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Why Higher Pricing Sells

Monday, November 2nd, 2009

People like to feel superior. As a marketer, understanding this universal desire can help you do an awful lot of selling.

By appealing to your prospects’ pride, you can persuade them to pay more — sometimes much more — than what you could get by appealing to any other emotion.

Let’s talk watches.

For $10, you can buy a handsome digital sports watch that will outperform and outlast virtually any luxury watch made. When these watches were first introduced (over 20 years ago), they were so good and cheap that everyone predicted the demise of the analog timepiece.

Well, it didn’t happen. The new technology revolutionized the watch industry and changed the market forever. But analog watches survived. In fact, according to one estimate, sales of $1,000-plus watches have more than doubled since the 1970s and continue to grow every year.

It’s Not Simply a Matter of Dollars and Cents

Why do people pay thousands for watches when a $29 one works just as well and looks great? (By the way, have you taken an objective look at some of the fancier Rolexes lately? Tack-eeee. Piagets? Like a muscleman in a tutu.) I like the look of the expensive watch I bought in Paris, but I’ve had to have it repaired twice in two years. And boy did they charge me for that!

It’s not reliability. It’s not durability. It’s not precision. And it’s not beauty. So what does all that extra money buy?

In a word, prestige. Slap on an Ebel or a Cartier and you have instant credibility with the fashion police. Thrust out a Rolex-clad wrist and you announce to all those around you, “I have arrived.”

You need not say a word. What could be better than that?

The idea that price equates to quality is a myth. But price does relate to value. In the case of luxury goods, that value is prestige.
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What Is the Tipping Point for Online Success?

Friday, October 30th, 2009

KJ, like many of my subscribers these days, wants to get into Internet marketing. But she feels frustrated and unable to move forward.

“Where should I begin?” KJ asked in her e-mail. “What was your tipping point to online success?”

My answer: “The tipping point in Internet marketing success is to stop reading about it and stop talking about it and actually start DOING it.” (more…)

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What’s More Important in Marketing?

Wednesday, October 28th, 2009

Products — the most successful products — meet urgent needs and solve important problems.

But what solves today’s problem won’t necessarily solve tomorrow’s. We must constantly refine and reinvent to make our products “new.” (more…)

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The Junkie’s Secret

Monday, October 26th, 2009

As a teenager, I had the impulses of a junkyard dog. If someone looked at me the “wrong” way, I started barking. This resulted in many scraps — most of them with bigger and more skillful fighters. I managed to “win” a great many of them, however, because I was able to tap into something inside me that fueled my aggression. (more…)

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What It Really Takes To Become Wealthy

Thursday, October 22nd, 2009

“I don’t have your attitude,” Jeff said to me. “I just don’t have the mindset of someone who can make a lot of money.”

“Do you want to make a lot of money?” I asked him.

“That’s the sad thing,” he said, smiling wryly. “I do.” (more…)

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The Beginning of Wisdom

Tuesday, September 8th, 2009

I watched in horror as my 11-year-old daughter Hannah plunged 150 feet down Cheakamus Canyon toward the river raging below.

My wife Karen and I had both tried to talk her out of it. But she wouldn’t be dissuaded.

She wanted to jump.

Of course, she was attached to a bungee cord, one that “exceeded Australian specifications” (whatever that means). And Whistler Bungee — an hour north of Vancouver and just below Whistler’s 2010 Olympic Village — has been in business for seven years with a perfect safety record.

Still … I got the willies just looking down through the 300-foot span as we crossed it. This was a murderous height. It would have taken at least three burly men to get me out on that platform.

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If You Don’t Know, Don’t Say

Wednesday, August 26th, 2009

I was returning from a flight to Florida’s West Coast. I was five miles out of Orlando Executive (my home airport), and winds were only 5 to 7 knots. But they were coming at an angle that was going to make landing difficult for the runway air traffic control had assigned.

I felt confident I could do it. But, whenever possible, I ask for the runway that makes landing my plane as safe and easy as possible.

I called the controller and made the request, but it was denied. So I went ahead and landed on the other runway.

Before I did, though, I called the controller again and asked for a “time check.” That told him I was not happy and would be speaking with a supervisor. Among other things, the “time check” provides the supervisor with a way to review on-air exchanges between a particular controller and pilot. (Those exchanges are recorded, and I know to be careful to say only what can be used for me and not against me.)

My gut feeling was that the controller didn’t want to do the work involved in switching runways for me. It was late afternoon, right around time for a shift change. But since I couldn’t be sure of his reason for denying my request, I decided to hold off judgment until I had spoken with his supervisor. The supervisor called me the next morning. Long story short, I got an apology from the controller on duty for not having given me the okay. More important, I established a relationship with the supervisor — an articulate, intelligent, savvy guy. He recognized the unique qualities of my plane, and understood why I preferred to land with its nose into the wind. He also agreed with me that a pilot coming in to his home airport should get special consideration.
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An Income-Doubling Secret of the Wealthy

Saturday, July 25th, 2009

Wealthy people have a secret that makes it easy for them to dramatically increase their income. You instinctively know this secret… and are probably even using it without realizing it.

What is it? Leverage.

When people order in pizza for dinner, they are leveraging the resources of a local pizza place – its staff and food, as well as its delivery service. When parents with young kids enjoy an evening out, they are leveraging the time of a babysitter. When a businessman hops into a taxi, he is leveraging the driving skills of the cabbie.

Here’s how you can leverage other people’s resources, time, and skills to increase your success in business:

  • Think of the work you do. Then think of ways that others already support you in getting that work done. Does your secretary help you get to meetings on time? Does a colleague with a flair for math help you balance your expense account at the end of the month? Is there more that these people could do to help you?
  • Think of tasks you do that you are not particularly good at – perhaps PowerPoint presentations or writing memos. Can these tasks be done by others?
  • Find a way to get help with just one task from just one person. Maybe ask your company’s graphic designer to help you beautify your product presentation… or forward your next memo to a staff writer for some editing and polish.

Start with one way to leverage someone else’s help. Measure your success. Celebrate your success.

Then find one more way… then another… and then another.

That’s what I do. That’s what every successful person does. Now, you are doing it too!

[Ed. Note: A well-known international speaker, Raymond Aaron is the author of seven books, including the New York Times bestseller Chicken Soup for the Parent's Soul. Get two free chapters of his latest book - Double Your Income Doing What You Love - at RaymondAaron.com.

Ready for even more success techniques for achieving your goals? Check out Early to Rise's Total Success Achievement program to get your plan of action and start changing your life today.]

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A Little-Known Secret of the Truly Wealthy

Friday, July 10th, 2009

Carlos, one of my Jiu Jitsu instructors, is living the American dream. He came to this country to compete in mixed martial arts and earn his fortune as a champion fighter. While building a stellar win-loss record, he lived on club sponsorship and fees for giving lessons. For the first three years of his time here, he managed to support himself and his wife on less than $15,000 a year. Recently, he captured three title belts – and now fights at the top level in Japan. His typical payday has gone from $500 to $25,000.

“The problem with making more money in America,” he told me, “is that every time you make an extra dollar you spend two.”

How true. The first couch I bought cost $400. I remember thinking, “It doesn’t get any better than this.” And it never did. The couches I buy today give me no more pleasure, comfort, or space. Yet they cost much more.

What happened? The truth is that my own success has victimized me. In earning more, I allowed myself to spend more on things like couches. If I had gotten more out of it, that would have been fine. But I didn’t.

Why do we do it? Why do we feel the need to spend more when we make more?

Here’s what I think. When you are poor, you are surrounded by things you think you would like to own but cannot afford to buy. After a while, you equate the feeling of unsatisfied desire with poverty. And when desiring begins to feel poor, having seems like it will make you feel rich.

Master wealth builders understand a secret that it took me years to learn: You have to keep your spending down while your income increases.

[Ed. Note: This article is an excerpt from Michael Masterson's bestselling book, Automatic Wealth: The 6 Steps to Financial Independence. For more insights into becoming - and staying - wealthy, check it out today.]

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How Anyone Can Build Revenue-Generating Websites – Even You!

Tuesday, May 26th, 2009

Imagine this scenario… 

You wake up in the morning with a great moneymaking idea. All you need is a website and some traffic and you’re onto a surefire winner. 

You switch on your computer and tap away at the keyboard for a couple of hours. Lunchtime arrives, and you’ve already got yourself a great looking website. 

Another 10 minutes is spent choosing a domain name and signing up for a hosting account. 

Just before you take a break to eat your lunch, you press the “publish” button and your brand-new website is live on the Internet, ready for business. 

How great would that be? 

From idea to reality in less than four hours. 

This may sound too good to be true, but for many people it’s far from a dream. It is happening every day of the week, all around the globe. 

“But…” I can hear you saying “… I’m just not technically minded.” 

Before you let that put you off, let me introduce you to Sarah, a 79-year-old lady who recently posted the following message on the XSitePro Messageboard: 

“At 79 years of age I was beginning to despair. Webmasters are young, highly intelligent, creative, irresponsible, indispensable human beings to people like me, who, 29 years into retirement, enjoys owning websites and receiving cheques every month. Fortunately, a week ago, I found this software, bought it, and have already built 15, or so, of my sites. Absolutely, stunningly, astonishingly brilliant for someone who does not even know what code looks like.” 

Isn’t that amazing? 

Now, if Sarah’s story hasn’t inspired you to get going, let me debunk four common myths that put many people off building their own websites. 

Myth #1 – You need to be a designer. 

Definitely not true! 

Most great website “designers” are not designers at all – they’re just good at copying what works. They take a look at what other successful websites are doing and then use a similar layout, the same fonts, etc. In other words, they don’t reinvent the wheel, they leverage what has been proved to work.

If you can look at other websites in your chosen niche you can do exactly the same. 

Myth #2 – You need years of training. 

Building websites doesn’t require the learned mind of a lawyer or doctor. It doesn’t need you to be as hands-on practical as a plumber or electrician, either. You don’t need to go to college for four years to learn the requisite skills to build a website. You don’t even need to go part-time.

Any person of reasonable intelligence can learn to build great looking websites in less than a week, if they have the desire and a willingness to learn a new skill.

Myth #3 – You need to outsource the site’s creation. 

There are two important points to remember when it comes to outsourcing.

