Advice on Giving Advice
Archives: Daily Issues
Issue #1981
- WEALTHY: 80 bucks masquerading as $500 (Andrew Gordon)
- HEALTHY: The right stretches for your workout (Virginia Thomas)
- WISE: Agatha Christie on giving advice
ALSO IN THIS ISSUE:
- Here’s a million dollars worth of advice for you (Michael Masterson)
- A marketing test worth doing (David Cross)
- It’s Good to Know… about the world’s largest passenger jet
- Add "putative" to your vocabulary
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The Lights Went Out Before I Could Shout, "Don’t Do It!"
By Andrew M. Gordon
I was at the cinema last week, waiting for the movie to start, when I heard this guy sitting right behind me brag to his female companion about his BIG BRILLIANT IDEA. "It’s great. I’m taking out a $10,000 loan on my credit card for zero percent interest. It’s a 12-month promotional rate, and I’m putting the money into a one-year CD at five percent interest. It’s an easy, no-risk way to bag $500."
I wanted to shout "Don’t do it, man! It’s not what you think!" But just then the lights went out and the theater’s sound system began blaring. When the film ended, I turned around… but the "investor" and his friend were gone.
If I can’t tell him, at least I can tell you: His idea is bound to fail. It won’t work because:
- You have to pay a transaction fee for such a loan – usually three percent upfront. That would be $300, three-fifths of your spread, gone right there.
- Your monthly minimum payment can’t be late – not even once. If it is, your promo rate will likely revert to a draconian rate of more than 20 percent. If that happens, you’d want to get that $10,000 out of your credit card balance pronto. But wait! You can’t! It’s stuck in a one-year CD. You’ve just painted yourself into a money-losing corner.
- You’ll have to pay off the loan (or equivalent card balance) when the promo rate ends. That means you’ll have to make at least one payment before your one-year CD comes due – at the reverted rate of maybe 12 to 15 percent. A payment of at least $120.
If everything goes smoothly, your profit at the end of a year will be not $500 but a measly $80 ($500 minus $300 minus $120) – if, that is, you had made all your monthly payments on time.
Worth it?
Credit cards aren’t opportunities to make money. But they sure can lose you a lot. Stay away from them as much as possible.
[Ed. Note: Andrew Gordon, ETR's financial expert, is the editor of our new investment service, INCOME. Each month, he uncovers income-generating stocks that promise safety (first and foremost), along with much higher-than-average profit potential.]
"Good advice is always certain to be ignored, but that’s no reason not to give it."
Agatha Christie
Advice on Giving Advice From a Compulsive Advice Giver
By Michael Masterson
I love to express my opinions. There’s almost no situation that doesn’t seem to beckon my advice – from traffic jams to international politics. Most of my opinions are worth what everybody else’s opinions are worth, which is to say nearly nothing. But when the subject is business – and in particular small- and medium- sized businesses – my suggestions can be very helpful.
Generally speaking, my business advice is expensive. When asked, as I frequently am, to "take a look" at someone’s business and "provide suggestions," I offer two options: $100,000 for one day or four percent of sales until I’ve been paid $1 million. And so long as the person follows my advice, it’s usually worth it to them.
But you would be amazed at how often people pay for advice or information and then ignore it. They ignore it by either deciding it doesn’t make sense or agreeing that it does but not fully implementing the recommended changes.
Even more people ignore advice – even the best advice – when it’s unsolicited.
Take, for instance, my experience at a new sandwich shop I stumbled upon the last time I was in Nicaragua. I liked the way they designed the window, with the store’s name in big, easy-to-read letters across the entire pane of glass. When I stepped inside, though, I had mixed feelings. I liked the aluminum cafe tables and the sandwich counter at the front, but I didn’t like the low leather sofas in the back.
I sat at the counter, because the four tables were full – and I realized what it was about those sofas that bothered me. People were sort of lounging on them, sipping coffee and working on their computers. As small as it was, this restaurant was trying to be two things, both a bistro and a coffee shop. In attempting to do both, it did neither well.
