Issue #2343
ALSO IN THIS ISSUE:
Everyone knows caffeine during the day can affect your sleep. But you may not know that there are caffeine-free foods that may have caffeine-like effects on the brain. These foods can even be toxic to your brain. But once you know what to look for, you can avoid them and protect your health.
These foods are sometimes referred to as excitotoxins because they cause over-stimulation, which can lead to nerve cell damage in the brain. And anything that causes increased brain cell activity could counteract your attempts at rest and relaxation. Be aware that excitotoxins come in all shapes and sizes. But here are three common sources:
1. Aspartame. This is the phylalanine-based artificial sweetener often used in soft drinks, diet gelatins, and sugar-free gums and mints.
2. Monosodium glutamate, also known as MSG. MSG is a sodium salt of glutamic acid. It’s found in more than 6,000 processed and preserved foods, often listed on the label as an ingredient that’s "partially processed" or "partially hydrogenated."
3. Natural glutamates. Natural glutamates are found in abundance in both plant and animal protein – and if you’re allergic to any of those foods, they can also act as excitotoxins. Any time your body has an immune response to a particular food, one of the side effects is increased stress hormone production and increased inflammation. And chronically increased stress hormones can affect your sleep.
So if you have trouble sleeping from time to time, the problem could be related to your diet. Keep a food diary to see if you can pinpoint the culprit(s).
[Ed. Note: James B. LaValle, RPh, N.D, C.C.N., is founder of the LaValle Metabolic Institute, a nationally recognized expert on natural therapies, and the author of 13 books on healthy lifestyles and integrative care, including Cracking the Metabolic Code.
By modifying your diet, medications, lifestyle, and exercise habits, and with nutritional supplementation, your health is largely within your control. Dr. LaValle's approach to health has worked for thousands of patients, and it can help you, too. Learn the details here.]
Too bad it wasn’t mandatory for every American to watch the segment 60 Minutes recently did on David Walker, Comptroller General of the United States. Walker heads up the Government Accountability Office (GAO), which acts on behalf of taxpayers to assure a nonpartisan, honest assessment of government operations – especially government spending.
Walker bluntly stated that the most serious threat to the U.S. is not some guy hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility. You know he’s sincere when he says he has given up on elected officials to take responsible action. He truly believes the very survival of the U.S. is at stake if voters do not demand that their elected officials make some hard choices.
To overly simplify it, the catalyst for our fiscal predicament is the eat-drink-and-be-merry bunch affectionately referred to as "baby boomers." If you were born between the end of World War II and the beginning of the Vietnam War, when the "culture of consumption" somehow became synonymous with the American dream, this means you.
Those Florida retirement communities you see advertised on television – the ones where retirees are yukking it up, playing golf, enjoying aerobics classes, and sipping midday cocktails – are where an awful lot of your fellow baby boomers fully intend to be in the not-too-distant future. And when your time comes, you not only won’t want to hear about work, you also won’t be in a mood to hear about medical bills. All you are going to be focused on is that it’s your turn to be supported by the people at the bottom of the pyramid.
Only one problem: The pyramid is upside down. And it’s going to continue to get wider at the top and narrower at the bottom with each passing year. GAO projections make it clear that just over the Horizon of Fiscal Hell, there won’t be enough wage earners to support the Arnold Palmer golf-community folks.
So, when does the sky begin to fall? It’s already falling! The first boomer, Kathleen Casey-Kirschling, stepped up to the Government Retirement Trough on January 1, 2008. And, along with 78 million other boomers right behind her in the entitlements line, she’s looking for her Social Security and Medicare benefits.
Of course, every halfway-informed individual knows that the real culprit is health care costs. Medicare expenses are five times greater than Social Security benefits. So what did President Bush and Congress do to begin whittling away at this draconian problem? They passed a prescription drug bill that added $8 trillion (that’s trillion) to what was already a $15-20 trillion underfunding of the health care system. If you or I did something equivalent to this in our own little worlds, we’d be incarcerated without a trial.
Washington insiders agree that most politicians fully understand the mathematics of impending doom, but they aren’t about to admit it to their constituents. The number-one objective of politicians is to get reelected, and they fully recognize that telling the truth would get them booted off the Washington gravy train rather quickly. They are well aware that voters despise truth, and, in fact, have a penchant for tarring and feathering truth messengers.
Which is why both liberal and (so-called) conservative politicians just keep kicking the entitlements can down the road, hoping upon hope that the painful truth won’t come home to roost until long after they’re out of office. Every politician you see on C-SPAN proposing a new sleight-of-hand "reform" of the Social Security and Medicare programs is lying – and he knows he’s lying.
Nearly 30 years ago, I warned my readers about the inevitable collapse of the vote-driven entitlements system in this country, and proposed a simple solution to the Social Security scam. I said then, and believe even more strongly today, that both Social Security and Medicare must be 100 percent phased out. Better a phase-out than a monumental collapse that would not only cause a great deal of pain, but could very well bring about anarchy – which history tells us is likely to be followed by a dictatorship.