First, it is very easy to be taken advantage of when you’re outsourcing something you know absolutely nothing about. I can’t count the number of times that people have told me they’d paid several hundred dollars (sometimes even thousands) for a five-page website that shouldn’t have taken more than a couple of hours to build. And that just seems like too high an hourly rate to me.

Second, even if you do choose to outsource your website building, in the long run it is essential for you to have the skills necessary to make minor updates yourself. Otherwise you’ll end up paying out each and every time you need to change anything. Lots of people who outsource forget this, and then begrudge having to keep spending money every time they want to make a change.

It reminds me of an age-old Chinese proverb: ”Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” 

And with the skills so readily accessible, for such a small investment of time and money, it seems crazy to tackle your website creation and management in any other way than by learning to do it yourself.

Myth #4 – You need to be technically inclined. 

This is probably the number one reason why many people are scared to build their own websites. But don’t let it put you off. Remember, if 79-year-old Sarah can master building websites, you can too!

Agreed, some people are more technically inclined than others. But if you can follow basic instructions, you can build your own websites – and that’s a fact. Yes, it may take a little practice. But it is a wonderful new skill to acquire, and it is one that you will have for the rest of your life.

My hope is that now that I’ve busted those four common myths, you’ll have the confidence to take a big step forward and grab yourself a big chunk of that virtual real estate in the increasingly online world in which we live.

Oh, I almost forgot to mention… one of the most important reasons why building a website is a great skill to learn is that it’s FUN too! Just imagine how exciting it would be to be able to build a site for your son’s Little League team… or a site about the sponsored walk you’re about to embark upon… or a site about the history of your family… or about your favorite hobby.

Building websites isn’t just about business, it’s a life skill that will benefit you in oh so many ways.

[Ed. Note: Online marketing expert Paul Smithson is the creator of the XSitePro website-building software.

This July, Paul and ETR's team of Internet marketers will be teaching an elite group of ETR readers how to build their own online businesses from scratch. You will leave the conference with your own fully functioning Internet business - website and all. We've already sold over half the spots we have available, so if you're interested in attending, learn more right now.]

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Money Matters

Tuesday, May 26th, 2009

One of the most interesting things I learned from the individuals I knew who became billionaires is that they considered every dollar to be valuable. Money was a means to advance their goals – in particular, the goal to become wealthy. And you don’t become wealthy by being careless with any amount of money.

I’ll give you an example.

About 15 years ago, I was working with a successful hotel magnate who was opening a convention center. One of the things that had to be installed was an industrial dishwasher – and, at the time, industrial dishwashers retailed for around $40,000.

Millions of dollars were being spent, so you’d think he would have just given his team a quick okay to go ahead and make the purchase.

But no. Experience had taught him that rebuilt equipment was just as good as new. So he had his team do some research to see what it would cost for a rebuilt dishwasher (same make and model).

They found one that was selling for $7,500, and they snapped it right up – for a savings of $32,500 that could be allocated elsewhere.

You should do the same, whether you’re dealing with your business, family, or personal budget. You should always be looking for ways to spend less (or not buy at all). Because every dollar adds up, especially when your goal is to be wealthy.

[Ed. Note: In the next 11 minutes, you could be well on your way to making an extra $100K, $500K, or even $1 million by this time next year. Get specific advice from Bob "Mentor to Billionaires" Cox about how to change your life and increase your wealth. Find out more here. ]

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What Products and Services Sell Best in a Recession?

Friday, May 22nd, 2009

What products and services sell best in a recession?

Hint: This is not a trick question. The answer is the one that immediately popped into your head when I asked it.

Before you started over-analyzing this…

The products and services that sell best in a recession are the cheaper ones. That’s right – the ones that cost less.

I recently read in a biography of Milton Hershey that he believed his business was recession-proof and depression-proof because he sold an affordable product. He reasoned that, even if a person couldn’t afford new shoes or a new car or a vacation, they could always afford a nickel for a Hershey’s chocolate bar. (That was the price in those days.)

Milton Hershey was right.

According to an article in Ad News, as the economy continued to tank in the fourth quarter of 2008, the Hershey company increased its advertising budget by 23 percent. And as consumers switched from expensive premium chocolates they no longer felt they could afford to Hershey’s, the company’s net income for the fourth quarter of 2008 rose 51 percent to $82 million.

Similarly, with the restaurant business in its worst slump since 1991, McDonald’s worldwide sales rose 7.1 percent in January 2009. Diners may not be able to afford steak anymore, but they can still afford a Big Mac.

I have found the same thing – consumer preference for lower-priced goods and services during an economic downturn – to hold true for the two little businesses I run: information marketing and freelance copywriting.

In my online publishing business, my low-priced products are e-books selling in the $19 to $79 range. My mid-range products are DVD and audio CD albums selling in the $100 to $150 range. And my high-end products are multimedia programs selling in the $300 to $1,000 range.

In recent months, my customers have clearly been telling me that (a) they are worried about money, (b) they really appreciate my reasonable prices, and (c) for now, they prefer offers for low-priced products.

They are not asking for special discounts or “recession sales.” They just want me to focus on offering products that sell for under $100, which seems to be the magic recession-proof price point for my market.

Whenever I advertise mid-range or high-priced products to my customer list, I always get at least one e-mail from a reader telling me she wants to buy the product… but can’t because she has lost her job!

If you are an information marketer, I suggest that, rather than fighting this trend, you accommodate your customers by:

• Expanding your product line, especially with the lower-priced products (like e-books).

• Offering your readers more free content (such as special reports and teleseminars).

• Bundling products into packages that enable customers to get related materials at handsome discounts (e.g., buy two e-books, get the third one free).

I am also finding that offering low-priced service options works for my freelance copywriting business.

To make $10,000 as a freelancer, you can either do one $10,000 project or five $2,000 projects. These days, I am doing a lot more $2,000 projects for clients who want to continue their marketing but are focused on controlling costs.

For instance, I am saving my clients money by helping them do more marketing online and a bit less offline. We are also using marketing methods that can be tested at minimal cost before rolling out the campaigns (e.g., small test mailings of 1,000 instead of 10,000).

One thing that has worked especially well is a new service bundle I call the “Starter Package.”

Normally, I charge $500 an hour for consulting. With a 10-hour minimum, payable in full in advance, that works out to $5,000 – affordable in normal times, not so affordable during an economic crisis. With the Starter Package, I offer new clients 90 minutes of my time for a flat fee of $750.

There’s no reduction in my hourly rate. I merely allow people to start working with me for a lower initial commitment.

I picked 90 minutes deliberately. Not only is it enough time to give prospects a taste of how my advice and copy can benefit them, but it comes in at a price point under $1,000. And that is within the comfort zone of a new client who doesn’t know me all that well.

More important, the Starter Package shows prospects that I empathize with their desire to cut back on spending and have designed a service to accommodate their smaller budgets.

Interestingly, what usually happens is that, after reviewing the Starter Package offer, prospects call me to get a quote for the full service they really want. And more often than not, that’s what they choose to go with.

So while I don’t actually do a lot of copywriting and consulting under the Starter Package arrangement, it makes prospects more comfortable with me as a vendor who respects their budget concerns and limitations. And that’s been keeping my freelance business active and profitable.

[Ed. Note: Bob Bly is a freelance copywriter and the author of more than 70 books. To subscribe to his free e-zine, The Direct Response Letter, and claim your free gift worth $116, click here now.

It IS possible to make sales during a recession. As Bob Bly explained, you need to know what to sell... but you also need to know HOW to sell. Tomorrow morning, we're unveiling a brand-new power-packed program that will give you everything you need to become a master of ultra-profitable sales. Keep an eye on your inbox for this limited-time opportunity.]

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How to Think Like a Billionaire

Monday, May 18th, 2009

In his thoroughly entertaining book The Prime Movers, Edwin A. Locke gives this example of the way entrepreneurs think:

An average person observes evergreens growing along the roadside and thinks that they look pretty, especially when partly covered with snow. At this point, his thinking stops. An entrepreneur observes the same trees and thinks, “These trees would look good in people’s living rooms at Christmas. I wonder what people would pay for them?

And he would continue to ask such questions as:

• How hard is it to grow evergreens?
• What investment is required?
• How big should they be before being cut?
• How difficult would it be to cut and transport them?
• How much would it cost?
• How long would they keep before losing their needles?
• Where would they be sold?
• What would the competition be like?
• Could I make other, related products – e.g., wreaths?
• Can I make money in such a seasonal business?
• How much?
• How can I get started?

This kind of active, directed thinking is one of the things that separate entrepreneurs from the rest of humanity. In fact, the most successful entrepreneurs in history – all of them mega-billionaires by today’s standards – seemed to have dynamic, pragmatic minds.

Locke gives plenty of examples, including these:

• Thomas Edison: He was a “virtual thinking machine. Almost until the day he died, his mind poured forth a torrent of ideas, and he might track as many as 60 experiments at a time in his laboratory.”

• Steve Jobs: He bombarded people with his ideas – his investors, his board of directors, his customers, his subordinates, and his CEO John Scully.

• Henry Ford: “He threw himself into every detail, insisting on getting small things absolutely right…. But he never lost sight of the ultimate, overall objection. He had a vision of what his new car (the Model T) should look like. From all the improvisation, hard thought, and hard work came a machine that was at once the simplest and the most sophisticated automobile built to date anywhere in the world.”

You may be thinking, “Hey, I’m no Thomas Edison or Steve Jobs or Henry Ford.” Well, neither am I. And I could rattle off a dozen multi-millionaire entrepreneurs I know who don’t have that kind of brain capacity either.

Raw intelligence is not the issue. If it were, Einstein would have been wealthy. What matters in the world of commerce is how you think.

Some people, whether because of their upbringing or their DNA, have a natural billionaire mind. But just about anyone who is smart and ambitious can learn to think like a billionaire.

You can transform your mind completely and permanently in a matter of a few short months by making small changes, one at a time. It will take some effort, though. As Joshua Reynolds once said, “There is no expedient to which a man will not resort to avoid the real labor of thinking.”

Begin by vowing to talk to every successful person you know or meet. Tell them how much you admire what they have accomplished and ask them how they do what they do.

You may be amazed at how open they will be to such inquiries. Nine times out of 10, they’ll be eager to tell you just about everything they know.