The problem for the customer who wanted to eat was a lack of tables. You could sit on a sofa and eat – but that would be weird and uncomfortable. You could also sit at the counter, as I was doing. But that’s generally what you do when you’re alone, not when you’re with other people. During the time I sat there eating my sandwich, I saw no fewer than four couples walk into the place, look around, and leave. Meanwhile, the two or three people sitting on the couches were not ordering any food. They were just hanging out there.
I couldn’t restrain myself. After complimenting the owner on his menu and my very tasty sandwich, I asked him if he wouldn’t mind a suggestion. He said he would be happy to hear it. I told him, "Get rid of those sofas and get more tables in here."
He received my advice politely, but it was clear he didn’t like it. When I told him to dump the couches, it was as if I had told him to get rid of his children. It seemed likely that they were his brainstorm and that, as far as he was concerned, they gave his store a unique ambiance that made it special.
Because I wasn’t sure he understood the economic implications of my advice, I suggested that he keep an informal tally of the productivity of each section of his establishment on a square-foot basis. I said I would bet that the area at the front – with the cafe tables and counter – was bringing in three or four times the money as the "lounge." I mentioned, too, that I had seen a number of couples come in and leave… just to drive my point home.
I again complimented him on his food, and wished him luck. I left with a good feeling about this man… but a gut feeling that he would not even consider taking me up on my idea of replacing the couches with more tables.
I am confident that if he does take my advice, his business will improve. And I am equally confident that if he doesn’t, his business will gradually get worse and eventually fail.
The worst possible time to give advice is when someone is just beginning a business. Since nothing good or bad has yet happened, the entrepreneur has nothing to compare your ideas with except his own expectations.
In telling the sandwich shop owner how he should change his store two weeks after it opened, I had a two percent chance of having him listen to me. If I had waited several months – until the place was nearly empty and he was worried – my chances of getting through to him would have been much greater. He might even have been willing to pay for my advice.
But I didn’t wait, because… as I said… I am a compulsive advice giver in just about any situation.
If I had a professional interest in helping him succeed, I would not have given him the solution to his problem. I would have suggested that there didn’t seem to be enough tables, and hoped that his natural powers of observation and intelligence would take over.
That way, when he eventually figured out the solution, he would think it was his own idea and execute it with more conviction.
That’s something I learned from BB, who’s an expert at providing subtle, indirect advice. For him, a strong suggestion would be put into the interrogative, such as, "Have you ever thought about doing such and such?" Usually, his questions are answered in the affirmative: "Yes, I thought about doing it, but decided against it because of [whatever reason]." When he hears this reply, he doesn’t say, "What’s wrong with you? Don’t you know good advice when you hear it?" (That’s what I would be thinking.) He just nods his head and says nothing.
BB taught me that a direct and forceful suggestion can sometimes help. But most of the time, indirection is the better way… even if it works more slowly.
How to Become a Professional (Meaning "Paid") Advisor
Keep in mind that, aside from my compulsive need to give advice to anyone and everyone I encounter, I make a very good living as a professional consultant. If, like me, you enjoy giving advice, you can do it too. If that sounds like something you’d be interested in, you might want to look into the American Consultants League. Meanwhile, here are some basic things you need to know:
- If you want your advice to be worth something, talk about something you know well.
- If you want to make good money giving advice, find customers who can benefit from your advice. The more they can benefit, the more you can charge them for the same advice.
- You don’t need to be passionate about advice-giving to give good advice. (As I’ve mentioned before, being passionate about anything can make you worse at it.
- Give the best advice you can, but don’t become emotionally attached to it. In other words, if your client doesn’t act on your advice – or even seem to appreciate it – don’t agonize over it.
- The best time to give advice is when someone wants it. People usually want advice only when their own ideas have been completely and irrefutably proven wrong.