My suggestion was that benefits be slowly phased out at the rate of 2 percent per year. Thus, people just reaching retirement age, who have been paying into and counting on Social Security throughout their working years, would receive 100 percent of their originally promised benefits. People eligible the next year would receive only 98 percent of what was promised to them. And so on. In this way, FDR’s wicked brainchild would disappear completely after 50 years, with fewer and fewer people relying on it along the way.
Unfortunately, humility forces me to admit that there is zero chance the powers that be will adopt a solution remotely resembling the one I proposed. On the contrary, you can count on politicians to keep kicking the can down the road.
Which is why, if you are more than 20 years away from retirement, you’d be wise to assume that when the can rolls to a halt at your feet, there won’t be anyone around to kick it any further.
For me, this is going to be a slam dunk "I told you so."
And that’s when you’ll want to have your own nest egg safely hidden away. The absolute best way to do protect yourself? Start right now by setting up a business that acts as your own personal security blanket. It should throw off a steady stream of passive income for decades – and keep you from counting on an institution that’s crumbling faster every day.
[Ed. Note: In Robert Ringer's powerful personal-development package, The Magic of Synchronicity, you'll find out how to achieve prosperity, purpose, and peace of mind by getting all areas of your life in synch. Plus, get The Best of Robert Ringer, Volumes I & II - absolutely free. Learn more here.
And sign up for Robert's free Voice of Sanity e-letter here.]
There is only one number one, only one best at anything. Thankfully, we live in an environment where even the tenth-best or the hundredth-best business may make some money. But why not try to learn something from the leaders?
Set aside your ego. Recognize that someone may be better than you are at what you do. Admit it – and then set your sights on becoming even better.
Who else makes what you do, sells what you do, or provides the same service you do – and is more successful at it? If you don’t try to understand what they are doing better, you don’t really want to win.
You see, another business fact is that sometimes number one slips and becomes number two or number three. Find a competitor that is more successful than you. Identify what they do better, combine that with your strengths, and then work harder or smarter. And maybe, just maybe, you’ll be number one someday.
[Ed. Note: Author and businessman John L. Herman Jr. ("Herman"), who has owned more than 20 companies, has become an expert on why businesses fail. The above article was excerpted with permission from Hermanisms: Axioms for Business and Life. For more information about Herman and his business writing, please visit Hermanisms.com.]
"I’ve recently started reading your newsletter. Some of your advice sounds great – but help me here. I already get up most mornings at 6.00 a.m. I’m at work by 8.30 a.m. In that time, I’ve taken the dog for a walk, done a load of washing and hung it out, packed lunch for my husband (who leaves at 7.00 a.m.) and children, and then gotten myself and my kids out the door and off for the day. There’s no time at work for me to be working on my own personal goals. You can imagine what it’s like at the other end of the day… not much time left there either!
"I have many goals and lots of things I want to do to further my life financially and otherwise – but how does someone like me fit anything else into a day?
"Realistic advice greatly appreciated!!!"
Anna Power
Sydney, Australia
Dear Anna,
You are the woman every man secretly hopes his wife or girlfriend will turn into. You earn a living, take good care of your family, and do it all before you think about yourself.
I could tell you to get up at 5:00 or 5:30, but I’m going to put that in the What-Kind-of-Male-Chauvanist-Is-He box.
Instead, here’s what I recommend.
Explain to your family that you have dreams too. Remind them that they’ve been benefiting from your selflessness for many years now. Tell them it’s time for them to square the deal.
In the old days, a good man worked eight to 12 hours a day and the wife took care of the home front. Today, we have thrown that model in the dustbin. Women are often expected to contribute to the family’s income. And when they do, that means the man of the family has to kick in around the house.
You work full-time. Your husband does too. You should be splitting the family work 50-50. That means he should be doing the work you do – walking the dog, making meals, and washing clothes – as often as you do. Switch weeks or days, but get him to take on his share of the load.
And your kids – what kind of message are you sending to them? Do you want your daughters to grow up thinking they have to defer their dreams? Do you want your boys to become full-grown men who expect their wives to work 40 to 60 hours a week and pick up their underwear too?
Even in the old days, children were expected to work. All seven of my brothers and sisters had regular chores – daily and weekend chores – that were mandatory. We were taught to be proud of that work. Our parents were kind enough to teach us that working for the family was a good and honorable thing.
My daily job was cleaning the dishes after dinner. My weekend job was scouring the sinks and toilets and bathtub. Nobody could clean a kitchen or bathroom better than I could.
We ironed our own clothes. We made our own lunches. We helped out!
MaryEllen Tribby, ETR’s CEO and Publisher is a working mom. How does she do it? "I get up at 4:45 Monday through Friday, and sleep in on the weekends until 7:00," she says. "I pack school lunches the night before while my husband does the dishes. We split all household duties. For example, I usually do the grocery shopping and he does the cooking. My nine-year-old and seven-year-old pick up their rooms and have very specific jobs around the house. My kids have wanted a dog for years, and we’ll finally get one this year because the two older ones will be able to help out. If we had gotten one sooner, my husband and I would have ended up taking full care of the dog, and that was just not an option for us."
