponzi scam because the people “in early” tend to do well while the latecomers merely serve to enrich the gurus.
The other kind of business benefits from a more informed customer. The smarter the users, the better it is for business. These are the types of businesses I like to invest in and build. These businesses tend to grow organically (albeit slower), but they actually serve a purpose and over time they end up building what’s called “a moat”. A durable competitive advantage that cultivates things like brand loyalty and recurring revenues. The interesting thing about these businesses are that while they take longer to build (in general) they retain and amplify their value. They have resale value. When it’s time to move on you actually have a business with a portfolio of products or services and a customer base with recurring revenues that you can sell to an acquirer.
Me-too marketing pipelines, devoid of any real substance may make a lot of money in the short run, but they can’t sustain. The revenues generally aren’t recurring. A “marketing list” is built up, but it’s not the same as a customer base with ongoing revenues. The marketing list is just your “dipshit list”: people stupid enough to have opted-in or even better bought something from you to which you incessantly bombard with new marketing pitches to sell them more stuff. It doesn’t matter what that stuff is as long as it converts.
I’ve seen marketing businesses with purported revenues in the millions of dollars get to the point where they want to exit and they put themselves up for sale and then there are no takers. They make lots of money but they are worthless as an acquisition.
It seems like a lot of work to put into something that has an exit value of zero (and that’s if you actually get anywhere with it as opposed to just lining the pockets of the online gurus selling you “success formulas”).
If you’re going to invest in something and take the trouble to learn and build, you may as well pour the sweat into a real business and actually have something at the end of it.
]]>To paraphrase the podcast “You want to make money but you don’t know how, well I’m here to show you that you can make money by selling people information”. From there the basic play is to figure out what you know, perhaps know better than most others, wrap an info product around it, and then sell it online. Yet other online marketing gurus take it a step further: what if you don’t know anything worth selling? Well you can just sell other people’s information products and become an affiliate marketer.
The problem here is it all puts the cart before the horse because the vast majority of the work in this area simply fleshes out new and improved ways to market, but the most important component of marketing, the product or service is an afterthought. What to sell? Who cares…something…anything.
What happens is you get legions of online marketers becoming very adept at creating super-effective marketing and sales pipelines with literally nothing of value to inject into them. You end up with marketing gurus selling marketing systems that teach wannabes how to sell information products, most of which describe online marketing systems.
Ever heard of this place? It’s very instructive and a great example of what I’m talking about. It’s an internet marketing message board, jam packed with primarily….losers. People who are trying to “figure out” and crack this online marketing thing. The most instructive thing about it is this: you go through these forums and you see all these desperate dreaming people kicking around ideas, asking for help, trying to find a way to “make a buck” online (“is anybody actually making a living at this?” is an oft asked question). Then if you look closely, almost every single one of them has a signature file or a URL in their profile directing you to their “online marketing system” or some storefront, or some information product they’ve created on what? You guessed it….online marketing and how to achieve online success.
My business doesn’t “do marketing” in the traditional sense and I didn’t enter my space to “make money” per se. I entered my space with a very specific mission at the time, and it was to solve a very specific problem that I and my customers kept running into and I just went heads down to drive a stake through the heart of that problem. And it was doing that which became “my marketing”. After that came the money, which was really not a driving, motivating goal for entering my space, but a side-effect of conquering it.
So my advice is this:
Don’t come at anything from the desire to “make money” angle.
And don’t bother learning how to market.
Figure out how to solve a problem that other people want solved. Do it well and make it your business (literally) to solve other people’s problems. IF you do that well then one day, you’ll suddenly find that presto, you have something to sell.
That would be a good time to “learn marketing”.
]]>So naturally I wanted to know what tools people use to create these things, turns out there’s a free tool called Audacity that makes it all possible. And then there are video tutorials and online help galore. I used this page to learn how to remove the vocal track from your audio so you can insert other….stuff.
Inserting the “other stuff” is where it gets fun. I’ve posted my first mashup here. Highway To Hell….featuring Hillary Clinton, Sen Joe Lieberman, Jim Cramer, Janet Napolitano and a special guest at the end who I won’t reveal, but to the hackers out there let’s just say it’s a shout-out to Godwin’s Law!