Unfortunately, many of the twentieth century’s greatest entrepreneurs have been disparaged by historians and the media. As Locke points out in The Prime Movers, if you mention the names Andrew Carnegie or John Rockefeller or Cornelius Vanderbilt to most people, they think “greedy robber barons who took advantage of their circumstances.” They know nothing about their accomplishments. What they know, for the most part, is based on persistent myths that prevent them from learning from these men and prospering.

Locke says:

“It is often claimed that the Prime Movers have been viewed with suspicion at best and with distaste or repugnance at worst…. The most basic motive [of those who envy them] is… hatred of the good for being good… it is hatred of the Prime Movers because they are intelligent, successful, and competent, because they are better at what they do than others are.

“The ultimate goal of the haters of the good is not to bring others up to the level of the most able (which is impossible) but to bring down the able to the level of the less able – to obliterate their achievement, to destroy their reward, to make them unable to function above the level of mediocrity, to punish them, and, above all, to make them feel unearned guilt for their own virtues.”

When you become super-successful, you’ll have to learn how to handle the people who are going to resent you for achieving what they themselves have been unable to do. But first, you have to get yourself into that enviable position. And you do that by practicing the thinking of the great entrepreneurs who thought like billionaires and so amassed billions.

I’ll be writing more on this subject in the future. But for right now, here are eight characteristics of the billionaire mind that you can emulate:

1. A “normal” person is concerned with protecting his ego. When dealing with a problem he doesn’t really understand, he pretends he understands the contributing factors and doesn’t try to find out what anyone else thinks. A person with a billionaire mind asks questions incessantly. He has no ego when it comes to learning. He knows that knowledge is power.

2. A “normal” person has a consumer mentality. He looks at a hot new product and thinks about how he would like to own one. A person with a billionaire mind has an entrepreneurial mentality. He looks at it and thinks, “How can I produce this or something similar in my own industry?”

3. A “normal” person is wish-focused. He daydreams about making gobs of money. A person with a billionaire mind is reality-based. He is always analyzing his own success and the success of others and wondering how he could learn from it.

4. A “normal” person, when confronted with a challenging idea, thinks of all the reasons why it might not work. A person with a billionaire mind sees the potential in it and disregards the problems until he has a clear vision of how it might succeed.

5. A “normal” person resists change. A person with a billionaire mind embraces it.

6. A “normal” person accepts the status quo. A person with a billionaire mind is always looking to make things – even good things – better.

7. A “normal” person reacts. A person with a billionaire mind is proactive.

8. A “normal” person looks at a successful business owner and thinks, “That guy’s lucky.” Or “That guy’s a shyster.” A person with a billionaire mind thinks, “What’s his secret?” And, “How can I do that?”

Start by being humble and asking questions. Do this until it becomes a habit. Then take on another characteristic of the billionaire mind – like looking at a successful new product and thinking, “How can I do something like that?”

Go through the list, mastering one characteristic at a time, and within three months you will be able to create new businesses almost automatically. You will become a natural leader. Money will flow to you like water coming down a hill. And then you’ll be ready to deal with all the “normal” people who are jealous of your incredible success.

[Ed. Note: Get more of Michael Masterson's surefire strategies for getting ahead in business in True Path to Profits: A Master Entrepreneur's Guide to Business Success. Find out more (including how you can get a bonus subscription to his VIP newsletter, Ready Fire Aim) here.  

You can learn more about how to develop a billionaire mindset - straight from a man who mentored four billionaires. Discover how to get proven achievement advice and powerful success techniques that can help you reach new heights in your business and personal life right here.]

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The Parable of the Talents

Saturday, January 10th, 2009

Why do some people retire rich and most people retire poor? This question has fascinated philosophers, mystics, and teachers throughout the ages. There have been so many men and women – hundreds or thousands, maybe even millions – who started with nothing and became financially independent that people are naturally curious to know why it happened and if there are common rules or principles that others can apply to become wealthy as well.

The Parable of the Talents is one of the stories told by Jesus to illustrate a moral lesson. The message in this case (from the Gospel of Matthew): “To him that hath, shall more be given, and he shall have abundance. But from him that hath not, even that which he hath shall be taken away.”

What does it mean?

In the modern world, we say it this way: “The rich get richer and the poor get poorer.” The fact is that people who accumulate money tend to accumulate more and more. People who don’t accumulate money seem to lose even that little bit that they have.

Why should this happen?

The great success principle, the single idea that explains human destiny is simple: “You become what you think about most of the time.”

Control Your Thoughts

 

Whatever you dwell upon grows in your reality. You create your entire world by the things you choose to think about and how you choose to think about them.

It just so happens that wealthy, successful people fill their minds – most of the time – with thoughts, words, pictures, and images of wealth, affluence, success, productivity, and solutions to problems in the marketplace. These thoughts trigger the reticular activating cortex, the part of the brain that makes you more alert and sensitive to things that you have decided are important to you.

For example, if you decide to invest in a mutual fund, you will start to see news and information about mutual funds everywhere. Mentions in newspapers and magazines will jump out at you. These things have always been there, but now you have sensitized your brain to pick them up and draw them to your attention with far greater frequency and vividness. This is the function and power of your reticular cortex.

Think Like Wealthy People Think

 

Wealthy people, from an early age, think about how much they have, how much they want, and all the different things they can do to acquire and earn the money and things they desire.

On the other hand, what do poor people think about most of the time? Unfortunately, they fill their minds with thoughts of scarcity, lack, poverty, being unable to afford things. They are always thinking and talking about how little money they have, how much things cost, and how they wish they could be better off financially. What they think about most of the time is how little money they have.

Find Out How Rich People Think

 

Here’s a rule for you. If you want to become successful, find out what failures do and don’t do it. If you want to be wealthy, find out what poor people think about, and avoid thinking that way. Instead, find out how wealthy people think. Find out what they read. Find out how they spend their time. Study their lives, read their stories and autobiographies, and listen to their words when they are interviewed and on tape. The more you find out about what financially successful people think and talk about most of the time – and do the same things – the more rapidly you will enjoy the same rewards that they do.

Here are two things you can do to put The Parable of the Talents into action:

First, make a decision that, starting today, you will think and talk only about the financial success you desire. At the same time, you will refuse to talk about or dwell upon your financial problems.

Second, instead of saying “I can’t afford it,” you will ask the question “How can I afford it?” When you think of something that you want or need that you don’t have the money for at the time, the only question to ask is “How?” How can you get it? What can you do to achieve it? What are your options? How can you get from where you are to where you want to be?

It will change your life.

[Ed. Note: Today, make the decision that you'll end "poverty thinking." Instead, find out what the wealthy do and copy it. One "Mentor to Billionaires" can give you dozens of simple strategies that his billionaire colleagues used to transform themselves into master moneymakers. Learn more here.

Maybe you want to set goals for yourself - but don't know where to start. Now, success expert Brian Tracy will show you a proven way to set and accomplish even your toughest goals. Just follow the step-by-step instructions in his easy-to-use Maximum Achievement Goal Planner workbook. Start on the path to achieving lifelong success and abundance today.]

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Think Before You “Blink”

Saturday, December 6th, 2008

In last year’s best-seller Blink: The Power of Thinking Without Thinking, author Malcolm Gladwell points out that our “adaptive unconscious” is constantly making assessments about people and situations in just a matter of seconds.

He argues that these snap judgments are not just good, but extraordinary. For example, he cites a study showing that college students can watch short film clips of professors lecturing and rate them as accurately as students who spend an entire term with them, even when the clips are only two seconds long. (Two seconds!)

This is quirky and interesting, but I’m skeptical. Much of my own experience has rebutted this line of thinking.

How many times have you made a new acquaintance, thought you knew him, and then one day discovered he was not the person you thought he was? (Sometimes better, sometimes worse.) How many times have you been badgered, cajoled, or (okay) dragged to an event that turned out to be a lot of fun?

In making snap judgments, we often shortchange our friends, our family, our co-workers, even ourselves. We miss opportunities for new experiences and relationships. And, more often than not, we are almost completely unaware of it.

Investment legend John Templeton once wrote, “A successful life depends less on how long you live than on how much you can pack into the time you have. If you can find a way to make every day an adventure – even if it’s only a matter of walking down an unfamiliar street or ordering an untried cut of meat – you will find that your life becomes more productive, richer, and more interesting. You also become more interesting to others.”

Gladwell says that we’re much more apt to “think without thinking.” But the results of such thinking are biases that are not always on target…

When I first met my pal Rob Fix at work more than two decades ago, I had two overwhelming impressions. One, he talked too much, and, two, he was a bit of a kook. For several weeks, I avoided him like the IRS.

Then, at a party at a friend’s house, I noticed a crowd of people in the backyard. They were gathered around Rob, who had brought over his telescope and was busy showing everyone the moon, the planets, the Orion Nebula, and the Andromeda Galaxy.

“How far is it to the moon, anyway?” asked a young woman who was peering into the telescope.

“Now let me see,” said Rob, thinking out loud. “I just drove it the other day…”

“Hey,” I remember thinking to myself, “this guy isn’t so bad. He’s actually pretty funny.”

Of course, now that I’ve known Rob for 26 years I realize that my first impression of him was totally off base. He’s not a guy who talks too much and is a bit of a kook. He’s a guy who talks way too much and is the biggest kook I’ve ever met. He is, in fact, the world’s most lovable kook. Perhaps that’s why he was the best man at my wedding.

Our prejudgments can mislead us…

A friend declines tickets to a jazz concert because he knows he wouldn’t like it. My daughter Hannah turns up her nose at every food she doesn’t recognize. We pass on taking a weekend trip because we imagine “It won’t be worth it.”

Each day, we face making dozens of small decisions. For expediency, if nothing else, we lapse into the safe, the familiar, the unthinking – denying ourselves the pleasure of a new discovery.

Just ask Walker Percy. In his Foreword to John Kennedy Toole’s A Confederacy of Dunces, he describes how the book came to his attention:

“While I was a teacher at Loyola in 1976 I began to get telephone calls from a lady unknown to me. What she proposed was preposterous. It was not that she had written a couple of chapters of a novel and wanted to get into my class. It was that her son, who was dead, had written an entire novel during the early sixties, a big novel, and she wanted me to read it. Why would I want to do that? I asked her. Because it was a great novel, she said.

“Over the years I have become very good at getting out of things I don’t want to do. And if ever there was something I didn’t want to do, this was surely it: To deal with the mother of a dead novelist and, worst of all, to have to read a manuscript that she said was great, and that, as it turned out, was a badly smeared, scarcely readable carbon.

