If you have been following you will know that I entered a mentorship contest. 
You can read more here. You can go to the page for the event here or here. Well it was just announced that I made the top 15. The top 7 will be the ones that are accepted into the 7 year long program. I am excited to be so close.
Category Archives: Entrepreneurship
Are you money motivated?
I have found that some of my best thoughts have been posted on other blogs. Over the last few days I have written a series of comments on another blog and I would like to share them here.
I had a very successful computer business. I was working 80 hours a week, and it was my whole life. It was not so fun. I wanted much more with my life, so I started to replace myself. I first started by finding people who could do what I did the same or better. This let my focus on other things. I soon took this too far, spending only 20 or so hours a week working on this business, the rest of the time doing other things and working at my church. I also started a few more businesses on the side. Everything was good, then I really started taking it far, I decided that I liked to travel so I soon was spending weeks at a time away, they could still call me but that was about it.
I had put systems in place, the only problem was that I did not put systems to watch the people managing the systems. My flaw was that I thought everyone was like me…honest and money motivated. So I put in place a system where an honest person could make a lot of money by doing fun work that helped people. The problem I found was that most people are NOT money motivated, when they have enough money they stop working, and second I found a few too many people who were not honest. Due to people not being honest and taking my customers and my assets and also due to lazy people who sat on the payroll I lost about 400k in a matter of 2 years. Much of this time I was away, traveling while managers said it was all going perfect, but they were the main crooks.
Finally I took on a partner, he bailed us out financially. Scaled back the business and made it manageable. The damage had been done, and we shut down our retail operations in Nov of 2007. We still try to sell online, but very little comes from that.
I still think that the idea of systems works, and my goal was always to be able to travel, and leave it to people, but the problem has always been the people. In my years I have employed at least 100 people, some were great and some took me for thousands, I just wish I could know in advance who is who.
Then some people asked me questions…here was my answer.
First when I mean money motivated, I mean people that want to earn big money. Most people are fear motivated, they have the fear of not paying the bills, and not having food, and not having a safe place to live BUT once those fears are gone (Once they earn enough money so that they don’t have to worry) very few people that I know will continue to do what it takes to make higher levels of income. This is why 80%+ of people have crappy jobs and are not really striving to do better.
You second question was, what would I do different. Well FIRST off I would have got out of the computer industry back in 2003 or so when it became super price competitive, and there was no margin or market. I also would not have borrowed the 300k+ that I did to keep my company alive, I would have just let it die and go start something else. But if I had to keep the company I would have had more time mentoring the employees. I would have spent more time figuring out who was good and who was bad and got rid of the bad people. I would have been much quicker to fire people, and slower to hire them.
I also would have spent a lot less money on print advertising and spent a lot more money paying people to make phone calls and go door to door. Our return for that was at least 20 times higher than any print ad we ever did.
600 Word Essay, for 7m7y
Over the years I have always known that I was different, I could not even think of getting a job, I had to be my own boss. I have always seen ways to do things better, ways to make more money and systems that could be done to make it all work better. For most of my life that has worked out very well for me. But recently I have lost my way. One big reason, I believe, is because of the people I am around. They try to talk me out of the ideas I have. I don’t have many friends that are successful the way I want to be, and when I have found successful people I get some information from them but mostly they don’t see me as a peer. So a few months ago I started blogging, I used wordpress. I was able to find many other people who thought about success the way I did and some of them even had achieved it. I quickly found google reader and added the top blogs I liked to read to my reader.
I was now finding a ton of useful information. But I knew I needed more, I needed to find successful people that I could hang out with, bounce ideas off of. I needed a mastermind group, I found a few local ones, they were very expensive to join, and the people in there were great at running their business but not really what I was looking for. I also went to seminars, I found a few really good people there, one guy who I sat next to, was cynical about the content and did not stick around, we talked a bit so we traded cards. I told him I would call him later with a summary of what he missed. So I did just that, and when we talked he told me that he was a large commercial real estate investor, (Something I always wanted to do). I knew of many of his projects, most of which are worth tens of millions. A few weeks later we met for lunch and we talked for about 2 hours. I got great encouragement from him but he was way out of my league, he did tell me that if I ever found some good deals that I should call him up.
