No Day at the Beach

Yesterday was no day at the beach.  Okay, technically I suppose you could twist the facts around and put a major league, curve ball spin on it and call it a day at the beach.  You know, if you want to get hung up on little details like how I spent the entire day at the beach.  I packed up my two boys, an ice chest full of Cheetos and one large cantaloupe.  (I didn’t bring a knife and apparently you don’t eat those things like an apple, so I returned with one empty ice chest and one large cantaloupe.)  I met up with my good friend and occasional confessor Brian Brady and his lovely daughter.  We were later joined by his wife, whom I’ll just call Mrs. Lance Armstrong Brady for this story, and we spent an entire, glorious day at the beach.  But other than that, yesterday was no day at the beach.  Yeah, okay, I see your point.  Put it this way, it wasn’t a typical day at the beach.

 For me, a typical day at the beach would mainly involve long discussions with Brian on solving the world’s problems (ask us sometime… we’ve got the whole thing whittled down to a small pamphlet) and occasionally testing the sandy hardness of the ocean floor by falling off my boogie board.  (This is all done purposefully and as part of my larger interest in oceanography.  I could ride a wave on a boogie board if I wanted to…)  Sometimes, just to spice things up, I see how long I can hold in my gut without passing out in front of an attractive, bikini-clad woman.  They usually do a surprisingly good job of pretending to not even notice me, but we’re so close to Hollywood I assume most of them are just acting…  Anyway, that’s a typical day at the beach for me.  But not yesterday.  Yesterday I was distracted by a gigantic hole.  Yes, a hole… in the sand.  Like I said: not your typical day at the beach.

 My two boys and Brian’s daughter spent a good chunk of their morning – when they weren’t out on boogie boards catching waves and staying upright, as if that’s the only way to ride one of those things – digging a hole.  I know, that probably doesn’t sound like much fun, but you have to trust me: catching waves on a boogie board can be fun.  In any case, they dug themselves a pretty good hole.  It was big and deep and had a nice groove cut toward the ocean.  Once the tide came in, they’d have themselves a nice little hot tub just made for three.  (I actually overheard one of them… okay, it was one of my boys, say something about turning it into a jacuzzi.  I’m not sure how they planned on creating bubbles, but I figure what I don’t know won’t hurt me.)

 Sure enough, as the tide came in all their hard work started to pay off.  At first there was only a little water, but it was obvious that before long they’d have a first rate hot tub.  It was about this time I began to notice other boys and girls approach; as time passed more and more came until we had a regular Hole in the Beach Gang.  They thought this was the neatest thing they’d ever seen and soon began to splash in the hole too.  It didn’t occur to any of them to ask if they could play in the slowly filling “hot tub.”  I guess they figured holes were just something that appeared at the beach without any work; kind of a no-cost benefit they were all entitled to play in and enjoy.  Pretty soon, my boys and Brian’s daughter came over to us and pointed out that they weren’t getting to play in the hot tub they’d created because there were “all these kids in there who didn’t even help build it!”  I have to say I was shocked, shocked to learn my kids possessed a sense of ownership over this hole.  Why?  Because they got there early?  Because they worked long and hard on it?  Is that any kind of a justification for not sharing it with kids who were busy playing video games all morning and only stumbled into the hole on their way to the ice cream stand?  Being a philosopher, I sat down to formulate a deeply moving response to our children’s dilemma.  Brian on the other hand, ever the pragmatist, just looked at them  and said: “Life’s tough. Wear a helment,” and sent them off to clear jelly fish so he could enter the water for a bit.

I stayed and watched “the hole” though.  I’d become intrigued and I’m glad I did because the most interesting thing happened.  The original three creators of the hole, once they realized they weren’t going to be able to enjoy what they’d built, wandered off to find new adventures.  (At least, I think that’s what they did.  Look, it’s a big crowded beach surrounded by pounding surf and occasional rip tides.  It’s not like I can keep an eye on them every minute…)  The others though, the ones who jumped with both feet into the hole they didn’t create, they stayed and they played and they made that hole their own.  But a very strange thing began to happen.  With each surge of ocean water came a large deposit of sand and the hole became less and less of a hole (and less fun) as it filled with water. 