If Mary Ellen can do it – while running a multimillion-dollar business, you can do it too. So get that family of yours into gear. Give them the opportunity to have their wife/mother get some free time every morning to achieve her dreams.
Your life is not a dress rehearsal. It’s a one-time show and you are the star. Act like the star you are and your family will enjoy your glow.
- Michael Masterson
[Ed. Note: Trying to accomplish your goals and take care of all your everyday responsibilities may seem impossible. But you can do it just by putting a few simple strategies to work. Learn the details here.
Send your questions to AskETR@ETRFeedback.com. Include your full name, your hometown and state, and the ETR team may answer you in an upcoming issue.]
"Provender" (PROV-un-dur) is another way of saying "food." The word is derived from the Latin for "a daily allowance of provisions."
Example (as used by Simon Schama in The Guardian): " Frances Trollope, Captain Marryat, Colonel Basil Hall, and Charles Dickens in 1842 all commented on the way Americans wolfed down their provender as fast as possible, cramming the cornbread in their sloppy maws and, worse, doing so in grim silence, punctuated only by the noise of slurps, grunts; scraping knives, and hacking coughs."
Nuts and seeds like cashews, pistachios, and walnuts often get a bad rap for their high fat and calorie content. Yet, as you know from reading Early to Rise, they are among the best foods for igniting metabolism and controlling hunger. Even better than that, nuts and seeds can help protect against three major diseases.
Unlike sugary snacks, nuts and seeds do not spike blood sugar or the fat-storing hormone insulin. Why is this important? As insulin surges into the blood, it removes two anti-aging substances – growth hormone and insulin-like growth factor. Worse, excess blood levels of insulin lead to obesity, heart disease, and Type II diabetes. So choosing snacks – like nuts and seeds – that keep your insulin in check can actually help ward off these three health disasters
[Ed. Note: Shane Ellison is an author, organic chemist, and contributor to ETR's free natural health newsletter. Learn more about how you can beat obesity, heart disease, and diabetes with Shane's AM-PM Fat Loss Discovery package.]
Issue #2342
ALSO IN THIS ISSUE:
If your job requires you to check e-mail more than twice a day, you should probably be looking for a new position. That’s what Michael Masterson told me in a recent editorial meeting.
Customer service reps, IT techs, marketing assistants, and even middle managers – all of these people have to check e-mail constantly for work assignments, to answer questions from co-workers and supervisors, and to deal with crises. If they didn’t, they would probably be fired. Yes, the work they do is necessary for the success of the company. Problem is, because they’re tied to their inboxes, they are unable to focus on the more important aspects of growing a business: new product development, testing new marketing strategies, increasing profits, and the like.
But if you’re in one of these jobs, you don’t have to stay there. Your goal should be a high-level executive position – more freedom, more decision-making capability, more direct influence on your company’s profitability… and a higher income.
Here are several strategies that Michael has talked about in ETR and his books to help you climb the corporate ladder:
E-mail is a useful business tool, but it shouldn’t rule your work and your career. If it does, you need to make a change.
[Ed. Note: Don't be intimidated by the idea of trying to move your career onward and upward. Michael's best-selling book Automatic Wealth for Grads... and Anyone Else Just Starting Out is full of great ideas and advice you can use to get a better position... or move on to a new job. Pick up your copy here.]
As real estate prices fall, the income you get per dollar invested rises. This means greater cash flow and the ability to deliver bigger dividends to your investors.
Dividends (or distributed net income) are usually the main attraction for investors in real estate investment trusts (REITs), and they can be the key benefit you offer to equity investors in your next project.
Let’s see why you might want to shift your emphasis to distributed net income in today’s market.
A Bird in the Hand
Will Rogers said it: "More important than the return on your capital is the return of your capital." During the bull and bubble market, the conservative approach reflected in that statement was very much out of fashion. In today’s market – where so many speculators have lost money – that sentiment is well received once again.
Often, when you pay a dividend (or distribute cash flow) to your equity investors, you are, in effect, returning a piece of their original investment. In fact, in private partnerships, early distributions are typically treated as return of investment capital. So you and your equity investors typically get to defer taxes on distributions for a while.
The investor in an income property gets…
A steady stream of income and the possibility of capital appreciation later, with relatively low risk, is an attractive offer, especially in a marketplace that is otherwise highly volatile.
Key Terms for Evaluating Yield
When you consider income property, there are a few terms you should be familiar with: potential gross income (PGI), gross rent multiplier (GRM), net operating income (NOI), and the capitalization rate (or "cap rate").
Potential Gross Income is just as it sounds. Imagine you have a 10-unit building with market rents of $1,000 per unit. Your PGI is $10,000 a month or $120,000 a year. If you have laundry machines too, and you figure an average revenue from them of $25 per unit, your PGI is then $10,250 per month or $124,000 per year.
Gross Rent Multiplier is a ratio. It’s the purchase price of a property divided by the annual PGI. So if you pay $620,000 for the abovementioned property, you’re paying five times PGI. Your GRM is five.