Around this time, AJC, the author of one of the blogs that I read regularly, 7million7years, decided to have a contest. This was a contest for this multi millionaire to personally mentor and help 7 people. This guy was the real deal, and even better he was a techie like me, he made his money in business and also in investing in real estate, everything that I wanted. This was what I was looking for. So I signed up. I was hoping to finally find the key that had been missing, to find the wherewithal to finally go out there and get what is mine. He first asked for an application that I quickly filled out, next he asked for a 100 word bio, I also quickly sent in. Next he posted that bio and tested the finalists on how to drive traffic to it. I did a popunder and a 120 second refresh metatag from my most popular site, I also mentioned it here and here in my blog. I also sent a few emails to friends to go look at it. I made the top 30, now I doing the next test, a 600 word essay, so that I can make the top 15.
I made the top 30 in 7m7y.
I don’t know if you remember. But a few weeks ago I told all my readers about how I was entered into a contest called the 7 Millionaires in training. Well last week the announced the top 30 and I was in it. On thursday of next week I will be hoping to be in the top 15. From there it will be the final 7. The prize for this contest is something really cool and really great, it is a mentorship from a highly successful serial entreprenure and real estate investor. It does not say how long this will last but I bet it will last until most of the final 7 are millionaires, at least that is my hope. Cross your fingers and wish me good luck., God knows I need it.
His blog is really good, find it here, he has written many of my favorite articles like this, this and that.
If you would like to tune in, there is a web broadcast show every thursday night at 6pm PST. Click here.
2008 is Half Over. Lets make some goals.
Most people review their plans every year for new years, they make resolutions, some minor and some major. For most people these are gone by the end of January. I try to update at least once per quarter, and usually break down goals for each month at the start.
In this blog I am really talking to people who run their own business, who can determine how profitable that business is, and want to make stellar profits. It is said that 70% of the people in the US don’t have any specific goals. 27% have goals in mind, but only 3% have written goals. In this 3% you will find over 95% of the entire wealth of our nation. Most people who have jobs fall into that 70%.
For this month my goals are in two main areas. First in my computer company, I want to market more to existing customers and drum up at least 10k in profit from doing this. The plan is one of daily action and contacting people. I have a huge database to work with, which is good, but the economy is limiting spending which is bad. I also want to do more real estate investing. I want to do at least one thing each day to build my network, knowledge and to actually do deals. Today I looked at various agents to work with.
So far 2008 has not been a very good year for me financially, though many steps have been made in the right direction. I have spent a good deal of time rebuilding from the bad things that happened in 2007 and the end of 2006. I have stopped the bleeding, and now we have positive cash flow for the first time in a long time. I also have expanded my knowledge and my network by huge amounts. All of this was important but is meaningless with out action, now is the time for action, and to put everything to work.
So what are my goals for the second half of 2008. Well my two main areas of focus are Real Estate investing and the continuation of the computer company. The computer company is fairly easy money, because I have a huge database of customers, a ton of existing marketing and websites and everything is in place. But computers are not very profitable right now. For this reason I have been trying to move into real estate for years. I understand the local Phoenix market very well because I was born here, I have been building my knowledge to the point that I am confident that I can most any sort of thing I want to do. Now I am building my network of buyers, agents and money suppliers. I want to do at least 10 real estate transactions before the end of the year. I also want to Average 30k in sales per month for the computer company. With an average real estate deal of 20k and a monthly computer profit of 10k that would net $260,000 by the end of the year. Of course this needs to be broken down to monthly goals and then to daily action. In order to reach these goals daily action must be done, I have a huge checklist for each business of things that need to be done, and my goal is to spend at least half of the working hours of each day working on these goals.