Download my Highway To Hell Mashup (.mp3 300 Mb)
]]>Anyway, fuck all that new age crap. Even though some of it is true. Forget needing some cash fast to make rent/mortgage/crack/gambling debts whatever, what you really want is to never have to worry about money again. You want financial independence, you want to be rich. Here’s how you do exactly that:
#1 Make A Decision
Instead of sitting around wishing you had more money and fantasizing what you would do with it, make a decision to take control of your own life and go out and change things. Over the years I’ve seen people make amazing personal transformations and turnaround near-poverty conditions to amass enormous personal fortunes. When I ask them “What Happened?” they almost always start with “Well, first off I made a decision…..”
They made a decision to (pick one), lose weight, stop drinking, take control over their own lives, etc etc. But the common theme I find when I talk to a lot of Cinderella stories is that “decision point” that starts everything off. Sometimes there may be a HUGE lag between that initial decision and seeing palpable results, but if you make that decision with conviction, it will at the very least sit around under skin for awhile and percolate in your subconscious.
#2 Identify your most Limiting Impediment and Get Rid of It
There is one glaring issue in your life, probably so painfully obvious that you will dance around it, rationalize it and avoid it and basically do anything other than admitting it’s there and facing it. This is the single, largest impediment between where you are now and where you want to be and on the surface it may have little to do with money.
In my case, I was an alcoholic. I couldn’t make it through a day without booze and once I took a drink I couldn’t stop. Until I did stop though, it was impossible to get to where I am today.
This “one big impediment” can be anything, and what is stopping you from realizing your goals of financial independence may be completely harmless to somebody else (for example, my wife drinks wine like a normal person, I can’t understand it). For you it may be television, drugs, sex, procrastination, negative thinking, gambling – basically something that you habitually do, that if you simply stopped doing that one thing your life would open up in so many ways it would seem almost “pink cloud-ish” for awhile as you get a sense of the possibilities that now lay open before you.
#3 Become financially Literate
This is what you do while you’re undertaking the process of dealing with #2 above. Odds are you’ll need something to fill the “void” that giving up your most crippling addiction/weakness has left in your life, so fill it with knowledge on the financial mechanism of the world. There’s a great Brian Tracy audiobook called “Secrets of Self-Made Millionaires” which is a great introduction to the topic for a meager $4 or so. Then while you’re at it get and read Richard Dobbins’ What Self Made Millionaires Really Think, Know and Do – it’s out of print but you can usually get used copies via Amazon. Finally start reading the first three books of the Rich Dad series.
That’s to start. Basically plan to read about 100 books on wealth building, finance, economics and investing over the course of your ramp-up to being rich. Make a habit of this, never stop it. From here on in you’ll be constantly upgrading your knowledge.
Eventually you will know more about finance, economics and investing than the talking heads on TV and the mutual fund guy down at your bank.
I owe some success to having good mentors over the years, and I still remember years ago one of them telling me with a slight twinkle in his eye, “Son, if you know how the system works, how all these different forces interact [ he was referring to interest rates, inflationary expectations, etc] then it’s almost impossible NOT to make money”.
#4 Be Patient
Understand this now:
Every Single Program that purports to make you rich fast is designed to transfer your money to the person selling the program.
There are no exceptions. If you understand and believe this, move on. If you do not, go back to the top of this section and read that sentence 200 times. Keep doing this until you get it.
How long will it take to become rich?
The most common number I see from people who teach this sort of thing is 7 years. From the time I quit drinking and drugging to the time “my ship came in” was about 6 years. Having said that: you will find that there is not one definite moment when “your ship comes in” when you weren’t rich one moment, you suddenly are the next. It’s a gradual process, but I timed mine to a particular transaction which really locked things in for me. But I had stopped worrying about money a long time before that.
#5 Make a Plan
Yeah, vibrating higher is nice, visualization can be an important tool, “creative imagineering”, um ok. Whatever. The universe is not conspiring to make you rich. (Conversely, wealth is not a zero sum game. If you become rich it does not mean somebody else has to be poor. In fact it’s very nearly the opposite, but I digress…..)
Figure out how you’re going to get rich: starting a business is usually the best way. People try other methods (daytrading, stock market, flipping houses, etc) and usually go bust. Start a business in a field you know and understand, and eventually you can just pay other people to run it, while you collect the profits.