Net Operating Income is the most important number in all of real estate. It’s your PGI minus vacancy and collection losses minus expenses. Period.
Capitalization Rate is the most quoted number in commercial real estate. It tells you how much income you are getting per dollar invested. Here’s the formula: NOI divided by purchase price equals the cap rate.
Now let’s look at a few key details about using these numbers correctly.
Base Your PGI on Current Numbers – Not Projected or Inflated Figures
When you’re a buyer, work with the lower of actual numbers or market numbers. Here’s what I mean.
Let’s say a seller has that 10-unit building we’re talking about. Two units are vacant. He says you can raise the market rent to $1,100 a month for all the units so that soon you’ll be getting $11,000 a month in rent, plus the $250 in laundry. So, according to him, you should base your offer on a PGI of $11,250 a month or $136,000 a year.
Don’t do it.
Base your offer on current numbers. If he can get $1,100 a month, why doesn’t he? When using the PGI, use the current rents per the owner’s current leases. The only time you wouldn’t do this is if he’s artificially inflated the rents.
For instance, say he has illegally turned the property into a boarding house, renting by the room. You have no intention of using the property that way. So, just because he’s getting $500 per room or $20,000 per month, don’t use those numbers unless you want to operate an illegal boarding house. Instead, use legit market numbers.
If the property would normally have a PGI of $124,000 and in this location you figure a GRM of five or less would be a good deal, then your max offer would be $620,000. If you accepted his numbers based on illegitimate usage, you’d be prepared to pay nearly twice that – even though you were using the same GRM.
Verify the NOI
In commercial property, cap rate is the most common way of determining value and justifying asking and offering prices. But a true cap rate depends on a true NOI – and NOIs are fudged more than government budgets in an election year! To get an accurate gauge of a property’s NOI, you must insist on getting proof from the seller for his numbers, and you must be prepared to do a little number crunching yourself.
Let’s say the seller of our 10-unit building claims he gets NOI of $100,000 a year. Right away, you’d have a strong suspicion he’s overstating the income. After all, you know the PGI is just $124,000. So to really end up with $100,000 in net, his lost rent from vacancy and his expenses would have to total no more than $24,000 – or about one-fifth of his PGI.
As a rule of thumb, you’ll find most apartment buildings have expenses in the neighborhood of 40 percent to 50 percent of the PGI. Add in rent losses due to vacancy of 5 percent to 10 percent of the PGI, and you usually have total expenses and vacancy totaling 50 percent to 60 percent of the PGI. That leaves the rest – 40 percent to 50 percent – for you as net operating income.
So if we assume expenses and vacancy to reach a total of 60 percent of PGI, your NOI would be the remaining 40 percent. Take 40 percent of $124,000 and your NOI is $49,600. If you insist on a minimum cap rate of 8 percent (8 cents in net income for each dollar you invest), then the maximum you would pay for this property would be $620,000.
You would have arrived at that number as follows: NOI/cap rate = maximum offer price… or $49,600/.08 = $620,000.
That can give you a good, quick estimate of what you might pay. But when you get to the offer stage, you’ll want to base it on the actual numbers.
Get Key Docs and Take All Expenses Into Account When Gauging NOI
Ask to see the last few years’ tax returns for the property (or the seller’s schedule E if he owns it in his personal name), bank statements, profit and loss statements, and general ledger. Request current leases and verify them. In your projections, use a conservative vacancy rate of 8 percent to 10 percent. Don’t accept overly cheerful projections of 3 or 4 or even 5 percent. That will just increase the estimated NOI and, hence, your offer price.
Request recent utility bills paid by the owner. Estimate what your property taxes will be based on your purchase price and local millage rate (a tax rate) when determining your NOI. Don’t use his tax rate, since yours will likely go up substantially if you’re buying the property at a higher price than he paid years earlier.
Make sure you account for all expenses you’re likely to incur. If the current owner cuts the lawn and shovels the sidewalks, budget to have someone do that for you. If he manages the property, budget to have someone manage it for you, including handling bookkeeping and taxes.
In other words, base your NOI on having a professionally managed property and not one where you have to do a lot of the maintenance, handyman work, and management.
There is a good deal more to look into when evaluating NOI. I’ll go into it further in future articles. But we’ve just looked at some major points that can help you gauge a true PGI and NOI. When you can do that, you can look for the best priced properties with the highest legitimate cap rates and lowest GRMs in any given area.
Then you can structure deals where you offer investors healthy current yields of 6, 7, 8 percent and more, as well as the prospects for capital gains though amortization and long-term appreciation.
[Ed. Note: Justin Ford is the author of Main Street Millionaire, a value-focused real estate investment program. At ETR's recent Profits in Paradise Wealth-Building Summit, 14 of the world's experts in wealth - including real estate specialists Dave Lindahl, Marko Rubel, and Jim Fleck - divulged their biggest secrets to churning out cash. Take advantage of their proven money-making strategies with ETR's Profits in Paradise DVD Library. Get the details here.]