[Ed. Note: Read more of what Michael has to say about giving advice on his blog.]
And learn how you can be part of an exclusive group of 25 to 50 ambitious businesspeople that he will be leading through an elite 5-day program that can help you dramatically increase the profitability of your business here.]
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Internet Marketing Tip: Getting to Your Customers at the Right Time
By David Cross
We’re buying our next house at the moment – hence, we’ve been looking at mortgages.
The UPS guy arrived today with a priority envelope sent yesterday. It was from our current mortgage company – though we haven’t yet contacted them – offering a great rate and $750 toward our closing costs. Naturally, we’ll check out their deal.
I’m guessing that my current mortgage company has some sort of alert against my credit file. So when I researched mortgages online, they were notified. Privacy concerns entirely aside, this is smart use of existing technology. It allowed my mortgage company to make me a timely, relevant, personalized offer.
How can you use this strategy?
The challenge is to figure out how to use your marketing data to put your offers in front of your customers and prospects at the right time… for them.
So see if you can access your per-customer e-mail opens or click-through information and trigger follow-up mailings based on that. It’s definitely worth a test. Countless tests I’ve performed over the last four years show that sending out an automated e-mail within 24 hours of an initial e-mail marketing campaign – but only to people who opened or clicked on links in the initial e-mail campaign – boosts sales.
[Ed. Note: David Cross is Senior Internet Consultant for Agora, Inc, in Baltimore. David is one of the experts featured on ETR's Internet Marketing DVD Library, where you'll learn dozens of unique and powerful strategies for starting and running a profitable home-based Internet business, attracting throngs of eager customers, earning ten times more from existing customers, and tripling your profits this year.]
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Stretching to Reduce Joint and Muscle Injury
By Virginia Thomas
Proper stretching before and after you exercise is key to getting the most out of your workout. There are different types of stretches, depending on what you are trying to achieve. And the wrong type of stretching on the wrong muscle groups may increase your chances of joint or muscle injury.
- Dynamic stretching
Dynamic stretching – the best type of pre-exercise stretching you can do – targets tight muscles by repeatedly moving into and out of the stretch position until they loosen up. The idea is to move slowly and never stop moving for more than a second or two. Basically, you want to replicate the movement you are about to engage in.
When running, for example, the leg flexes and extends. So you would begin your dynamic stretching before a run by slowly swinging your leg forward and backward, increasing the range of motion with each swing.
- Static stretching
Static holding techniques used to lengthen short muscles may actually sedate the muscles being stretched if done prior to a workout. This is not a desirable result when you’re about to run or play a game of golf. Static stretching, on all the muscle groups involved in an exercise, is best done afterward.
To stretch the calves after a run, for example, step forward with the right leg in a lunge position. Keeping your left leg long and your heel in contact with the ground, slowly bend your right knee until you feel a stretch in the left calf. Hold for 30 to 60 seconds. Then repeat on the other side.
[Ed. Note: Look for Pilates instructor Virginia Thomas at upcoming ETR conferences, where she'll help you stay fit and healthy with massage, exercise, and stretching techniques.]
It’s Good to Know: The World’s Largest Passenger Jet
After several delays, the Airbus A380, a double-decker airplane with a main cabin 20 inches wider than a Boeing 747, is scheduled to enter service with Singapore Airlines in October (with other carriers to follow in coming years). The jet will seat 519, including 443 in economy class. It is intended for long-haul voyages between destinations such as San Francisco and Singapore.
(Source: Business Week)
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Word to the Wise: Putative
Something that’s "putative" (PYOO-tuh-tiv) – from the Latin for "to think/suppose" – is assumed or alleged.
Example (as used by Frances Spalding in Duncan Grant: A Biography): "Certainly, to have even a putative ancestor commemorated by Shakespeare is something about which to boast."
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Michael Masterson
Copyright ETR, LLC, 2007
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