“But the lady was persistent, and it somehow came to pass that she stood in my office handing me the hefty manuscript. There was no getting out of it; only one hope remained – that I could read a few pages and that they would be bad enough for me, in good conscience, to read no farther. Usually I can do just that. Indeed the first paragraph often suffices. My only fear was that this one might be just good enough, so that I would have to keep reading.

“In this case I read on. And on. First with the sinking feeling that it was not bad enough to quit, then with a prickle of interest, then a growing excitement, and finally an incredulity: surely it was not possible that it was this good…”

Oh, it’s good all right. Walker Percy’s discovery went on to win the Pulitzer Prize for Fiction in 1981, and has since sold more than two million copies. The novel – which features the hilarious misadventures of slob extraordinaire Ignatius Reilly – is now regarded as a comic masterpiece.

Let’s be grateful that Percy didn’t follow his intuition, his instant assessment, his inner “blink.” And just maybe we should keep a close eye on our own, too.

Life really is full of surprises. But “thinking without thinking” may not be the best way to discover them.

[Ed. Note: Relying solely on your snap judgments could be keeping you from taking advantage of powerful opportunities. One of the most common snap judgments we see at ETR is people who think, "No way. An Internet business isn't right for me." The truth is, practically anyone can start his or her own Internet business - and make it profitable. For a step-by-step guide to doing just that, click here.  

And be sure to join Alex Green, Chairman of Investment U and Investment Director of The Oxford Club, as he tackles some of life's more difficult challenges in his free, twice-weekly e-letter Spiritual Wealth. Get your roadmap to a rich life here.]

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Living Without Limits

Tuesday, September 23rd, 2008

The starting point of great success and achievement has always been the same: Dream big dreams. There is nothing more important, and nothing that works faster, than to cast off your own limitations and begin fantasizing about what you can become, have, and do.

As a wise man once said, “You must dream big dreams, for only big dreams have the power to move the minds of men.” When you begin to dream big dreams, your levels of self-esteem and self-confidence go up immediately. You feel more powerful about yourself and your ability to deal with what happens to you. The reason so many people accomplish so little is because they never allow themselves to lean back and imagine the kind of life that is possible for them.

A principle that you can use to dream big dreams and live without limits is contained in what physicist Elihu Goldratt calls the “Theory of Constraints.” This is one of the greatest breakthroughs in modern thinking. What Goldratt found is that in every process, in accomplishing any goal, there is a bottleneck or choke cord that serves as a constraint. This constraint then sets the speed at which you achieve the goal. But if you concentrate all of your creative energies and attention on alleviating the constraint, you can speed up the process faster than by doing any other single thing.

Let me give you an example. Let us say that you want to double your income. What is the critical constraint or the limiting factor that holds you back? Well, you know that your income is a direct reward for the quality and quantity of the services you render to your world. Whatever field you are in, if you want to double your income, you simply have to double the quality and quantity of what you do for that income. Or you have to change activities and occupations so that what you are doing is worth twice as much. But you must always ask yourself, “What is the critical constraint that holds me back or sets the speed on how fast I double my income?”

So what is holding you back? Is it your level of education or skill? Is it your current occupation or job? Is it your current environment or level of health? Is it the situations that you are in today? What is setting the speed for you to achieve your goal?

Remember, whatever you have learned, you can unlearn. Whatever situation you have gotten yourself into, you can probably get yourself out of. If your real goal is to dream big dreams and to live without limits, you can set this as your standard and compare everything you do against it.

The three keys to living without limits have always been the same. They are clarity, competence, and concentration.

Clarity means that you are absolutely clear about who you are, what you want, and where you’re going.

You write down your goals and you make plans to accomplish them. You set very careful priorities and you do something every day to move yourself toward your goals. And the more progress you make toward accomplishing things that are important to you, the greater self-confidence and self-belief you have, and the more convinced you become that there are no limits on what you can achieve.

Competence means that you begin to become very, very good in the key areas of your chosen field.

You apply the 80/20 rule to everything you do, and you focus on becoming outstanding in the 20 percent of tasks that contribute to 80 percent of your results. You dedicate yourself to continuous learning. You never stop growing. You realize that excellence is a moving target. And you commit yourself to doing something every day that enables you to become better and better at doing the most important things in your field.

Concentration is having the self-discipline to force yourself to concentrate single-mindedly on one thing, the most important thing, and stay with it until it’s complete.

The two key words for success have always been focus and concentration. Focus is knowing exactly what you want to be, have, and do. Concentration is persevering, without diversion or distraction, in a straight line toward accomplishing the things that can make a real difference in your life.

When you allow yourself to begin to dream big dreams, creatively abandon the activities that are taking up too much of your time, and focus your inward energies on alleviating your main constraints, you start to feel an incredible sense of power and confidence. As you focus on doing what you love to do and becoming excellent in those few areas that can make a real difference in your life, you begin to think in terms of possibilities rather than impossibilities, and you move ever closer toward the realization of your full potential.

[Ed. Note: Clarity, competence, and concentration will bring you very close to success. The final step is to take action and turn your dreams into reality. Brian Tracy - one of the world's leading authorities on the development of human potential and personal effectiveness - can help you discover a simple and easy-to-learn way to get everything you want out of life. Get all the details of his Ultimate Goal Achieving Package here.

Owning a multimillion-dollar business is no longer just an idle dream. You can get 12 specific strategies that will help you turn your online business into an Internet powerhouse at ETR's 2008 Info-Marketing Bootcamp. In fact, you could be making $1.2 million or more in 2009...]

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Overcoming the “Technical Learning Curve”

Tuesday, September 2nd, 2008

Starting an Internet business takes work – but it’s easier than you may think. Unfortunately, many people are stumped by the “technical” side of it. Here is just one example of the kind of e-mail I get from frustrated entrepreneurs on a daily basis…

“What if you do not know your way around a computer? What if that is why you are sitting with $1,000 worth of products and cannot use them because you just do not understand the technical stuff and do not find any material or help on the subject… and it takes so long to teach yourself that you just give up?

Wouldn’t it be great if someone would write a manual for newbies, telling them what to do and how to do it and translating everything that their webmaster is talking about!”

Does that sound familiar?

If you are new to computers, the learning curve involved in starting an online business can seem insurmountable. On top of trying to figure out the business and marketing part, you’re faced with technical challenges around every corner.

So if you are a complete newbie with very little computer experience – but are desperately eager to start a business on the Internet – where do you begin?

Here is a step-by-step action plan that will give you the technical knowledge you need to get your business up and running as quickly as possible…

Step #1: Assess and build your general computer skills.

If you are reading this newsletter, it’s safe to assume that you have basic computer skills and know how to use common programs (such as Microsoft Word and Internet Explorer), send e-mail, and navigate to different files on your computer.

If you are not comfortable with these tasks, you need to get yourself up to speed. You could take an “Introduction to Computers” course at your local community college. But the easiest way to do it is with the following books:

Don’t take the “Dummies” in the titles personally. These books will teach you the fundamentals, so you can spend less time banging your head against your keyboard and more time building your business. (Best of all, they can be purchased for less than $20 each on Amazon.com.)

It shouldn’t take long to learn what you need to know. If you spend an hour a day reading one of the books mentioned above, you’ll be able to do it in just a couple of weeks.

Step #2: Assess and build your general Internet skills.

Once you’re comfortable with your basic computer skills, it’s time to move on to your Internet skills. You have to know your way around the Web if you want to build a successful online business.

This doesn’t mean you need to know the technical details of how the Internet works. (For example, you’re not going to fail if you don’t know what “http” means.) But you should understand the basic principles of how websites work and how they fit into the big picture of the Internet.

The best way to figure that out is with the book Internet for Dummies. And then you’ll be ready to proceed to the next step.

Step #3: Build a basic website.

Some people will say you don’t need to know anything about building a website in order to have a successful online business. All you have to do is hire a Web designer to do it for you. (If you can afford it.)

I don’t share that point of view.

I believe it’s important for you to have at least some understanding of how to design and set up a website. These skills will give you a significant advantage when communicating with the designer you hire to build your site for you. (And, obviously, these skills are even more important if you decide to design and build your website yourself.)

If you choose to hire someone to build your site – and don’t have any Web design skills of your own – you’re totally at the mercy of your designer whenever you want to make little changes. Every time you want to change your sales copy… or your images… or your price point… you’ll need to get them to do it. But if you know how to make simple changes yourself, you’ll save yourself both time and money.

You could learn basic Web design skills from a book like Web Design for Dummies.
Another option is to look into taking a Web design course at a local college. It’ll help you fast-track the learning curve and bring yourself up to speed much faster. Or you could find a website-design program that walks you through building a website, step by step. (ETR offers one such program in their 5 Days in July DVD package.)

Step #4: Get your business started.

That’s it. Now you’re ready to start building your business on the Internet!

[Ed. Note: Once you have the basic "technical skills" necessary to build your own Internet business, you can get started making money. Internet marketing expert Derek Gehl has helped thousands of people grow online businesses that generate $100,000 a year - and often much more! Find out if you have the personality to create extraordinary wealth online right here.

And for targeted advice from 12 money-making masters, you should attend ETR's 2008 Information Marketing Bootcamp. Each of these Internet business builders has promised to give you a rock-solid blueprint for earning an extra $100,000 in 2009. Learn more here.]

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The Urgency Conundrum

Wednesday, August 27th, 2008

A business associate of mine used to fax me on a regular basis. (This was before e-mail.) And every darn fax said URGENT at the top in big bold letters. At first, I found it curious. And then, it became annoying.

Come on. Was every fax of his urgent? Of course not. And what was the result? I stopped giving any of them my immediate attention.

Being overly urgent is not the most effective approach to accomplish your goals. You see, people – especially people who may be in a position to help you – get tired of everyone wanting everything done today (or yesterday) just because they want it. So if, for example, you are always demanding that your projects be completed now, now, now – even when they don’t deserve that priority treatment – people will quickly learn to resent and/or ignore your demands.

Sure, you can sometimes achieve faster results by labeling them “urgent.” But do it too often, and you will simply alienate those involved. You can’t expect to keep getting bumped to the head of the line.

Have consideration for other people. Your spouse, colleagues, co-workers, joint-venture partners – anyone you deal with regularly – have a “rhythm” to their day. And when they incorporate you into their schedule, doesn’t it make good sense for you to make that a pleasant (as opposed to stressful) experience?