If your new employer requires you to take a drug test, you’d better not eat any bagels or other baked goods with poppy seeds for breakfast that day. As few as three of the tiny seeds have been known to trigger positive results for opiates (which include heroin and morphine). If you forget, don’t worry. You’ll be able to request an additional test to clear your name.
(Source: Why Do Men Have Nipples?)
A "bugbear" (BUG-bare) is a persistent problem or source of annoyance.
Example (as used by David Cross today): "Or how about another bugbear of mine: Only after you’ve completed a website’s form does it tell you that your phone number should be formatted in a certain way or that your password ‘must contain a minimum of eight letters and numbers, one of which must be a capital letter.’"
Issue #2341
ALSO IN THIS ISSUE:
A few weeks ago, I told you how fiber can help slash CRP – a marker of inflammation and a predictor of future heart disease and diabetes. Now new research shows that enjoying juicy, delicious strawberries can do the same thing.
In the Women’s Health Study, researchers examined the relationship between eating strawberries and the risk of cardiovascular disease and CRP. They found that women who ate two or more servings of strawberries per week had a 14 percent lower risk of elevated CRP (3 mg/L or higher) than women who ate none.
Remember, strawberries are one of the crops most contaminated by pesticides, so be sure the ones you eat are organic. Just one cup of fresh or frozen organic strawberries – tossed on a salad, whirled into a smoothie, or enjoyed fresh from the carton – will give you those two inflammation-slashing servings.
[Ed. Note: Eating strawberries to improve your health? Can't get much easier than that! Kelley Herring - founder and CEO of Healing Gourmet (www.healinggourmet.com) - writes about other simple lifestyle choices that can improve your health in ETR's free natural health e-letter. Learn more here.]
The horse had escaped. And she was chasing the baby goats around the field. And the dogs just ate the bucket of chicken eggs. And I was trying to change a diaper. Then, when I got out into our pasture, I discovered that the water in the sheep’s trough had frozen overnight, and they were bleating and looking forlornly at the ice.
Ten minutes later, everything had calmed down. Crises averted, I returned to my computer and what I had been working on. Just before all hell broke loose, I’d succeeded at the seemingly impossible task of finding a string of connecting flights between the U.S. and three European countries for a business trip I am making this summer.
I was at the "click to book" point.
[click]…
"We are sorry but your session has timed-out due to inactivity."
"Inactivity! What the…?"
Twenty minutes later, I finally managed to get the entire trip booked. That frustrating little incident got me thinking about how websites so often let down their visitors – and what more you can, and should, be doing for your own customers.
Life happens – and it often gets in the way. But how many websites actually take that fact into consideration? For instance, why don’t website forms with a time restriction offer the user the ability to save what they’ve already entered if they’re unexpectedly called away before they’re done?
Or how about another bugbear of mine: Only after you’ve completed a website’s form does it tell you that your phone number should be formatted in a certain way or that your password "must contain a minimum of eight letters and numbers, one of which must be a capital letter." Or that you must not enter your credit card number with any spaces. Er… um… but mine HAS a space in it.
Take a look at your own website right now. Look at it through your customers’ eyes. And see if any of these little gremlins are lurking – places where you or your programmer made an assumption about what your customers should already know. And then vanquish those hidden problems forever.
[Ed. Note: David Cross is Senior Internet Consultant for Agora Inc. There's a lot you may not know about building an Internet business. David has the answers - and he'll be sharing them with an exclusive group of business builders at ETR's 5 Days in July conference. If you have the slightest interest in creating a fully functioning Internet business in one week, sign up for our hotlist right here.]
Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn’t, you try something else.
This approach lent its name to my most recent best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.
As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.
The Ready, Fire, Aim approach obviously doesn’t apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.
Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:
Most people start businesses the first way. That’s why most businesses fail.
But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don’t have to worry about all the other problems that will arise in the natural course of business. You won’t have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.
Here, in a nutshell, is what I mean by Ready, Fire, Aim:
Ready: Get your product idea ready. Make it good enough to sell. Don’t worry about making it perfect. There will be time enough for that later.
Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).
Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through "back-end" marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.
That is the cycle of a successful start-up venture.
Ready, Fire, Aim doesn’t mean you are willing to be sloppy. Nor does it mean you are willing to sell second-rate products to your customers. On the contrary, Ready, Fire, Aim is the only truly practical way to find out what your market really wants from you.
And for a small business, Ready, Fire, Aim is the best way to get from good to great.
Think of it this way: When we say we have "a great new product idea," what do we really mean? When I say that, I mean I have a strong feeling that the product will sell well – that it will be a big, commercial success.
But the truth is, I have only a hunch about how well my idea will do. Experience has taught me that my hunches are often right… but not always. If I spend too much time and energy preparing a business based on a hunch, what happens if the hunch doesn’t pan out?
What happens is that I’m left with nothing – no money or materials or energy – to start over again. The essence of entrepreneurship is the ability to try and fail and then try again. You can’t do that if you blow your wad the first time you try.
So nowadays when I get the feeling that I have a great idea, I figure out how I can test that idea as quickly and as cheaply as possible.