The point of this blog is not to talk about what I have done, but to inspire you to do the same. Write down where you want to be at the end of the year. Then figure out what you need to do each month to get there, then figure out the specific actions that must be done to get there, break it up into daily chucks and then ACT on it. I have usually been good at the planning but a bit into it I would get discouraged, and settle back to a lower level of action, and then I would miss my goal. One cure for this is accountability, you could do this in a few different ways, one is to make all of your goals, subgoals and actions public and let your friends have access, so that they can help you. I have decided to simply talk to my business partner each day and we each will keep the other accountable.
So go out and make your action plan today.
More on our complex world…
Yesterday I wrote a blog about how our country is too complex. Then I found that one of the blogs I read often wrote a blog on the same subject, only he did a better job about it than I did. Read his blog here. As it turns out he is quoting from a book about the same subject, called The Collapse of Complex Societies. I guess many people are coming to the same conclusion. Too bad for them they see it as only the fault of the Republicans, when there is much more at fault than just that. This must be much more important that I thought.
Our world is too complex and getting worse…please help.
Many people have jobs, where your job is to make something better. In order to keep your job you need to show results. Now a problem happens, many companies make their product just about as good as it can get. In the real world of products they just move on to the next thing, but in software they keep adding features well beyond what is useful.
There are many examples of this. Winamp was perfect 8 years ago, it played music well, it had good skins and an equalizer. Then they started adding stuff, and adding and adding. They put in a video player, but it sucks. They put in a browser, what is the point in that? Adobe Acrobat is a program that never really worked well. And every update just makes it slower. There are third party ones that are much faster and better. There are many other examples.
So companies that make programs have figured out that most people don’t need their updates, but if people don’t get their updates they can’t push future changes on them, that may include more advertising, or toolbars on your browser, and these companies love to do that. So they have made their programs “phone home” each time they load, and if the company decided they want to send an update they will do so. This makes these programs slower, and many of them gripe if you are not online when you load the software. At least 20 programs I know of now try to push the Yahoo toolbar on their customers each time you update and unless you are very careful and unselect a box hidden somewhere you get it. And it is hard to remove and almost totally useless. There is really a battle going on for your attention, and these companies are trying more and more intrusive things to make you use their software, even though most of it is free. The other day I noticed that if you update java, it tries to install download and install open office, a almost 180MB download. Java is just a programming language, why should they push an entire office suite on users. Most users are not smart enough to catch this stuff, then they call me when they see stuff they don’t understand, and these calls are increasing. (As a note I love open office, I suggest it to many people and install it on all systems we sell.)
Now in the world of software this is a minor annoyance. You can run older versions, or usually disable all updates. But this is also done in many other areas, it is human nature that once something is very good you will keep changing it, even if the change is bad, simply to look like you are doing something. One area where this is VERY costly and actually dangerous is in the area of Government. The government keeps adding rules, and regulations in areas where none really is needed. Many people running for office brag about the number of bills they introduced, and the number of laws they passed. All of this makes life more complex. Do we really need such a complex tax system that you have to call an expert for help and even the experts don’t know half the time. Do we really need over 20,000 classifications for imported items. Do we really need to have so many regulations on hiring employees, increasing complexity and costs so much that companies get fed up with it and simply hire people in other nations. Should it really take over a year for a citizen to bring his wife to the US legally? Do we really need the government to tell us what food is safe, to tell us that we need to give our babies over 20 shots, many of which cause more harm than good? Should it be so complex to get a Federal grant that Matthew Lesko has become famous for his awesome 3000+ page book with over 15,000 DIFFERENT programs listed (BTW read his blog). Do we really need a government with 1000’s of different divisions?