By recognizing that many people won’t feel a need to respond to your urgent requests, it becomes your responsibility to motivate them to get whatever it is that you want done in a timely manner. You don’t want to be a tyrant, but you don’t want to be a pushover either.

You can also apply this kind of thinking to your personal goals, whether you’re learning how to play the piano, taking French lessons, or creating an Internet business. If you treat every step of your new venture as urgent, you’ll burn yourself out. To achieve the best results, work each step into a specific important-but-not-urgent time slot in your schedule.

[Ed. Note: Accomplishing your dreams - even the big ones - doesn't have to be overly complicated. Simple steps - like limiting the number of "urgent" requests you make - can help you achieve almost any goal. Learn how to get 30 more easy-to-implement goal-setting strategies right here.]

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How to Break Into the $20 Billion “Look and Feel Younger” Market

Wednesday, August 27th, 2008

Aging baby boomers, who are retiring in droves these days, are fueling a $20 billion mega-market because they want to look and feel younger.

The market I’m talking about is nutraceuticals and cosmeceuticals. And you can make a lot of money selling these products on the Internet or by direct mail – even if you have limited capital to invest.

“Cosmeceutical” is a combination of two words: cosmetics and pharmaceutical. Cosmeceutical products claim to have “drug-like” benefits without the harmful side effects. Examples of cosmeceuticals include certain skin and hair care products, anti-aging creams, and moisturizers.

“Nutraceutical” is derived from the words nutrition and, you guessed it, pharmaceutical. Neutraceuticals include dietary supplements and nutritional ingredients that promote optimal health in a natural way.

The Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) have a lot of power as far as what you can and can’t do in this market. The most important thing to keep in mind is to avoid making unsubstantiated product claims in your marketing materials. Just play by the rules and you’ll be fine.

As I said, aging baby boomers are driving this multibillion-dollar “feel good and look good” market. But that doesn’t mean baby boomers are the only ones using these products. There are products in this market that appeal to every demographic.

Entrepreneurs are reaping windfall profits in this market by concentrating on and selling to “A” prospects. In other words, by focusing on people who have recently purchased similar products at approximately the same price point as theirs. These repeat buyers are pre-qualified and primed to buy.

The easiest and fastest way to enter this huge industry (and start turning a profit) is through direct marketing – by reselling products for other companies or becoming an affiliate.

Reselling products for other companies is easy. You offer their products to your “A” prospects on a website or via direct mail. Consumers place their orders with you and you ship (or have the manufacturer drop-ship) the products to them.

Affiliate marketing is similar – but, in most cases, you won’t handle any products, customer service, technical support, or billing. The company you become an affiliate for will take care of those things.

Believe me, affiliate selling works. You can get started with very little money. You don’t need to stockpile products in your garage or spare bedroom. Plus, when you sell products as an affiliate you don’t need employees, accountants, lawyers, or even a formal office space. And there is no face-to-face selling, no customer service headaches, and no back-office junk. So you don’t have to worry about database management, online shopping cart issues, software glitches, or refunds/returns.

Instead, you can focus all of your energy on your direct-response marketing efforts.

This could mean running Google, MSN, and Yahoo! keyword advertising campaigns, or even mini-infomercials. Or it could mean marketing your cosmeceuticals and/or nutraceuticals directly to consumers via direct mail.

If you choose to go the direct-mail route, you’ll need a mailing list of repeat buyers for those types of products. A good place to locate lists like this is at SRDS.com.

When you have products to sell and a mailing list of repeat buyers, you can send out a catalog (the manufacturer’s or one of your own design) and/or a sales letter. Most of the companies that offer distributor and reseller programs for affiliates already have pre-printed catalogs that you can use.

If you prefer to create your own catalog and/or sales letter, you can get lots of ideas by subscribing to Who’s Mailing What.The Who’s Mailing What archive includes more than 1,500 successful direct-mail campaigns, and most of them are for consumer beauty and nutritional products.

You should also add your name and address to as many cosmeceutical/nutritional product mailing lists as you can find so you can start receiving other marketers’ promotional pieces. Do this by buying one or two of the products in this category that you see advertised – and, before long, your mailbox will be loaded with catalogs, brochures, etc. That will give you an edge over the competition, because you’ll see what’s working. (You can be pretty sure that the promotions you receive over and over again are bringing in lots of money for the people mailing them.)

If you mail a catalog or a powerful sales letter to “A” prospects – repeat cosmeceutical/nutraceutical product buyers – the probability of making substantial sales is quite high.

If you market on the Internet by running keyword advertising campaigns, you’ll need a website to drive interested people to. And you’ll need strong copy on your website to persuade them to buy. You can educate people on the attributes and features of your products on your website. But the main objective is to sell them. Hire a freelance copywriter if you need help coming up with compelling copy for your site. Better yet, make a good investment in a copywriting program for yourself.

Once you have the copy, there are four ways to market your products online: search engine marketing (via pay-per-click advertising and organic search), e-mail newsletter ads, and dedicated e-mail promotions.

You can also post your products on all of the high-traffic marketplaces, including Amazon.com, eBay, Yahoo Shops, Buy.com, and ClickBank.

However you choose to market cosmeceuticals and/or nutraceuticals, the profit potential for these products just keeps growing and growing. The desire to look and feel younger – and maintain good health – spans generations and won’t be dissipating any time soon.

[Ed. Note: Marc Charles is an expert at discovering low-effort business opportunities with high profit potential. And now you have the chance to meet him in person... and pick his brain about the best entrepreneurial ventures around today. Just sign up for ETR's 2008 Information Marketing Bootcamp. Not only will you get to hear about Marc's freshest business opportunities, you'll also get insight into the Internet's hottest trends from 11 other money-making masters. And be prepared to be blown away. We've insisted that each speaker share at least one idea that could place $100,000 cash money in your pocket within just 12 months or less... regardless of your current level of skill, expertise, or the state of your business. Learn how you can reserve your spot right here.]

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Fast-Response Bonus

Thursday, August 21st, 2008

One of the most effective weapons in your marketing arsenal is urgency. Urgency makes your prospective customer feel that he has to take action and respond to your offer immediately. Your job is to give him a good reason to do it.

Why is this so important? Some people read a sales letter and set it aside. “I’ll come back to this later,” they think. This happens even if they are truly interested in the product you’re selling. But what usually happens is that they forget about the sales letter… and never order. They miss out on a product that could help them make money or get healthier or become a better writer. And you miss out on a sale.

Some products have built-in urgency. Let’s say you’re selling a conference. The conference takes place on August 23rd, so, naturally, people know that they have to sign up before that date. Or perhaps you’re selling a special Q&A session with one of your experts, but the expert has put a cap of 50 on the number of people who can attend. Interested folks know that they need to sign up right away, or they won’t get in.

If there’s no urgency inherent in the product, you can create your own with what Jessica Kurrle, ETR’s Marketing Manager, calls the “Fast-Response Bonus.”

Here’s how it works…

Think about your potential prospects’ secondary core desires and what could fulfill them. Make a list of five of these and identify the best one. That’s a great topic for your bonus – something your prospects REALLY want. Now, you can quickly create an excellent special report on that topic, or maybe even repurpose material you already have that addresses this need.

That becomes your Fast-Response Bonus.

And this is how you use it to create urgency – and get your prospects to click the order button immediately: “Limited offer today only. The first 50 people who order will get a free copy of…”

[Ed. Note: The more you know about simple but effective direct-marketing principles, the more sales you'll make. Learn how you can get your hands on dozens more techniques from two direct-marketing masters right here.]

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How I Increased My Profits By 1,000%

Thursday, August 14th, 2008

Richard called me in a panic, begging me to fill in as a guest on his local cable TV show. Seems that one of the people he’d booked had cancelled at the last minute. It sounded interesting, so I agreed.

I was surprised to find that his show was recorded in a tiny room instead of a professional sound studio. The format was similar to a talk show. He had four guests, including me, all of us local businesspeople. He interviewed us, one at a time, about what we did – giving each of us a chance to indirectly plug our product or service.

At one point, Richard whispered to me, “Can you believe I’m making three thousand dollars right now?”

I was floored. I had been producing my own little cable show, and was struggling to make a profit by selling airtime for commercials. So, when Richard’s show was over, I asked him to reveal how he was making so much money for just an hour or so of work. He explained that each of the other businesspeople on the show had paid him $750 to be there – including the one who didn’t show.

“But how are you getting these people to pay that much for such a small amount of media exposure?” I asked.

 ”They don’t care about the money,” he replied. “They’re paying me in barter dollars.”

That’s how I found out about a whole world I never knew existed.

I learned that there are networks made up of thousands and thousands of businesses that participate in formalized bartering. These networks, in effect, create their own currency – what they call “barter dollars.” And those barter dollars, in theory, have the same value as real dollars. Not only that, but barter club members are very receptive to buying products and services from other members, because they are always looking for ways to spend their barter credits.

I was amazed to see how many things can be acquired with bartering. That includes almost any professional service you can think of, from doctors and lawyers to copywriters and public relations experts. Also restaurant meals, furniture, travel, and too many other goods and services than I have room to list here.

As I said, I was barely breaking even with my cable show… until I discovered bartering. But as soon as I joined a large national barter network, I found a video production company that would work for me in exchange for barter credits. This greatly reduced my cash expenses.

I had been paying a videographer $500 to come out and film my show, and another $500 to do the editing. I was paying for that, as well as the airtime I bought from the cable company, with the income I was getting from advertisers. And I was usually left with about $100 in profit. Hardly worthwhile for all the time and effort I was putting in.

But because this videographer accepted payment of $500 in barter, that allowed me to retain the real dollars I was getting from my regular advertisers. I was also able to sell out my previously unsold airtime to barter advertisers. That barter income was then applied to the bulk of my expenses.

My cash profit soared from $100 to over $1,000 per show.

Now you might be wondering if the products and services you get with barter dollars are below par in some way. Absolutely not. The production services I used for my show were equal to those of any I had paid cash for. The restaurants I ate at with barter dollars were expensive and popular. The lawyer I used gave me better advice than several others who had charged me hefty hourly cash fees. The dentist I used did a perfectly good job. And I was very happy with the lamp I bought with barter dollars from a furniture retailer. I also noticed that the advertisers who bought airtime from me with their barter dollars had thriving businesses – a massage therapist, party entertainment company, chiropractor, perfume distributor, and Italian restaurant, among others.

