Net Happiness is Not Based on Net Worth

As 2008 comes to a close it’s important to remember… well, it’s important to remember what’s important.  Ben Stein does a pretty good job of that in this article.  He is ostensibly talking about the fallout from Bernard Madofff’s Ponzi scheme, but he says a whole lot more:

We are more than our investments.  We are more than the year-to-year or day-by-day changes in our net worth.  We are what we do for charity.  We are how we treat our family and friends.  We are how we treat our dogs and cats.  We are what we do for our community and our nation.  If you had $100 million or $100,000 a year ago and now you have a lot less, you’re still the same person.  You’re not a balance sheet, at least not one denominated in money…

It’s a tough thing to remember in a business measured by commissions.  Our lives are surrounded by miracles and drowned out by laughter.  Having money may improve our lifestyle, but it does not improve us.  Losing money may cause us hardship, but it does not lessen us.  Our happiness is a function of how happy we see ourselves at our core.  It is a choice of awareness.  Ben Stein gets that.  Choose to be happy – it’s more fun.

Filed under: LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY , Ben Stein, happiness, Madoff

Do You Know How to Iron?

I attended a Christmas dinner party earlier this week.  It followed the script of most such dinner parties, which is to say: it was remarkable – the same way almost all social gatherings turn out to be remarkable.  They start slow: a few people in various corners of the living room, their conversations hushed and directed at the same person who accompanied them through the door not ten minutes earlier.  Then the wine is opened, some appetizers are laid out and enough people show up that a tipping point occurs.  As if by design the conversation hubs begin to move, some groups grow in size while others diminish, strangers are pulled in and couples become less dependent upon each other.  Eventually, the dinner is served and new friends engage in cross conversations around the table.  It is a predictable, if not awkward transformation leading to a unique treasure each and every time.

This party was no different.  I sat down on the couch and was soon engaged in a wonderful conversation.  Forced to guess her age I would say sixty, but she could have been seventy and she could have been fifty.  She was well traveled and she was observant.  It was easy to sense a certain wisdom in her person and I was fascinated.  She had recently returned from a trip to Europe and exuded a confident happiness that intrigued me.  “What’s the secret?” I asked.  She looked at me for a moment, trying to gauge whether I would understand her answer I supposed, then replied, “I iron my clothes now.”  She could see in my face that I was confused and I could see in hers that she had gauged correctly.  “Over in Europe, people still care,”  and she went on to explain how Europeans were more considered in the clothes they wore and how they looked.  This appealed to her in comparison with the casualness prevalent in America.  So… now she irons her clothes every morning.  It requires a little extra time and a little extra effort but it makes her day special.

I thought about that conversation all the way home.  She had chosen a small habit, applied it consistently, and changed her entire day.  The truth in that statement is universal.  We can effect tremendous changes by simply applying a new habit consistently.  What do you do for a living?  Would you like to be more successful doing it?  Choose one action – one simple activity  – and commit to doing it EVERY DAY.  That’s it really.  You do not need a complicated plan with multiple marketing objectives and the latest, most expensive, high-tech shiny object.  You only need to execute one well chosen action every day.  You could call ten people from your data base for referrals, you could add three new people to your contact list,  you could even leave the office and get belly to belly with at least one person; just make sure you are creating a habit that directly leads to business.

Aristotle said “We are what we repeatedly do.  Excellence, then, is not an act but a habit.”  My new friend from the party said “Iron your clothes every day.”  What do you say?

Filed under: LIFE THAT POPs , Success

Learning to Appreciate the Arts

Not everyone appreciates the entertainment value of watching the body politic.  But I do.  I stand hands on hips, amazed by the intricate movements each player contributes to their tap dance around the truth.  I listen to their spin, enthralled by the rhythm and stunned by their ability to stand upon the dais and look us in the eyes.  For all its pleasures though, most dedicated fans recognize the elements of tragedy that underlie every production.  There may be action and there will most certainly be humor; but the end is always the same: hubris and self-importance combine to bring about tragedy.  In the audience we may see it coming, but our recognition is too late to avert the inevitable.