This has cost our country a huge price. Our power has allowed us to survive for a while but now a crisis is coming. It is so hard to appease the government regulations that no nuclear power plant or oil refinery has been built here in over 30 years. Most factories are built overseas simply because lack of regulations make them much more profitable. Why would you want to build you widget here, and deal with the EPA the IRS and OSHA when you can built it overseas and import it for less. This is why our balance of trade is so bad, this is why are money is flowing out of this country and we are all in debt, as a nation we are living well beyond our means. This has been a problem for many years, but just recently it has gotten so bad that people have stopped lending to us, whole nations are writing down our debt, and this is causing problems for millions of Americans. This is a problem, created by our own government decades ago, the symptoms were hidden for years, the official government report showed almost no inflation from 1997 until 2005 while the average person saw huge inflation. Now it is all catching up, and millions of people are SHOCKED by it. It will ruin the lives of millions, it will also improve the lives of millions. I have written many times about this subject, see here or here.
Anyway this was suppose to be a simple post about how everything is getting more complex simply because people want to keep their job and have nothing better to do. Please comment on what you think about all of this.
The 7m7y contest.
One thing that I have been looking at is a mentorship program, offered by a guy who is a millionaire many times over. His name is Adrian J Cartwood. He has the mindset that I want to have. He is looking for 7 people to teach how to be a millionaire. He is writing a book and is using this as more material. I applied, here is my profile on the page, with typos and all. From there you can find out much more about the program, and you can also apply. It looks really exciting, I hope I am selected.
A story from the heart, what drives me.
I often think about my dreams. To me almost all of my dreams have to do with my legacy, what I leave behind for future generations. For me there are a few things that really give me a great since of satisfaction. First, I really think that it is important to help out people who need help, and want the help. The think that I feel really made my life what it is the fact that I had access to education and tools to take advantage of that access. I started high school in 1989, and I was the only person I knew who had a computer at that time. I also spent a huge amount of time learning. By the end of high school I knew more about computers than any teacher there, same thing went when I was in college, almost all of this was self taught. (In high school I entered into a state competition, and got first place in the entire state for computer expertise) I only placed number 24 when I went to the national competition.
To everyone’s surprise computers turned out to be a huge industry, taking control of much of how the entire world works. I was given a huge advantage. Now we all know that computers are VERY important to success, so I have gone on a plan to give very poor children, access to computers, and access to quality education. These are kids that would not be able to get a good education or maybe even go to school. These are kids that will live a very poor life if we do not step in to help. 
This year we are looking to support 7 kids. The cost for one year is about $800 per kid. I am trying hard to raise this money now because it needs to be committed by the first of June. If you want to help out you can donate using PayPal. (Just send to my email [dragon(at)capitalactive.com] as a donation) Anything you send will go directly to help these kids. This photo is of the 4 kids we helped in 2007, before they met us they were living in a small shack, with a tarp as a roof, they never had been more than 10 miles from home, and never even seen a mall. (I have before pictures also but they would break your heart.) They were very smart but the schools they went to were very poor, and this kids were years behind the city kids, even though they were near the top of their class in their rural schools. In one year they were able to catch up and pass the city kids, we gave them quality food, clothes, and housing. This year I want to do even more. My goal is to support 7 kids. We will use these 4 and add 3 boys. Without your help I don’t know if I can do it.
The next thing is a much larger thing. I really want to develop Real Estate. I have always been interested in architecture and large buildings. When you see a large building you know that someone designed it and also someone thought of it and paid for it to be built. To me this is the ultimate legacy. I want to build great unique buildings that will stand out. I decided to go a different path, and I went into computers and business. But now I want to go into. I firmly believe in the mixed use real estate concept. Basically building communities, of housing, work, and shopping all in the same mega complex. This is the way life used to be but, here in the southwest, the car made all of these things disperse. Most people travel many miles to work, and at least a mile to shop. There is no community left in many places and this lack of community is one of the major things destroying our country. Imagine if you lived on the 7th floor of the building, shopped on the first and second floor and worked in your office on the 15th floor. All the while you had many friends, and felt like you truly belonged. I don’t just want to do real estate; I want to do real estate with a purpose. I have a young son, only 9 months now, and I want to leave him a legacy he can be proud of, and one he can carry on.