You might also be wondering how wide-ranging barter networks are. Certainly, if you live in a relatively big city, you will have access to more local merchants who are members. But there are many kinds of barter transactions that can be done no matter where the participants live. For example, I use a Web programmer who lives in Connecticut and a pay-per-click marketing consultant who lives in Orlando. And when I ran a mail-order house for a colleague, our fulfillment house was in the Midwest and our phone center was in the Northeast.

If you decide to join a bartering organization, here are some things to keep in mind:

• Joining a well-established organization offers a lot more security.

Many national barter networks have thousands and thousands of members. While there is no guarantee that any bartering organization won’t suddenly go out of business – and, in doing so, vaporize your barter credits – if you join one that has been around for a number of years, there is a much smaller chance of that happening. If you simply put the term “barter club” into a major search engine like Google, you’ll find many options.

• Barter earnings and expenses are treated like cash by the federal government.

Barter organizations are required to report the barter earnings of their members to the IRS, so don’t think the barter dollars you get are tax-free. Yes, you’ll have to declare your barter income – but you will also be able to deduct legitimate business expenses that you pay for with barter dollars. If you are smart about it, you can actually lower your tax bill.

• Most barter organizations prohibit members from inflating their regular prices for barter transactions.

Even if there’s a willingness on the part of some barter members to pay a premium for your product or service when they’re using barter dollars, you can’t charge them more than you charge your cash customers. In fact, some barter organizations will terminate your membership if you get caught doing it.

• The cost of joining a barter organization varies.

As I said, a quick search on a major search engine will turn up many barter club options. So shop around.

Bartering offers a great way to fatten the bottom line of any business with excess capacity that can be turned into extra profits. It opens up a whole new market to sell to. Plus, you can potentially lower your cash expenditures drastically by using other barter club members as vendors.

Let’s say you operate a company that puts together travel packages. Some of the services you provide for your clients include transportation from the airport, hotel accommodations, and restaurant discounts. As a member of a barter club, you could arrange for all of that to be paid for with your barter dollars – and then the entire fee you charge your clients would be pure profit.

Or perhaps you’re a CPA, and have just opened your own office. Until you build up your business, you could fill your idle time with barter clients and use that barter income to pay your doctor, your lawyer, or maybe even treat your family to a vacation.

Bartering can’t totally replace a cash business. But it can vastly increase your cash flow and profitability – as it did mine.

[Ed. Note: By joining a bartering network, business-building expert Paul Lawrence says it's possible to make your dollars stretch... and multiply. You can learn more about bartering with Paul's new audio program, "Secrets to Get Rich With Bartering."
Check out the details here.

Of course, with or without barter dollars, starting your own business is one of the very best ways to achieve financial independence. And you can do it with as little as $100. Learn how right here.]

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Keep Your Cool When Offered a “Hot” Deal

Wednesday, August 13th, 2008

The plan was nearly perfect.

I’d fly from Florida up to JFK and spend Friday night at my nephew’s graduation party on Long Island. Saturday morning, I’d drive up to Boston to spend the rest of the weekend visiting friends, and would then fly back home out of Logan airport Sunday night.

All I needed now was what’s called a “one-way” car rental. Pick-up in one city, drop-off in another.

Problem is, they’re often VERY expensive. But I’d hit the jackpot. I found a Hertz deal online for about $130 for the weekend. Nice! I jumped on it.

Just one problem…

Sunday night, I’m running late as I hurriedly pull into the Hertz return lot at BOS. The return processor scans the car and prints out the receipt. I grab it and head for the shuttle. But just then… my heart skips a beat. Maybe a few.

$317.43! Gadzooks!

“What the…? There must be a mistake,” I thought to myself. But when I looked at the line items on the receipt, there it was… MY mistake.

Mileage Fee: 387 miles @ $0.45 per mile; Extra Miles Fee: $174.15.

I’d made the error of assuming that my rental came, as 99 percent of car rentals do nowadays, with unlimited mileage. But, sure enough, when I pulled out the contract, the mileage fee was there in bold and in plain daylight. Ahhh. So that’s why the base rate had been so low.

I was annoyed that my trip was costing about $200 more than I’d thought. I didn’t let it ruin my day though, because I realized that might have been the best deal I could have gotten anyway.

Meanwhile, I had relearned a valuable lesson: Whenever you get that “Brother, ain’t I smart!” feeling… watch out.

[Ed. Note: Spending more money than you'd planned because you didn't read the "fine print" is frustrating. And life is full of little irritations like that. Fortunately, there are clever ways to easily get out of most of them - and we've got hundreds of solutions you can discover in minutes right here.]

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Earning 10 Times As Much

Wednesday, July 23rd, 2008

Here’s an exercise for you. Imagine that it’s possible for you to earn 10 times your current annual wage.

The first reaction of most people to that exercise is to smile briefly and then begin thinking about why it isn’t possible. But, as Mark Twain once wrote, there are a thousand excuses for every failure but never a good reason.

The main preoccupation of the average American seems to be money, or the lack thereof. The tragedy in this is that the average person has the inherent potential to earn far more than he is earning currently.

Is the manager earning $250,000 per year 10 times smarter than the manager earning $25,000? 10 times more experienced? Does he work 10 times harder? Of course not.

Here are two things you can do to start increasing your income:

1. Identify the highest earning people in your field. Find out what it is that they are doing differently from others who aren’t doing as well. Copy them every day.

2. Set a goal to double your income over the next two or three years, and then figure out what you have to do to achieve it.

Get started!

[Ed. Note: Doubling your income is a reachable goal. So is the goal of becoming a millionaire. Especially if you follow men and women who have reached seven-figure net worths in seven years or less. Learn how they did it - and how you can do the same - right here.

If you want to find your focal point and learn to maximize your income and minimize your effort, check out Brian Tracy's 6-CD Power of Clarity program.]

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Are You Better Off than Your Parents Were? Really?

Wednesday, July 9th, 2008

"There is less social mobility in England," Gordon Brown, England’s prime minister, said, "than at any time in the past 50 years."

It was a political speech. Normally I pay no attention to political speeches, but this caught my attention. Less social mobility. That means a statistically lower chance for people to better themselves financially. Fifty years? Where’s the progress?

I remember something Bill Bonner, founder of Agora, wrote about the U.S. economy in The Daily Reckoning. He said the average wage earner is poorer now – on an inflation-adjusted basis – than he’s been in 30-odd years.

We are supposed to be living in a world where things are gradually getting better. But for most people, things are stalled or getting worse.

I mentioned Brown’s remark to one of the people who write for Agora’s newsletters in England. He dismissed it. "It’s just political pandering," he said. "Something the Tories say to get the working class behind them."

Politicians do pander. But in this case – and in the case that Bill Bonner made – my experience corroborates the data. It seems as hard, or perhaps harder, to get ahead today than at any point in my lifetime.

And that’s not how it should be.

Of course, there are plenty of good reasons why it’s tough to get ahead. Right-leaning politicians tell us that competition from China and India is high on the list. The common complaint from leftward-postured pols is that the government spends too much money on helping the rich get richer and practically ignores the wage earner.

You can’t avoid – and shouldn’t rue – globalization. It’s the inevitable consequence of a linked, 21st century world and will eventually bring a better future for everyone. What you have to worry about is all the laws that politicians pass – pols from both sides of the aisle – to fix social immobility. Most of those regulations simply clog things up and make it more, not less, difficult for ambitious people to move up the social scale.

At ETR, we don’t see any significant obstacles on the road to success. Yes, there are fallen trees and boulders to get around. But if you are willing to take a running jump every once in a while, you can move along at a satisfactory speed.

In other words, we believe that any individual can beat the odds and get ahead. And that’s what we help you do.

Are you ready for that? Are you prepared to be the one person in 10 who steadily gets wealthier while his friends, colleagues, and neighbors sit back and do nothing but vote for pandering politicians whose job it is to put the blame where it doesn’t belong and make promises they can’t possibly keep?

Yes, Gordon Brown is right that most people in England are financially stalled. And, yes, it’s also true that most U.S. citizens are poorer than they were in the 1970s. But we are living at the dawn of a brand-new century, and everything is very different than it was 50 years ago. The whole world is connected through wireless communications and the Internet. We are very lucky to be alive right now. In fact, this is probably the best time to have wealth-building ambitions in more than a hundred years.

Most of your friends and colleagues and neighbors won’t do anything about it. But you can be the exception that gets plugged in and starts an Internet-based business. In the 21st century, millions of new millionaires will be made – and most of them will start with nothing but a small bank account, some good advice, and the wisdom to see the writing on the wall.

[Ed. Note: The Internet is flush with money. All you have to do is take action and grab your share of the profits. The best way to do it is by starting your own Internet business. And it doesn't have to be difficult. ETR's team of marketing and business-building experts can walk you through each and every step. Learn how to build a full-fledged business quickly - without a lot of risk - right here.]

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When Not to Save Money

Thursday, June 26th, 2008

A few days ago, while reading an article in Time about how to lower stress, I was reminded of the words of wisdom that a centimillionaire friend of mine once shared with me. He explained that in the past, when things got tough in one of his businesses, he focused on slashing overhead to the bone.

Nothing was too small to escape his attention – terminating the delivery of bottled water, handing down an edict to his staff to use fewer paperclips, buying lower-quality copying paper, hiring a less-expensive janitorial service… and so on.

The result? Every time he declared war on expenses, the savings he realized had almost no effect on the fortunes of his business. He finally recognized that you don’t make money by cutting overhead. Making money is a direct result of the amount of time you spend creating valuable products and marketing them. Marketing is the engine of every successful company, because it leads to sales – and sales lead to profits.

It all gets down to how you spend your time. Would you rather spend it focusing on problems or opportunities? Any overhead, no matter how small, is a problem if your income isn’t high enough to cover it. And, in theory, no amount of overhead is too high if your income is great enough to cover it – preferably many times over.

The reason this crucial point came to mind as I was reading that Time article is because I truly believe that worrying about nominal expenses is a huge stress generator. I say that because I used to do it to an extreme.

I once knew a woman who would drive 15 miles to save 79 cents on something like a bottle of shampoo. If she bought 10 of them, she might save $7.90. Which sounds good until you factor in the extra hour it might have taken her to get to the store that had the lower price. In addition, there would have been stress involved if she had to fight her way through heavy traffic to get to that store.