 Now here’s the really odd part: the kids all just looked at each other as it was happening.  They knew their hole was de-holing (don’t bother looking it up, I promise you it’s a word), but they didn’t know what to do about it.  The various shovels and buckets originally used to create the hole were all still there, lying on the outer edge, but no one thought to grab a shovel and contribute.  They just kept playing in less and less water, till one by one they began drifting away.  Maybe some found another magically appearing hole they could take as their own.  I imagined others discovering a blanket spread with hot dogs and chips… and helping themselves to the magic of a free lunch.  It wouldn’t surprise me if one or two went off in search of our three kids – the original builders of the hole – to complain about how it wasn’t built big enough and didn’t last long enough.  (I don’t know for sure where any of them went because that would have required me getting up out of my beach chair and I was, at that particular moment, testing another one of my scientific theories about compression of sand under extremely heavy loads.)

Toward the end of the day, my sons and Brian’s daughter came back around and looked at the hole, or rather: what was once a hole.  It was pretty filled in and the sides had crumbled under the weight of so many kids.  Their shovels and buckets were strewn about.  I asked if they were going to build another hole and they shook their heads no.  ”What’s the point?” my older son asked.  “Yeah,” my younger son chimed in, “if we do, we won’t get to play in it anyway.”  Brian’s daughter summed it up, saying: “I think our hole digging days are over.  We did all the work, but someone else got all the fun.”  Kids say the funniest things, don’t they?

 As we broke down the tents and packed the tools and tried to carry as much sand back to my recently detailed car as possible, I remember thinking to myself: I sure hope these little guys enjoyed themselves today, despite what happened with their hole.  And I certainly hope they’re not assimilating this one-time episode into any sort of large-scale, world view.  Deep down I hope that by the time they become adults they can look back on this day and say: ”Life is no day at the beach.”  Just in case though… wear a helmet.

 

Filed under: LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY

There are Only Four Things Certain Since Social Progress Began

(alternatively entitled – with all due apologies)
Though I’ve Belted You and Flayed You, By the Livin’ Gawd That Made You;
You’ve Made a Worser Man of Me, Socialism

“And a woman is only a woman, but a good cigar is a smoke”  (from The Betrothed).  I have loved Rudyard Kipling from the very first time I read Gunga Din.  His pace and pattern appeal to me, as does his archaic sense of manhood.  I have argued before, and dare say would do so again quite successfully, that his poem If  is among the finest pieces ever written in the English language.  Of all the inspirational articles I have written and the many orations I have given, much time could have been saved had I simply gone in, recited If and walked out.  If you have never read it, stop what you are doing now and do so.  The answer to just about every event you may encounter in your life is contained in that poem.

This post, however, is not about Kipling’s great work If.  (If it were, I would certainly link to my own, real estate based homage to wisdom, and I’ve done no such thing.)  No, this post is about another poem Kipling wrote, one I am chagrined to admit I only recently discovered.  More mortifying still, I discovered it only because Glenn Beck is using a couple of lines from this poem to plug a new book of his.  (I’m not denigrating Mr. Beck, only lamenting the discovery of fine art through it’s crass commercialization.)

The poem refers to Copybook Headings and I was unsure what those were.  For the one or two of you out there as simple as I am, copybooks were primers used by school children to perfect their penmanship.  Across the top of each page was written a Biblical passage or similar lesson of moral imperative.  The children would copy the line over and over on the page below, thus improving their cursive and at the same internalizing certain truths.  Truths that, according to Mr. Kipling, are forgotten at our own peril.

Printed below in its entirety, this poem was written almost 100 years ago.  But you’d be amazed how little has changed in the theater of the absurd we call politics.  Mr. Obama and the Neo-Pros who share his religion are fairly called out in these words, but then so are we…

The Gods of the Copybook Headings

As I pass through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.

We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind.

We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market Who promised these beautiful things.

When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: “Stick to the Devil you know.”

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: “The Wages of Sin is Death.”

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: “If you don’t work you die.”