So plan your business and then figure out how you’ll get there.
#6 Set Goals
I have admittedly not been hugely diligent in this department, but I am starting to do this now and the results are staggering. You can shortcut the entire process by starting sooner than I did to set written goals and then work toward them,
#7 Save Money & Have Capital
I’m going to give you two snippets from two “gurus” and you tell me which one is more useful and practical:
Option A) “I never save money because I know I can manifest as much as I need at any time” (Guess who – Seve Pavlina)
Option B) “There is nothing so pathetic as a person who can’t seize an opportunity that has presented itself because he has no capital or savings to act with” (Brian Tracy)
The answer should be “Option B” because it’s the correct one. The path to financial independence is one where you have income flowing into your life whether you work or not. You do that by investing and owning assets that produce cashflow.
Remember earlier when I said I measured my “6 years” to a particular transaction which really “locked things in for me”? Well basically I was presented with an opportunity of a lifetime – a chance to takeover a business I owned a minority interest in. I was not the only minority shareholder who wanted to take over the business. But guess what, I had the seed capital to put together a proposal that flew. The seed capital was essential. I had to go “all in” but I had the ability (savings, capital) to do that. Some of the other guys sitting around the table didn’t. Hence, I now own the business and it’s the centerpiece of my financial engine and I got it at a price that is in retrospect a steal) But without that seed capital sitting on the sidelines, it would never have happened.
While Steve Pavlina may feel saving is a waste of time, the fact is that whatever one has to do to “manifest money” into one’s life, well that requires work, whether you’re scouring the ground for loose change or manifesting a larger amount. What Steve may or may not realize is that as an online guru and information publisher, his savings are in “his list”.
If you ever listen or read online marketing gurus talk about their trade, it all comes down to “their list”, this is their list of subscribers, conference attendees, product purchasers, etc. When guys like Steve Pavlina (or Joe Vitale, or any other info marketer) wants to “manifest abundance into their lives” it usually means pulling a new info product out of their ass, or organizing some touchy-feely seminar and then blasting their list. That’s how they raise money when they need it.
Personally, I prefer recurring revenues and passive income. It comes in whether I’m manifesting abundance or not.
So once all this comes together into a coherent life situation for you, you tie it all up in nice bow and you
Own Assets, Invest Your Capital & Live Your Life
Eventually, your full time job becomes overseeing your capital. You invest it in income producing businesses and assets that produce cashflow, and then you spend the rest of your time living your life.
]]>Sure, those things are nice, but they’re all just fringe benefits to being rich. The real reason to become wealthy is to be free. Basically money equals options, and in this world, the person with the most options comes out ahead.
So one day, nearly 20 years ago, when I was living a pretty bohemian lifestyle, I just sat bolt upright in bed one morning (actually it wasn’t really a bed, it was a mattress on a couple of wooden freight skids on a basement floor. I needed the skids because the basement flooded every time it rained). Out of nowhere the thought hit me:
In about 20 years
there will be no such thing as a middle class…..
I caught a glimpse of a future dystopia where there were two kinds of people: the wealthy and everybody else. And the everybody else were basically eating out of garbage cans and living in dumpsters. It was a completely “haves” vs “have-nots” society and it scared the living hell out of me. Because what I realized at the time was that the path I was on was going to land me squarely on the side of the have nots.
Further, I sensed that a fundamental shift will have occurred by then, one where the mobility between social classes, especially upward mobility that we take for granted today, would be a thing of the past.
I think about that alot now, especially as our society seemingly drifts more toward this bleak state of affairs. Make no mistake, it’s not like I endorse this type of social stratification as a “good thing”. In fact the good thing to do, the right thing to do would to try to prevent a future like from occurring, trying to help maintain socio-economic egalitarianism for all. But it’s a lot easier to do that from a position of financial independence and total personal freedom than it is from a near-animal subsistence living. The further one ascends up Maslow’s hierarchy of needs, the more social justice one can lever into the world. It can’t be done as effectively from the trenches of poverty.