Pennies may add up to dollars, but the time required to save those pennies can add up to a lot of stress – and enough stress might just add up to serious illness or premature death.

Early in my career, I began to reassess some of the ways in which I was saving on expenses. I came to realize that in order to make intelligent decisions when it comes to saving money, time and stress should always be factored into the equation.

Following are some examples of "money-saving" habits that I eliminated from my life as a result of this reassessment.

When I lived alone for a while in my twenties, I did a lot of grocery shopping. I bought a lot of fruits and vegetables in those days, and, after I brought them home, often found some spoilage. Instead of throwing out the spoiled items, I would pack them up, take them back to the supermarket, ask to speak with the manager, and return them for a refund. It was a time-consuming undertaking, to say the least.

When I finally thought about what I was doing, I estimated that by getting those refunds, I saved, on average, a couple of dollars a week – or about $100 a year. Without realizing it, what I was telling myself was that the many hours I was investing in returning spoiled fruits and vegetables were worth less than $100 a year! Needless to say, I stopped.

Another example was my habit of carefully reviewing the bill when I ate in restaurants. It took me a long time to recognize two things about restaurant tabs: First, they are seldom incorrect. Second, on those rare occasions when math mistakes are made, the errors are in the customer’s favor as often as in the restaurant’s. In other words, a wash.

But even if you end up on the short end of restaurant-tab mistakes, how much in the hole could you possibly be over a period of 40 or more years if you didn’t take the time to scrutinize every check? $100? $200? $300? I doubt it would be as much as $300, but even if it were, that would average out to only about two cents a day over 40 years. I don’t know about you, but a few minutes of my time is worth a lot more than two cents.

A more recent money saver that I finally backed away from is the dreaded "rebate" game. As you are probably all too painfully aware, it’s a game played relentlessly by computer software companies. All you have to do is read the voluminous instructions, fill out a form that asks you for information that includes everything but birthmarks in private places, cut off the box top from the software package, put it together with your original receipt, and mail it in. Then the software company sends you a rebate of $50 or so – in about eight weeks.

Doh! I finally woke up to the reality that my time and effort is worth far more than the money I was saving by being a rebate addict.

Yes, time is money. How much is your time worth?

Let me make it clear that I don’t believe in profligate spending. But I do believe in factoring in time and stress when it comes to saving insignificant amounts of money. I know that turning your back on saving money flies in the face of conventional wisdom, but the reality is that many so-called savings are nothing more than illusions when juxtaposed against the loss of time and the damaging effects of stress.

[Ed. Note: The more money you make, the less you need to worry about a few dollars here and there. You can increase your income many times over with the treasure chest of proven ideas, strategies, and techniques Robert Ringer has packed into his best-selling dealmaking audio series. Learn how to make penny pinching a thing of the past right here.

And sign up for Robert's Voice of Sanity e-letter here.]

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Transitioning Over to the “Money” Side of Your Company’s Business

Friday, May 16th, 2008

You have the greatest chance of getting big raises, big promotions – and eventually, a six-figure income – if the work you do has a positive impact on your company’s bottom line. In general, that means being a salesperson, marketer, product creator, or profit manager. If you are not currently (or haven’t been trained to be) in one of those positions, don’t despair. You can keep your official job and still make the transition over to the money side.

Here’s how to do that: Ask yourself which people in your company make the most money. Identify at least three distinct jobs. Now ask yourself which of those jobs you would most like to do.

It may seem like a stretch at the moment, but it’s entirely possible that you could do that job. So, starting today, learn something about it. Find out what it takes in terms of hours and days. Find out what it typically pays and when it pays more and why. Ask about the daily routine, the common problems, the biggest challenges, and the best rewards. Ask. Observe. Read.

Keep it up, day after day, until you start to feel as if you understand the job. When you feel ready, talk to your boss about your plans. Then approach key people in the department you’re interested in. Tell them (honestly) that you think their field is something you’d be good at. Say you’ve been learning about it in your free time and you’d like to volunteer to help them out whenever you can so you can learn even more.

People will be impressed by your willingness to dive in and give them a hand. If your intentions are sincere and your follow-up is diligent, you’ll soon enjoy a reputation for being an up-and-comer.

[Ed. Note: The above was excerpted from Michael Masterson's New York Times best-seller Automatic Wealth for Grads... and Anyone Else Just Starting Out.

If you know a young person who's graduating this year... or if one of your 2008 goals is to increase your income... pick up a copy. Learn more about this and all of Michael's books at his website.]

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Wealth and Wealthy People

Monday, May 12th, 2008

There is no shortage of billionaires today. In 1985, there were fewer than 20 of them. Today, there are more than one thousand.

Wealth is gradually moving away from the United States. In 2003, eight Americans made the top 10 in Forbes’ annual list of billionaires. This year, only two (Warren Buffett and Bill Gates) made the list. And less than half of the entire list is made up of Americans.

Still, 443 American billionaires is nothing to sneeze at. Nor is their collective net worth of around $1.6 trillion. At least for the moment, the U.S. still has the world’s largest and most profitable economy. But India and China are catching up. Their economies are growing fast. And they are not wasting trillions of dollars on foreign wars.

With the dollar falling and our economy on the brink of a depression, it’s highly likely that Americans will continue to get poorer in the next few years. It’s also quite possible that the U.S. will be passed by China or India and become a second-tier economy. Even if that doesn’t happen, Americans will have to take quick and drastic action to protect themselves and preserve the wealth they have.

One of the best ways you can create and maintain wealth is by following the lead of people who’ve already done it.

About 33 percent of the very rich got their money through inheritance. The Waltons, for instance. The rest – two out of three – created their wealth through business. About half of those mega-entrepreneurs started with family money, and the other half started from scratch. These are the people – like Bill Gates, Warren Buffett, Sergey Brin, and Larry Page – who earned the wealth they have. These are the people I’d listen to if I wanted advice on how to succeed today.

I don’t know any of these billionaire entrepreneurs (BEs) personally, but I’ve done a lot of reading about them. I figured you might want to know what makes them tick and how they got where they are. Here is what I’ve discovered:

  • Formal education matters – but not always. The great majority of BEs – about 90 percent – have a college degree. But it’s not necessary for success. Among the world’s super-rich today, Bill Gates, Steve Jobs, Fred DeLuca, David Geffen, and Andrei Melnichenko didn’t graduate from college. And David Murdock (Dole Foods), S. Truett Cathy (Chick-fil-A), and Richard Desmond (British publishing magnate) never finished high school.
  • BEs work harder and longer than the people who work for them. Most say they work 50 to 55 hours a week. Some, like centibillionaire Canadian communication mogul Ted Rogers, work 12 hours a day. And some, like Bill Gates (when he worked at Microsoft) and eBay founder Jeff Skoll, took no vacations for years while their businesses were growing.
  • BEs are constantly looking for profit opportunities. When they hear about an economic or business development, they think, “How could I profit from that?”
  • BEs don’t dwell on mistakes. They view problems as learning opportunities. “I don’t remember any mistakes,” the late pharmaceutical billionaire James Sorenson told Forbes, “only the opportunity to overcome problems.”
  • BEs think neither completely positively or negatively, but strategically. Instead of thinking, “That’s impossible” or “I can do anything,” they think, “Is that possible?” and “If it is, how could I do it?”
  • BEs don’t believe in luck. In a recent Forbes poll of the 400 richest people in the world, none said they had become wealthy entirely by luck. Some said they considered luck to be a minor factor. Most, like Oprah Winfrey, consider luck an outsider’s way of describing someone who works hard and seizes opportunity. “Luck,” Winfrey says, “is preparation meeting a moment of opportunity.”
  • BEs are not driven primarily by money. “Studies show that the desire for financial success is no stronger among entrepreneurs than among those not starting a company,” says entrepreneur expert Kelly Shaver. Wharton School management professor Raphael Amit agrees: “No one is saying they don’t like their wealth; but what matters more is the innovation, the intense commitment they have to an idea and the difference it can make. Money is a byproduct.”

If you want to survive and prosper in the first decade of 21st century, emulate the habits of the world’s richest people. Educate yourself about money. Make conservative investments. And seize opportunities to start and/or invest in entrepreneurial businesses.

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[Ed. Note: Michael Masterson has said it before: One of the very best ways to get wealthy is to start your own business. At ETR's upcoming 5 Days in July Internet Business Building Conference, you'll learn how to build your own Internet business from the ground up. Check out the details here.]

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The Sad Story of Mike Tyson: A Spending Fool

Friday, April 11th, 2008

During the 20-year span of his career, Mike Tyson’s income exceeded $400 million. Yet, in 2004, before his 39th birthday, this amazing moneymaker was $38 million in debt….

The faster money came in, the faster it went out. Stories about his profligacy are already legendary. Tyson employed as many as 200 people, including bodyguards, chauffeurs, chefs, and gardeners.

He spent:

  • Nearly $4.5 million on cars and motorcycles
  • $3.4 million on clothes and jewelry
  • $7.8 million on "personal expenses"
  • $140,000 on two white Bengal tigers and $125,000 a year for their trainer
  • $2 million on a bathtub for his first wife, actress Robin Givens
  • $410,000 on a birthday party
  • $230,000 on cellphones and pagers during a three-year period from 1995 to 1997.

The purpose of this is not to shake a finger at Mike Tyson but to alert you to the dangerous temptation to spend more when you make more. As someone who grew up drinking powdered milk and wearing hand-me-downs, I understand the strength of that temptation.

[Ed. Note: The above was excerpted from Michael Masterson's New York Times best-seller Automatic Wealth for Grads... and Anyone Else Just Starting Out.

If you know a young person who's going to graduate this year... or if one of your 2008 goals is to increase your income... pick up a copy. Learn more about this and all of Michael's books at his website.]

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How to Survive – Even Profit From – the Declining Economy

Monday, April 7th, 2008

I was in Baltimore recently for meetings with some of my biggest clients. My job was to review their progress in 2007 and give them ideas about how to grow their already profitable businesses in 2008.

During that time, I taped an interview with J. Christoph Amberger for Today’s Financial News, his multi-media e-letter. In the interview, Christoph and I discussed the coming economic recession, as well as the special opportunities a declining economy provides for entrepreneurs. I thought you’d be interested in reading this rough transcript of our conversation…

JCA: The American economy may or may not enter a recession in 2008. But even if the economy doesn’t fulfill the technical criteria of a recession (two consecutive quarters of negative growth), anyone doing business or working for a business these days is experiencing or expecting a severe downturn.