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

Filed under: LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY

The Mirror Effect

Do you ever wonder how to deal with someone else’s opinion of you – especially if it’s negative?  Not how to handle a negative or even rude opinion; early on you should have learned that politeness is how we handle almost any situation.  No, I’m asking if you have a mechanism or coping skill for those times when you discover what someone else thinks about you and it’s painful in some way?  This is not an uncommon experience and might be especially common for real estate agents!  (I’ll leave you to find your own context on that one.)  Personally, I’ve heard a number of answers to this question and they are usually similar to the one found in The Four Agreements by Don Miguel Ruiz.  While not completely representative of everyone’s answer, it’s close enough. This solution seems to lie in finding ways to ignore, become indifferent to, or otherwise devalue the offending expression.  (Mr. Ruiz, for example, points out that when someone says something about us, we should remember they are limited by their own view of the world – their own prism – and realize what they say, says a lot more about them, than us.)  This is both obvious and oblivious.  May I suggest something a little different?

The Mirror Effect
Of course other people see things through their own prism; so what?  Their opinions can not – and do not – hurt me in the least. How could they?  They are only words and, depending on your philosophical bent, the person saying them may or may not even exist!  If I feel hurt or pain (or happiness for that matter), you can be sure I am the sole cause.  I hear the words, I interpret them (through my own prism Mr. Ruiz) and I create feelings in reaction to my interpretation.  I create…  That’s where the wonderful opportunity lies.  The negative or painful (or happy) feelings are created from within.  That’s not just a difference regarding who is in control (per Mr. Ruiz and the rest, I am to develop some ability that will counter the hurt caused by the words or expressions of others – thus giving them the control and me the dependent action).  It’s more than that.  It is how we evolve and become happier and more peaceful; how we become more succesful possibly, and more free definitely.

Suppose someone says to me: “Sean, you are not much of an athlete.”  I would not be stirred by this.  I know my athletic accomplishments.  I know my athletic abilities.  I am comfortable with who I am as an athlete.  I may believe this person to be mistaken or misinformed or ignorant, but I do not take their expression personally – I am not hurt by it. They could have also said: “You are not as good an athlete as Michael Jordan.”  Again, I would not be stirred by this.  Just as I know who I am as an athlete, I know who I am not and my self worth is not dimished by this comparison.  If, however, ten minutes later this exact same person said to me: “Sean, you are a bad father,” I may indeed walk away in pain.  I am divorced and a single dad; I have doubts about whether or not I am being everything my boys deserve.  So when I hear this I may feel angry or hurt; maybe I’ll want to argue and “convince” this person how wrong he is.  Why is that?  Why didn’t I want to convince him of how wrong he was ten minutes ago when he brought up my athleticism?   This is the same person after all, yet what he thought of me as an athlete had no affect and what he thought of me as a father did.  What changed?  Obviously, what changed was my interpretation; my reaction; my feelings on the subject at hand.  The problem does not lie with other people’s opinions, otherwise I would have been hurt both times.  No, the diffence in those two scenarios is… me.

When confronted by an opinion I knew to be false (or at least believed to be false), I was not bothered.  My vision of myself, athletically speaking, was in alignment with my day-to-day experience.  But that last opinion, the one about my being a bad father, that bothered me a great deal.  Why?  Because there is a truth to it – or at the very least I fear there is a truth to it – that I do not wish to face.  This is, in effect, a mirror held up to me – and I don’t like what I see.  That’s why we can’t cultivate an indifference; the indifference would be to ourselves.  That’s why Mr. Ruiz’s answer is so off track too: how do I devalue the prism when it is my own?  I cannot.  Even if I could… what an opportunity I would miss.  What a blessing upon myself I would be throwing away.

The Opportunity!
The next time someone lets you know what they think about you and it hurts, don’t argue with them or run away from the pain or try to devalue what was said.  What’s needed isn’t a coping method.  Instead, thank them!  Thank them and mean it.  (After all, they were merely the person holding the mirror and nothing more.   Besides, this has the added benefit of messing with their heads.)  Then walk away and realize you’ve just been blessed with an intimate look at yourself.  A look we don’t like, no question; we’re face to face with how badly our internal vision of ourselves does not match our external expression of ourselves.  But if we’re honest about it, that look is also a revelation – and a roadmap to greater happiness and success.