Residents of California have been blessed with a double header as of late; two shows for the price of one.  True aficionados of this delicate art form will not only revel in the production value both shows offer, but the clever juxtaposition between them – the contrasting views of power they represent.

On the main stage we find the Federal Players and their prime-time rendition of The King and I.  The legislative branch of democracy writes a blank check and hands it to King Henry (Paulson) and his trusty side-kick President Bush.  They spend it on assorted items, many never contemplated when the check was written.  The legislature must be commended, however, for its heartfelt portrayal of the country bumpkins who did not see any of this coming.  In the final act, a chagrined upper house – the Senate – reasserts itself.  They choose not to spend money they don’t have on an industry that does not deserve it.  (This decision aligns with the wishes of the audience, but we assume the relationship to be coincidental more than causal.)  At the last moment: a twist!  We see the King spending the money anyway!  He usurps the Legislature’s constitutional and historical role as the means of appropriation.  It is a dramatic twist, shocking in its brazen contempt for law.  As the curtain comes down the audience is too dazzled by it all to recognize the depth of the tragedy they have just witnessed.

On the secondary stages we find the State Players.  If you travel to the “Will Never Be Ready for Prime Time” tent you find the players particular to California, a state which all art patrons know to be the source of every decent slapstick comedy in the past thirty years.  Tonight’s presentation finds a Legislature stymied by the people’s will.  A proposition that allows tax hikes only upon a two-thirds vote of the house and senate prevents them from a continuous bacchanal of taxing and spending.  Like Nero, they fiddle while California burns.  There is a comic element in the beginning as the populace, forced to tighten their belts and deal with tremendous cuts to their budget, watches a government – unwilling to employ a budget - throw temper tantrums over their denied access to the public’s ever thinning wallets. But the comedy turns dark when the legislature realizes they can redefine taxes as fees.  For instance: define all gasoline tax as a fee and remove the fee.  Now they can raise income tax, sales tax plus a multitude of other taxes and offset it all by the elimination of the gasoline tax.  Thus they have a revenue-neutral tax bill which, in their humble opinion, does not fall under the two-thirds law enacted to prevent them from doing that which they have done.  The tragedy: the gasoline fee was immediately reinstated… and raised.  All of this was done with a straight and earnest face.  Afterall, for the play to succeed the audience must believe.

Great entertainment indeed.  A federal King usurping the power of the legislature and a state legislature usurping the power of the people – that’s quite a bit of power being transferred.  As an ardent fan of the tragic form I am enthralled by the drama of it all, but as a member of the audience I wonder how much power is left to us and suddenly saddened by the tragedy of it all.

Filed under: POLITICAL & ECONOMIC FOLLY , California, Fed, government

A Poke (in the eye) From Facebook

You know, they say it isn’t wise – when you visit the Wizard of Oz – to look too closely behind the curtain.  Might not like what you see.  In Australia we were recently treated to a quick look behind Facebook’s curtain and I have to tell you: the king ain’t wearing any clothes!

Seems a nice young couple had bought a house, got upside down, stopped paying their mortgage and were doing everything they could to avoid the process servers and foreclosure coming their way.  Not altogether different from the unfortunate antics of a great many folks over in our neck of the woods.  I doubt many of us condone their behavior, but I find it difficult to root for the mortgage company either.  Sort of like watching a tether ball game between your ex-wife and her attorney: I don’t really care who wins just so long as both sides take one or two in the kisser.  Aaaaanyway, the mortgage company finally won the game.  Want to know how?  They looked this couple up and served them legal documents on Facebook!  (Read the full story here.)

Better yet, the local Supreme Court in Australia ruled that this was an acceptable use of the social networking platform.  Are you surprised?  Shocked?  Maybe even a little outraged?  I should say so.  I’ll bet Facebook was none too happy either.  Imagine the chilling affect this development may have on their social network site.  Let’s listen in:

Facebook spokesman Barry Schnitt praised the ruling.

“We’re pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication,” he said.