Michael, we both have been through a couple of recessions and bear markets. What are the secrets to surviving a recession – and maybe even prospering in an adverse environment as an entrepreneur?

Me: That partly depends on the kind of recession. This one is different from recent downturns and stock market declines in three important ways.

First, there is the fact of inflation. Oil has already hit record highs this year. Gold is on its way to $1,000 an ounce. And a gallon of gas is costing $4 in some states. Agricultural prices are going up too. One figure I saw had inflation pegged at 6.8 percent on an annual basis over the last three months. But it is actually worse than that. Because that figure was based on government-supplied data. Our government has made an art of obfuscation – of hiding certain economic realities. Inflation is already eating away at our buying power. It is bad and it is getting worse.

Next, there is the falling dollar. The dollar is weaker now than it has ever been in history. That makes foreign goods more expensive. Which increases inflation. On the bright side, it makes U.S. manufactured goods more attractive as exports. But in most areas, we still can’t compete, price-wise, with China, India, and the Third World.

The third way this downturn is different is the level of debt. For the first time in modern history, American consumers owe more than they have. Credit card debt has skyrocketed. Mortgage debt, which increased enormously during the past 10 years as a result of irresponsible loans, is now at a crisis point because real estate values have fallen, making tens of thousands of loans untenable. It makes more sense to walk away from these loans than to renegotiate them. And behind all this is the federal debt – which has skyrocketed because of runaway spending by an earmark-addicted Congress and Bush’s $3 trillion war.

These are our economic weaknesses – and they are big weaknesses. But there are strengths too. Unemployment numbers are relatively low. Earnings are relatively good. And new business start-ups – which to me is always the most important indicator – are still strong.

Unemployment will certainly increase in some sectors. It is already a fact in the real estate market and will become a factor in banking and the financial industries that support real estate. But other sectors of the economy are okay for the moment. They may absorb some of these people. And new businesses will continue to create jobs, as they always have, because of the amazing growth of the Internet.

What all that amounts to, in my book, is a period stagflation that may be followed by a recession but may simply continue to exist until our debts have been paid by the working man, as they always are.

JCA: Not everyone is familiar with the term "stagflation."

Me: "Stagflation" was coined ages ago when I was still in college. It describes an economic period of both inflation and flat growth. The best description I’ve heard was provided by Rich Karlgaard, publisher of Forbes. He said:

"Stagflation is present when gas and grocery prices are rising faster than your paycheck is – and in an economy that is strong enough to employ you but not strong enough that you feel emboldened to ask for a raise."

There are three ways to defeat stagflation: (1) Tighten the money supply. (2) Restrict credit. (3) Lower taxes.

When too much money/too-easy credit is driving up prices – that’s classic monetary inflation. This should tell the Fed to restrict the printing of money and tighten credit. But so far they’ve been doing the opposite because they are afraid that if they tighten credit, the economy, which is already weak, will collapse.

Lowering taxes, particularly taxes on individual and corporate income, capital gains, and dividends would grow the economy by encouraging investment and stimulating production. This is classic supply-side economics. But it’s very unpopular today. The common view is that tax cuts reduce the effectiveness of government and increase government debt. But the evidence contradicts this. Government receipts usually go up after tax cuts because the economy grows and there is more income and profits to tax. When you reduce the cost of doing something, you tend to get more of that thing. Reduce the tax costs of production in America and you will get more production. More production means more goods and services competing for your dollars. "That’s how prices go down, not up," says Rich Karlgaard.

It’s simple. Supply and demand. If you want prices to go down, increase the supply. Incentivize the suppliers.

But that’s probably not going to happen because it’s not politically expedient for politicians to do it. Chances are our problems will be cured by a period of negative or flat growth along with inflation. This is the solution preferred by politicians because it is a way for average consumers to pay for government debt and bad loans without understanding they are paying for it. It’s another form of taxation.

Assuming we are entering a period of stagflation, certain investing principles apply:

  1. Cash is king.
  2. Buy value.
  3. Buy into the recovery.
  4. Invest in what you know.
  5. Limit expenses.
  6. Be ready to seize opportunity when it arises. Because it will arise.

JCA: Unemployment may kick-start some would-be entrepreneurs’ plans to start their own businesses. Are there any particular sectors that you think will do well, especially for new businesses?

Me: As I said, I don’t think unemployment is likely to be a huge problem – at least in the short run. But it will be a factor. More important will be the squeeze people will feel from stagflation. Prices are going up but not their salaries. This will trigger some start-ups. And there will also be lots of job displacements as some sectors of the economy – real estate-related – go down for a while and others – natural resources and even agriculture – go up. At some point in time – probably in the next year or two – real estate prices will bottom out. Then the vulture funds will come in and begin to buy up excess inventory. When that inventory is absorbed, the construction and building sectors will revive.

In the meantime, I favor:

  • Certain investments – like gold, oil and gas, natural resources
  • Certain services – such as for legal settlements, divorce settlements, business litigation settlements, home remodeling and repair
  • Information and advice on investing, retirement, estate planning, entrepreneurship, tax avoidance
  • Natural supplements and pharmaceuticals
  • Rejuvenation products and services
  • Retirement homes and other retirement businesses
  • Soft exercises and sports – such as yoga, Pilates, tai chi
  • Spiritual wealth information and products
  • Self-improvement information and products
  • Real estate (longer term)

JCA: Judging by the promises of our presidential candidates, U.S. businesses will almost certainly be hit with higher taxes, compulsory health care contributions, higher labor costs. Is it still worthwhile setting up shop in America ? Or should entrepreneurs relocate to a more business-friendly climate… like Eastern Europe… or China… or the Caymans?

Me: There is a big misconception here. One I had until I began doing business overseas. Location of the business matters only in certain industries that depend on cheap, unskilled labor. If you are producing clothing or furniture, it makes sense to have a factory in the Third World. But if you are producing sophisticated products for which labor is a small part of the cost – or selling information or advice – you can do it from the U.S.

Information and advice is especially good because the brute labor cost is almost non-existent. Thanks to the Internet, the cost of storage and shipping is minimal, so you can easily produce your product here and sell it anywhere… anywhere in the world.

In the coming recession, I would want to be in a business that has the following characteristics: (1) positive cash flow, (2) no debt, (3) no accounts receivable, and (4) no merchandise to store. That amounts to a service business or information publishing. Of the two, information publishing is better. In fact, it is the best business to be in for the foreseeable future.

There are some advantages in setting up overseas, but there are also many disadvantages. I would not pick up shop and open up overseas unless I had a proven formula that was working in the U.S.

JCA: The title of your latest best-selling book is Ready, Fire, Aim. What do you think, Michael? Will the coming recession require entrepreneurs and business owners to aim BEFORE they fire?

Me: Entrepreneurs must seize the day. You have to be READY to do that.

When real estate prices bottom out, there will be a rush to buy from the vulture funds. Private investors must be ready with protocols, plans, and money.

The same holds true for any business you plan to launch. Don’t waste valuable time and money trying to perfect it. Figure out a marketing proposition and test it as soon as you can. If it works, then refine it. If it doesn’t work, move on to the next thing. Ready, Fire, Aim!

JCA: What are the biggest mistakes an entrepreneur or business owner can make right now?

Me: There are three:

  • Starting a new business without knowing anything about it. I call this the Principle of One Step Removed.
  • Wasting time and money on activities that are not directly related to sales.
  • Not having a Disaster Recovery/Opportunity Plan.

JCA: That leads to my final question for you: Given today’s economic climate, what does a new business have to have to give it the best chance of success?

Me: It’s no different now than it’s ever been.

  • First is a management team with character, experience, and ingenuity.
  • Second is a plan that clearly identifies the way they will efficiently bring in customers from day one.
  • Third is their use of resources. Will 80 percent of them be devoted to making a profitable sale?
  • Fourth is capital. Do they have enough of it?
  • Fifth is product. Does their lead product have a raison d’etre in the marketplace?

JCA: Thanks for joining us today, Michael.

[Ed. Note: Michael Masterson's latest book, Ready, Fire, Aim: Zero to $100 Million in No Time Flat, has hit the New York Times, the Wall Street Journal, and now the Business Week lists of business best-sellers. Inside, Michael shows how veteran and rookie entrepreneurs alike can take their businesses to the next level. You'll learn how to identify and solve the problems that crop up during each stage of a company's growth... and how to take advantage of profit opportunities along the way. Order your copy of Ready, Fire, Aim now.]

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Don’t Pay Your Credit Card Bill Early

Wednesday, March 12th, 2008

Paying your credit card bill on time and in full is one of the best ways to stay out of debt. It’s also a good way to build credit. And it prevents you from running into tricky late fees and interest charges.

I always pay my credit card bill immediately, and never had a problem. But last month, I discovered a new way that credit card companies can stick you with a nasty charge.

I use the credit card in question for my business expenses, so there’s always a rolling balance. Because I knew I’d be traveling a lot in February, I decided to just pay the expected balance early and be done with it.

Imagine my surprise to see a $39 late payment fee on my February statement. And then my shock when I saw $89.37 in interest charges! I called the credit card company (USB). After investigating the situation, they explained that my billing cycle starts on the seventh of the month. Since my payment for February arrived early – on the sixth of January – it was credited to January’s accounting period. Therefore, the February payment was, technically, late. So I got stuck with a late fee. And despite the fact that I had overpaid by $7,000 in January, the computer "thought" there was a balance due for February that I had to pay interest on.

Fortunately, they reversed the charges. (Although it took getting a supervisor to speak to an accounting manager.) But you might not be so lucky.

Three things you can take from my experience:

  1. Pay your bills on time – but don’t pay them early. You might confuse the computer system.
  2. Keep a close eye on your statements. That way, you can pinpoint unusual charges immediately and deal with them right away.
  3. Before you sign up with a credit card company, know all the ways they can charge you for "bad" behavior. If you know the rules, you can work with them. But if you’re unaware, you can face a nasty surprise.

[Ed. Note: David Cross is Senior Internet Consultant to Agora Inc. in Baltimore. Untangle yourself from life's most perplexing situations in business, your personal life, and on the road. Pick up your free copy of ETR's Unscrew Yourself e-book and get 223 pages of our most practical insider information.]


 

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