Once I know the idea has "legs," then I can roll out a sales program. And once a successful sales program is underway, I can refine and improve the product. The truth is, I can never perfect a product in isolation. I used to think I could, but, once again, experience has taught me the arrogance of that kind of thinking.
To get from good to great, you need the help of superstar employees and, most of all, feedback from your customers. The best customer feedback comes not from surveys or focus groups but from marketing results. Find out what your customers want by selling things to them. This gets you back into the Ready, Fire, Aim loop.
If I had to pick one thing – one characteristic or quality of my work that is most responsible for the success I’ve had launching businesses – I’d have to say it was this Ready, Fire, Aim approach. It’s something I believe in strongly. That’s why I wince when I read the start-up advice of so many "experts" who advocate feel-good busywork over selling.
I was hoping that when Ready, Fire, Aim was published we’d see no more foolishness of this type in the business press. But here’s just a short list of the misguided (and even ridiculous) advice I’ve read since my book came out in January of this year:
Do these things before you find out whether your product can sell, and your business is practically guaranteed to fail.
Again, here’s my advice for starting a business:
[Ed. Note: There's a TON of foolish business advice floating around the Internet and in bookstores. You can get proven, time-tested recommendations for starting and growing a business (from someone who's built dozens of businesses himself) in Michael's New York Times, Wall Street Journal, and Business Week best-seller Ready, Fire, Aim. Buy it here.]
To make money on stocks, go where the growth is. Right now, the so-called frontier markets are hogging it. For example, the Kuwait exchange is up 335 percent over the past five years. Nairobi is up 190 percent. And Nepal has more than doubled.
These are the smaller, somewhat-less-developed "emerging-market" countries. They’re still climbing. On the other hand, many bigger emerging-market countries have fallen alongside the U.S. markets.
So how to invest? The ETF that invests most in these markets is the SPDR S&P Emerging Middle East & Africa (GAF) fund. You may think its 56 percent exposure to South Africa invalidates its frontier-markets credentials. Not true. South African companies are increasingly spreading their wings into other parts of Africa. GAF is a nice combination of emerging and frontier markets. Until Vietnam and some of the other frontier-market countries get their own dedicated ETFs, GAF is the best way to leverage their super-fast growth.
[Ed. Note: ETR's Investment Director, Andrew Gordon, is the editor of INCOME, monthly financial advisory services that uncover stocks with remarkable upside and safety.]
If you can’t sell your product or service, you don’t have a business. Plain and simple. So, as Michael Masterson has said in ETR and in Ready, Fire, Aim, your primary concern has to be making sales. Even if you have a good product or service – one that is in demand – you can’t force people to buy from you.
The customer has the advantage. And if she wants to ignore you and spend her money elsewhere, you can’t stop her. But what you can do is give her a reason to choose you over your competitors.
As a small-business owner, you don’t have a whole lot of business-building tools at your disposal. In terms of resources, a small business just can’t stand up to a mega-corporation. But you don’t need a lot of money or employees to find – and keep – customers. You just need a few easy-to-come-by strategies.
In fact, being small can actually work to your advantage when it comes to one of the all-time best strategies: establishing a relationship with each customer. It can:
You develop relationships with your customers the same way that you do it in your personal life. In big part, that means caring for them.
Think about the people you consider to be friends. Aren’t they people you genuinely care about – and who seem to genuinely care about you?
And think about your relationships with companies – big and small – that you deal with on a fairly regular basis
You must admit that it’s awfully hard to believe that the mega-corporations – General Motors, for example – care about you. They are nameless, faceless conglomerates. It’s a lot easier to believe that your local car salesman has a sincere interest in you. After all, he lives in your community. His kids go to school with your kids. You meet him face to face when you step into his dealership. That’s why, unlike General Motors, he can – if he chooses – establish real, caring long-term relationships with you and his other customers.
And that’s why you, too, will have any easy time proving to your customers that you are concerned about them and their problems… and that you’re there to help.
With blogs and social networking sites like MySpace and FaceBook, there are more ways than ever to communicate with your customers – and allow them to actually interact with you. You’ve been reading articles in ETR about how to use these new channels to increase your profitability (and will be reading more in the near future). Meanwhile, try this classic three-step method for establishing those all-important customer relationships:
1. Focus on a narrow niche market.
I publish informational programs for wannabe entrepreneurs who want to start up and run one or more businesses on a shoestring. Since I’m not trying to cater to all entrepreneurs, I can focus very specifically on what my customers want and need. Because it is obvious that I am devoting my time and energy to helping only people like them, it is clear that I sincerely care about their success.
Customers will believe that you genuinely care about them when they have a reasonable basis for that belief. By specializing in delivering a product or service that is aimed directly at them, you take an immediate step in that direction.
2. Take the time to understand your customers and their problems.
Only by putting yourself in your customers’ shoes – taking the time to figure out not only their wants and needs but also their worries, fears, and hopes – can you develop products or services that will truly help them.
When you do that – when you give them something that will make their lives better or easier in some way – you’re sending a very strong message that you care. This is especially true if you continue to develop new products or services for them.