“The ruling is also an interesting indication of the increasing role that Facebook is playing in people’s lives,” Schnitt added.  The company said it believed this was the first time it has been used to serve a foreclosure notice.

I can only guess at the pride they’ll feel when the first paternity suit is served.  Are you kidding me?  I read this and the first thing I did was look up hubris in the dictionary, just to make sure I was using that word correctly in my initial reaction.  Turns out my problem was redundancy.  Webster’s used to define hubris as: “excessive pride or self-confidence.”  Now it simply says: “see Facebook.”  Did he say “… an interesting indication of the increasing role that Facebook is playing in people’s lives?”  Is that anything like reveling in the expanded role the stock market is currently playing in people’s lives?

Sydney University of Technology law professor Michael Fraser:

“It does change the rules of the game because people thought of these as social sites; now they can be used to serve official court documents and it may change the way people establish a presence on the social networks and the way they use them.”

Do you think?  We are told by Rory Ryan, a Baylor Law School associate professor, that U.S. users do not have to worry about being served though the program yet.  Yet?  Oh really?  Have you ever seen the 9th Circuit Court of Appeals in action?  I am here to tell you I have as many problems as the next guy – maybe more.  But do I want my dirty linens cleaned on Facebook?  Do you?

Filed under: BUYERS, INVESTORS, LENDERS, REALTORS, SELLERS, WORLD OF 2.0 , Facebook, Social Media Marketing

If Mortgage Rates are Not Going Below 5%, Where Are They Going?

There was an interesting post yesterday asking Why Won’t Mortgage Rates Drop Below 5%?.  Brian Brady answered the question with a supply and demand analysis and as usual, I cannot disagree with that reliable old tool (the supply and demand analysis… not Brian ).  But I wonder, is there more at work here than supply and demand?  Reading his post reminded me of something I have been telling my clients lately and meaning to share with everyone else:  Belief runs the show.  I suggest that Belief & Fear have supplanted Supply & Demand as our modus operandi.

The markets of late are moving as much on belief as they are on fundamentals.  Don’t get me wrong; I’m not complaining.  At least fundamentals is a player again.  For the last couple of years the markets based their valuations on leverage, blind optimism and a smug sense of higher intellect – all the while recording profits in the sand.  It is kind of nice to see some fundamental analysis come back into vogue.  But we do not relinquish old habits easily.  If I believe that ABC Company will (or should) profit ten cents per share, I will pay a price based on that belief – almost as if the profits were already announced.  This, of course, is what leads us into the strange world of Wall Street where a company’s shares can get whacked even after they announce record earnings IF their earnings turn out to be less than I thought they should be.

What does all this have to do with mortgage rates?  The fed has hinted at buying down mortgage rates using various tools at their disposal.  The market has now partially priced this belief into the mortgage backs.  Rates are down, at least to some degree, because the market believes they will drop even lower.  Once again, we equate assumptions with knowledge.  I don’t mind it up to a point; and here’s the point: lately I have had more than one client elect to wait on their purchase (or at least their purchase mortgage) because they want a piece of that sweet, 4.5% pie we all know is coming.  But what if we are wrong?  What if the fed wakes up tomorrow and says “Hmmm, after reviewing the utter failure of every stimulus idea we’ve tried to date; we decided that buying down mortgage rate is no longer on our Brilliant Things To Do list.”  What might that do to rates?  I suggest a nice increase would be in order.  Wouldn’t that be a kick in the pants?  Everyone is holding out for a pie that was never in the oven in the first place AND burns their fingers on the stove while waiting for it.

In the world of marketing, nothing tops a perfect pair.  That’s what I call it when you have something of value to share AND it comes with a time pressure to act.  The Perfect Pair.  When you talk to your clients over the weekend, remind them that the low rates we have now are a product of belief in even lower rates to come.  Then ask them how confident they are lately in the government following through on the various trial balloons it sends up.  Then ask them why they aren’t pouncing on the artificially low rates we have right now!  Because they haven’t found the right house yet?  Good answer.  That means the ball’s back in your court.

Filed under: BUYERS, INVESTORS, LENDERS , MARKETING, Rates