Live a Life that POPs

Filed under: BUYERS, INVESTORS, LENDERS, LIFE THAT POPs, REALTORS, SELLERS

A Future By Halves vs. A Future of Have-Nots

Voluntaryism vs Social Democracy

Two quick polls: First, all those who enjoy belonging to a society that provides some minimal safety net for the least among us, please raise your hands… Ahh, I see some hands going up. Very good. Second, all those who occasionally enjoy being forced to do something against their will by threat of a gun, please raise your hands… Right, masochists aside I see no hands raised. Very good. The problem is, you cannot have one without the other. Thus spoke the Voluntaryists.

On Monday night I was invited by fellow Bloodhound Brian Brady to attend a debate entitled Voluntaryism/Market Anarchy vs. Democratic-Socialism held in a little hot bed of thought and cafe called Cafe Libertalia. It was an engaging evening spent listening to the point / counter-point discussion on the very legitimacy of government itself. You can gain a more detailed understanding of Voluntaryism here and of Social Democracy here. (Although if you’re a regular reader of BHB you’ve no doubt gained quite a bit of free-market, Voluntaryism philosophy from our Greek emeritus: Greg Swann.)

I must be honest in admitting that I know quite a bit less about Social Democracy philosophy than I do Voluntaryism, and the debate was of little help. The team on the Social Democracy side presented a less than cogent argument for a society wherein free markets and democracy exist in ever changing ratios, as dictated by the people themselves. When asked, the speakers could not name a single  society where this system currently exists.  When pressed, they admitted that the countries currently attempting it are abysmal failures.  But this did not dissuade them from the idea that it could exist. Their logic – such as it was – stemmed from the idea of pure democracy (one man, one vote) and concluded that the majority would decide which means of production should be left to the free markets and which to the nurturing womb of centralized government. “How can you be against that?” they asked.  “We’re not advocating government take-over; we’re saying it should be up to the whole of the people to decide government’s role in the economy.”  When asked what coercion should be applied to those in the minority who might disagree with the majority decision, they answered by questioning the meaning of coercion. I’m not sure if that’s a straw man argument or circular logic, but it leads nowhere either way.

Their crowning point was that coercion exists in a free market too, just as it does in a system of government. Example? If you don’t pay your property taxes (system of government problem), you are eventually led from your home at the point of a gun. Similarly, if you don’t pay your mortgage (free market problem) you are also eventually led from your home at the point of a gun. When the spuriousness of comparing an involuntary agreement such as taxes with a voluntary agreement such as mortgages was pointed out, this was their response: “If I were to video the outcome of both events and show them to you, you would not know which was which; therefore, they are the same in the end.” (Leave it to a theoretical physicist to conceptualize an experiment wherein the proximate cause of events can be excluded from an analysis of the outcome.) Truly embarrassing.

The Voluntaryists drove home their main argument: each of us is solely and 100% the owner of our selves. By logical extension, we are then also the owners of the fruits of our efforts. Thus: property rights – which are the core of true free market philosophy. With this I have no quarrel. If, at any point, you believe you have the right to take from me against my will then you must necessarily believe that we are not the sole and 100% owners of our selves. This leads to an obvious question: “How much of me do you believe you rightfully control?” This is not a difficult argument to win and by my estimation the Voluntaryists did so, despite some rather clunky analogies.

If you’re still with me, you might ask why I am posting on such an esoteric subject. Two reasons: first and foremost, if you are in the real estate industry you are a business owner (at least to some degree) and so this should not be esoteric to you at all. This is a subject matter that cuts to the very heart of entrepreneurial effort and reward. Again, Greg does a much better job than I at making this link clear, but clear it should be. There is a growing and manifestly important debate growing in our country, and whether the terms are used or not, that debate is over Voluntaryism vs. Social Democracy. My second reason, however, is more direct. Based on my title it should be obvious what result I foresee if we are to follow the philosophy of Social Democracy: an eventual citizenry comprised of have-nots (with the possible – probable? – exception of those elite by whom the means of production are directed). But what about the end game of the Voluntaryist philosophy?