I also want to provide quality housing to people in need. Imagine going to a city in Asia, where the people are poor, and getting the community to work together to build a massive complex, I would supply the materials and organization, the community would do most of the work, and we would own the building and charge a very low rent. People would have the ability to move up from the squalor to live in healthy and much higher quality housing. What is I can do that, and impact a thousand lives in a very profound way. This is the legacy that I want to leave.
Now I am only 32 now, I have decades to do this. I am looking for like minded people who will know more than me to advise on these projects. I don’t think I will have the resources for a few years to do such a thing, but once I do it will roll on and on.
This is my WHY, this is the reason I want to be hugely successful, this is the reason why I need to make the things I do work. It is much more than me I do this for.
If you know of ways to get this done faster or cheaper I would love to hear from you. Please email me or comment below. Thanks.
How do you value the worth of a company or person?
So I am going to take a break from the series that I am writing because I have a topic that I really want to talk about. I would love to get some input from my readers, so please leave a comment.
There is a website called Networth IQ, this website is about keeping track of your income, assets and debts. Then over time you will be able to track how your networth is doing. When you track something you focus on it more and then it starts to improve.
Now after using the site, I did expect a bit more. My most valuable asset is my businesses and there is not even a place to enter your business so I put it in other assets.
To point of today’s blog is to ponder the question of how to value a small company. When you are a public company the value is usually what someone is willing to buy it for. Of course most companies will really sell for the market cap, this is because many people who hold the stock think it is worth more than the current price of the stock, so if you wanted to buy the entire company you would have to buy these shares at a higher price. So even this measure of market cap is not a real value.
For me, I own a few companies. The two with the most real assets are my tile business and my computer business. The tile business has about 60k worth of inventory at our landed cost, but we have a contract to sell this tile for 150k to a buyer, we also have exclusive import deals and exclusive sales deals that makes our company worth more. So how do you value this company? Do you do it on the cost or the sales price. What about the deals, do they count?
Next is the computer company. The actual assets of the company are fairly small, this is because the cost of computer hardware always falls so we keep very little in stock, we do have at least 20k tied up in tools, furniture and the computers that we use in the business. But then we have some very valuable assets. First we have connections and relationships to great suppliers, built up over a decade. Next we have over 3000 historic customers, we have over 1000 people on our mailing list and over 400 resellers on our reseller mailing list. Many of these people will usually call us up when they are ready to get a computer. We have systems and processes in place that took years to figure out, so that things get done right and the on time. We have pricing models set up, and vast experience. Almost all of this is heavily documented. We have many domain names and websites, together these get about 200-300 unique hits per day. So how do you value all of these things. With these things we can design a system and send out a mass email and in a day we will have orders coming in.
Now lets take this same idea to individual people. People are much like a small business like my computer company. We have connections, we have systems for getting things done, we have our experiences and mindsets. You also have your education and knowledge which translates directly into ability to make money. There are some people who have assets and these assets took a decade or more to get. While there are others have the tools and knowledge to gain those same huge assets in a very short amount of time, even though they may not currently possess those assets. So, networth is important but it is not the most important thing.
I think of it like poker. Good poker players treat the chips in from of them like ammo. Some times you take risks and it does not work out and you have less ammo. But good players know how to play, they know how to win because they can read other players, they know things that others don’t. In the end they usually win, but of course there is always luck and sometimes they fail. But even when they are down they know how to pop right back up. The have the connections to get money and the knowledge of what to do with it to earn more. During the game the value of what you have in front of you is not nearly as important as your ability to turn that money into something larger. But at the end of the game it is the money sitting in front of you that decides if you won or lost.
Networth is much like this, if you want to be the really big winner at the end, sometimes you have to go “All-In” and risk it all for a great return. Most people play it safe, they never lose big but they also never win big. And in life the bets are never 50-50, if you know what you are doing most of the time the chances are way in your favor.
Tell me what you think please.