I’ve got a catalog of about a dozen different programs that I offer my customers – covering a wide range of businesses they can get into with little capital or experience. That way, I’m able to give them exactly what they’re looking (and hoping) for.
3. Make your promotional messages personal.
Building close relationships with customers is all about communicating on a personal level (as it is with family and friends). That’s true of any direct contact you may have with your customers in person or over the phone – and it’s just as true of the indirect contact you have with them in your marketing materials.
Here are a few suggestions for making your sales copy more personal:
Write your sales message in a conversational tone, as if you’re talking to a friend. For example, instead of saying "This business program can help entrepreneurs earn substantial profits," say "You know that new car you’ve had your eye on? Well, check out this program. It will help you get it."
Share information about yourself. When people feel that they know you, they’re more inclined to trust you and want to do business with you.
In my marketing copy, I frequently admit what a slow starter I was… how I was in my late twenties and was pretty much broke before I started my first successful business. When my prospective customers hear things like that about me, they sympathize with what I went through. And that makes them feel closer to me.
Be honest. Say what you really think, not what you think your customers want to hear.
For instance, instead of sugarcoating my sales pitch, I come right out and tell my prospects to stop feeling sorry for themselves… to stop blaming their past failures on bad luck and, instead, to take responsibility for whether they will succeed or fail in the future. I’m sure that turns a lot of people off. But, hey, you can’t please everyone. And those who see things your way will become profoundly loyal to you – and rightfully so.
You can’t pretend to be someone you’re not. Your sincerity – or insincerity – will always shine through.
These three steps will help you quickly establish real rapport with your customers. And not only will they willingly pull out their credit cards to make that first purchase… they will be loyal customers for years.
[Ed. Note: Michael Masterson calls Paul Lawrence "the best guy in the business for starting a business on a shoestring." Paul is the creator of the Quick and Easy Microbusiness System, ETR's program for starting a business for under $100. He is also the publisher of the Street Smart Business program, which has dozens of "no nonsense" tactics for the small-business entrepreneur. Check out the details here.]
While many species are on the brink of extinction, scientists are discovering species they never knew existed… including these:
(Source: Cryptomundo)
ETR reader SR in New York recently wrote, "I read that most sunscreens contain a chemical that acts like estrogen in the body. Could this be harmful? And should I avoid sunscreen? I’m heading to Florida in a few weeks and don’t want to get burned."
The Dangers of Sunscreen
The answer is yes. Almost all commercial sunscreens contain not just one but several chemicals, known as xenoestrogens, that mimic the hormone estrogen. Your Best Health Under the Sun, a book I wrote with Dr. Al Sears, highlights a Swiss study that found five of these chemicals in commonly used sunscreens:
In laboratory testing, each one of these chemicals behaves like estrogen. And when they are combined, they can have a synergistic effect. In other words, two "weak" xenoestrogens can produce a very strong response.
Not only does this disrupt the hormonal system, but these chemicals are known to stimulate tumor growth and the spread of cancer. (Not to mention a decline in male sperm count, early puberty, and feminine characteristics in men.)
And don’t think you’re safe just because you don’t "ingest" these chemicals. Clinical studies show that they easily penetrate the skin and enter the bloodstream.
Whenever possible, you should avoid using chemical sunscreen. Protect yourself from sunburn with clothing and shade. And when it is necessary to use sunscreen, look for a chemical-free product with zinc oxide as the active ingredient. (You can find several brands at health food stores.)
[Ed. Note: Now you know one danger of sunscreen. But does that mean you should skip the sun altogether? Absolutely not. Dr. Al Sears and Jon Herring reveal the amazing, life-saving benefits of sunshine in Your Best Health Under the Sun.]
I can almost guarantee that you’ve read or heard this mistake:
As in the above examples, the word notoriety is sometimes used as if it means fame. In fact, it means fame for the wrong reasons, such as criminality or other bad behavior. Similarly, the adjective notorious is pejorative, referring to an unfavorable reputation. Synonyms are infamy and infamous.
Interestingly, those who misuse the word were once right – about 500 years ago. The Latin root simply means well known. Even today, some dictionaries claim that the word means "good" fame or wide recognition.
Don’t believe them. The meaning has changed, and it makes no sense to insist that it hasn’t. What’s more, it’s always wise to avoid ambiguity.
But even better reasons exist for respecting this distinction. Calling someone notorious – when you mean famous – could lead to serious problems. A Canadian Broadcasting Corporation producer wrote his staff a memo warning about the possible legal consequences of this misuse on the air.
I agree with Paul Brians, an English professor who maintains a website devoted to language use and abuse: "Nothing admirable should be called ‘notorious.’"
[Ed Note: For more than three decades, Don Hauptman was a direct-response copywriter. He is author of the wordplay books Cruel and Unusual Puns and Acronymania, and is now writing a new book that also blends language and humor.]
Issue #2340
ALSO IN THIS ISSUE:
Maybe you know we’re in a bear market. But do you know what stage of the bear we’re in?
Courtesy of Howard Marks, chairman of Oaktree Capital Management, a Los Angeles firm that manages more than $50 billion in alternative investments, here’s an easy-to-understand and very useful breakdown:
Stage 1. Just a few prudent investors recognize that, despite the prevailing bullishness, things won’t always be rosy.