Let’s digress briefly:
One of the more common misunderstandings about the Einstein’s theories is that faster-than-light travel is impossible. This is not entirely accurate. What Einstein’s theories actually posit is that it is impossible to accelerate through the speed of light. Meaning: if you are traveling slower than the speed of light (as most of us are), it is impossible to accelerate beyond the speed of light.
What Einstein’s theories do allow, it’s been called a type of theoretical “loophole”, are for particles that are already moving faster than the speed of light. These particles are dubbed “tachyons”, and you hear them referenced alot in sci-fi, Star Trek, etc. Most often in some sort of “time travel” theme. “Tachyon pulses”, “Tachyon Overdrives”, “Tachyon Can-Openers”, etc.
In the bleak future I envisioned, socio-economic status would be the impenetrable barrier through which the poor would never be able to accelerate into the haven of financial independence and wealth, while the wealthy enjoyed a self-perpetuating income via their investments.
In my minds eye I saw a rapidly narrowing window of opportunity to migrate from the underclass to the uberclass, and I did not want that window to close while I was still on the underclass side of it.
So I got off to a slow start. I was still playing in a band, partying, taking drugs and an drinking alcoholically. Over time I ended up getting clean and sober and starting a business. That was the price of admission for me: I had to leave my beloved and most crippling vices behind me. There was no way to get from where I was, to where I needed to be while I was still living that kind of a life.
Last night I had another thought about this at around 3am in the morning: the entire “tachyon meme” for this post was intended as an allegory (because they operate in the sphere of “faster-than-light” travel, tachyons are frequently associated with the concept of time travel). So then it struck me, perhaps more as a thought experiment than anything else:
What if the source of that epiphany all those years ago, was actually my future self? Somehow sending a message to the past in an effort to avoid a bleak fate?
Lately I have begun to meditate a lot, and ponder the nature of the mind, the structure or reality and my basic understanding of the cosmology I find myself existing in. Perhaps it’s possible that as my future self developed it’s own mental abilities to do so (perhaps while I was living under a bridge and eating out of dumpsters), I somehow imputed a message back to my own past, in order to head off a meager future devoid of abundance?
Well it certainly made me think. I remember that epiphany like it was yesterday, and to this day I have absolutely no idea where it came from. It certainly wasn’t the type of thing I was giving a lot of thought to back in the day.
]]>Well, you don’t have to. If you find the things you learn here of value, then run with it and remember where you read it. If not, then have a nice day.
But the reason I do not choose to reveal myself at this time is for personal reasons….The main thing is this: I have a morbid fear of “big-shot-ism”. I come to the office maybe 2 or 3 times a week and have to face a staff of 10 people who work for me, many of them for over 10 years. They have to be here every day. They have set work hours. They’re on a clock, getting paid but workin’ for da man. And I’m “da man”.
So what I don’t want to be is an asshole who rubs people’s face in the fact that I’m rich. Especially my employees. Sure, if any of them wanted to look at what I have and decided they wanted it for themselves, by all means they’re welcome to take a shot. All you have to do is forgo the security of a paycheque, start a business, work your ass off and get lucky. Because success is a combination of balls, brains, work and luck, with a side order of tenacity (and if you want to last, then I think humility is also essential).
One time, a particularly envious relative was over visiting the office with his daughter and as they were leaving he stopped in the foyer of the office, dramatically swept his hand across the office and said, in a voice much louder than it needed to be “See Carrie? All these people work for your Uncle AntiGuru” (he called me by name, but in any case I was gobstopped and mortified.)
I am fortunate and grateful to be successful. Not everybody is in life. There are people who deserve success who never achieve it, and there are people who achieve far greater success and wealth than I who don’t.
So for a long time I wanted to write about what I know, but I was very averse to coming out on some self-gratifying domain name (like IAmKingShitSoListenToME.com) and basically telling it like it is (see My Epiphany). I write a number of blogs and the rest of them can all be tied back to my true identity or that of my main business. If you compared those ones to this one you’d see a palpable “pulling of punches” on them.
Here I can let it all hang out. As we say in AA, which I am a member of, because I’m a drunk (sober 12 years), “take the message, leave the messenger”.
Because I’m anonymous, I can say things here I’m not comfortable saying anywhere else. Hopefully you, the reader, will derive more benefit from that candor than by being able to place a face to the blog.
]]>