Stage 2. Most investors recognize that things are deteriorating.
Stage 3. Everyone’s convinced that things can only get worse.
The middle stage – the one we’re in now – is the easiest of the three to recognize. Identifying Stage 3 is trickier.
For example, for a few days – when Bear Stearns was heading for bankruptcy… global markets were tanking… commodity prices were down… housing was still scraping bottom… and company profits were disappearing – I thought we were just about to enter Stage 3. But then housing got a bit of good news and JPMorgan decided to buy Bear Stearns. And BOOM – just like that – the optimists were saying that things weren’t bad after all.
When investors are tearing their hair out… when no one can see light at the end of the tunnel… when a permanent bear market is declared possible… that’s when we’re in Stage 3. And not before.
The best time to invest? Stage 3, when the market is at its cheapest and is about to go up.
So how many of your fellow ETR readers will invest in Stage 3? I’d guess 5 percent at the most.
It’s incredibly hard to jump into a market when others are fleeing at warp speed. To even have a shot at it, you need to write a note to yourself right now and show it to someone you trust (like your spouse). Ask them to remind you, when the time comes, that you swore you would do this.
[Ed. Note: ETR's Investment Director, Andrew Gordon, is the editor of INCOME, a monthly financial advisory service that uncovers income-generating stocks that promise safety (first and foremost), along with much-higher-than-average profit potential.]
In a recent article, I revealed the early-morning routine I’ve used to accomplish my goals. Sonja Mahs from Brisbane, Queensland, Australia wrote in, wondering where family responsibility fits into the mix:
"Read your article about what you do during the day. Sounds great, if a little self-absorbed. Where does family responsibility come in? And who cooks dinner for you? I wish you would make it more transparent that you don’t have children in your care or that, if you do, you don’t have them on your priority list. It’s irritating to keep reading about how much you achieve and, by extension, how much we can all achieve if we did what you did… while ignoring your own privilege of gender and access to resources. I think it also diminishes your message somewhat."
Sonja is right. I should have pointed out that K and I are empty-nesters now. Longtime readers of ETR and my blog know this. I talk about it all the time. But a new reader could not have known.
That said, it is entirely possible to get up earlier and spend time on yourself – on your own goals – even if you do have children and a spouse. (I assume Sonja is a working mom.)
Assuming you get up at 6:00 now, is it impossible to get up at 5:30? The simple way to do that without jeopardizing your health is to get to bed a half-hour earlier.
This ties into a question I received from Tanya Leehans in Tennessee:
"I am wondering what time you get to sleep each night in order to be up and going no later than 6:30 a.m. After dinner, baths, clean-up, and putting three kids to bed, I want to spend some alone time with my husband. That means midnight sleep at the earliest. Getting up at 6:30 a.m. would mean an awfully small amount of sleep each night. What are your thoughts on that? How do you get enough sleep and make it all work?"
My thought is that if your kids are young enough to need help in the morning, they should be in bed no later than 9:00. That was bedtime for kids in the Masterson house. And it left K and me with 90 minutes to ourselves before going to sleep at 10:30. Seven hours of sleep is what experts say is optimal for adults. So getting up at 5:30 wasn’t a problem. I kept that schedule for many years when my kids were still at home and I liked it. You could like it too.
Listen – getting up early and devoting time to yourself is about you, not me. I can understand why Sonja’s initial reaction to my message was "that self-absorbed, insensitive son of a bitch." But she should think about it some more. What’s really going on? Why is she allowing herself to accept less of her life than she can have? Wouldn’t it benefit her to get that extra time to achieve her dreams?
If she wants it, she can have it.
[Ed. Note: You CAN find time to accomplish your longest-held goals. Learn dozens of specific strategies for rearranging your day and putting your top priorities first with ETR's Total Success Achievement program. Get the details here.]
Some cooking methods can release disease-causing toxins called AGEs (advanced glycation end products). And other methods can maximize the antioxidant ability of certain foods, unleashing their anti-aging potential.
A recent study published in the American Journal of Clinical Nutrition evaluated the antioxidant content of foods after they were prepared in several different ways. Based on the results of that study, here’s how to get far more free-radical fighting ability out of some of your favorites than they have when they’re raw:
[Ed. Note: Kelley Herring is founder and CEO of Healing Gourmet (www.healinggourmet.com). Simple choices - like how you cook your food - can make all the difference in the world when it comes to your health. Get more easy-to-follow suggestions for improving your health by signing up for ETR's free natural health e-letter. Learn more here.]
At least one of the world’s estimated 6,000 languages goes extinct every two weeks. Native speakers either die off or assimilate into larger cultures over several generations. Most of the disappearing languages are spoken by very few (in some cases, just one person) – usually tribal people who are moving into the modern world. Extinction hotspots include the Pacific Northwest, Oklahoma (home of the highest density of indigenous languages in the U.S.), several parts of South America, northern Australia, and eastern Siberia.
(Source: National Geographic)