To be more precise: even if we were to all agree that an absolute free market system is the desired outcome, is it attainable? I cannot bring to mind any society that has existed over time – on any acceptable large scale (nuns in a convent live in a very direct form of communism, but that does not prove the viability of communism on any scale) – which has not formed a government in deed if not word. In other words, if Voluntaryism is the ideal to which we aspire, is it actually attainable or is it more accurately a yard stick by which to measure progress. A progress necessarily gained by halves, but never in total?

Filed under: LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY

The Only Thing We Have to Fear, is Ourselves

In my late twenties, as a trader on the floor of the options exchange, I was a “Master of the Universe”.  That’s a very common affliction down there.  Apparently, when you put a bunch of young, fearless, risk-takers together and give them the power to move markets around the world, you end up with a bit of a monster.  At one point I attended a symposium with my fellow traders; each of us secure in our status as Cowboy and Superman rolled into one very special gift for the world.  We listened to the latest market analysis systems and celebrated our shared royalty.  Amidst all the revelry was a speaker who didn’t have a financial background; he was more of a self-help, motivational kind of guy. (Believe me, the last thing that group needed was motivation!)  I remember not paying much attention to him – you know, being a “Master of the Universe” and all – but I wish I had.  He wasn’t there to motivate us, he was there to help us – to keep us from losing ourselves… an effort made mostly in vain.

Within days of the symposium all was blissfully forgotten; let’s face it, what could these talking heads possibly teach a “Master of the Universe?”  All, I should say, but this bit of wisdom from the self-help guru – the one who was so out of place.  This stuck with me and I damned him for it:

If you want to know who you really are, listen to that quiet voice you hear while driving home after a meeting, late at night and tired, with no one else in the car and the radio off.  That voice is who you really are… and the fears that voice brings forth are what you really fear.

Over time I was pretty sure I understood what he meant… but I didn’t.

I was thinking about this the other day.  I had just finished with a group of agents in my POPs Program, where we had been favorably comparing the stress AND the fun of being an options trader with that of being a real estate agent.  While driving home afterward, I was listening to that little voice and it hit me: I realized that my innermost fears are not really fears at all.

They’re a reflection – deep down inside – of my belief about what I do and do not deserve.

So, for instance, if you find that during those quietest of moments, when you listen to the little voice, you are fearful of never having enough money, it’s because deep down inside there’s a part of you that doesn’t believe you deserve wealth.  In the same way if you fear unhappiness or things that make you unhappy,  it’s because somewhere in there you don’t believe you deserve happiness.  Our quietest, deepest fears are really sign-posts to our belief systems… and this is great news!

Understanding this, we can rid ourselves of these fears.  Just the act of listening and understanding what fear is goes a long way toward that goal: “Fear flees from the light of understanding.”  But we can do more; we can take an easy, positive step by simply writing a statement of affirmation and reading it every morning.  Read it with conviction and without fail.  Never underestimate the power of consistency. Water running over a rock appears to have little affect, but water running over a rock over time, is the Grand Canyon! So, if your fear concerns scarcity and you realize that a part of you believes you don’t deserve wealth, simply write a statement of affirmation: “I am a successful and good person deserving of wealth.”  Read this every morning with conviction (that’s the real trick here) and sooner than you think you will overwrite the belief.  It is just that simple.  (Of course, there’s a good chance those fears will be replaced by some new and different fears… but that’s a story for another post!)

In the field of real estate, your beliefs about yourself are just as important to your ultimate success as your knowledge and expertise.  Listen to that little voice and face your fears.  Not only will this open the door to a flourishing career, it will lead to a greater understanding of who you are… and why each of us is truly a “Master of the Universe.”

Filed under: LIFE THAT POPs, REALTORS

Join the DOER Revolution

The $8000 first time home buyer tax credit is a mistake.  Congress should have enacted the original idea: a $15,000 tax credit.  This goes for the repeat home buyer tax credit as well.  As a matter of fact, I would like to have seen both tax credits even higher.  If you’ll maintain an open mind for the next few minutes, I hope to show you how embracing these tax credits actually creates a “win-win” situation that benefits you and this great nation.

The inherent spirit of humankind is individualistic, creative and inclined toward action.  The heart of man is inexorably drawn toward freedom: freedom to live, freedom to express and freedom to choose.  No matter what short-term damage is effected by an oppressor or institutionalized by a government, men and women will devise ways to rebuild and overcome.  Even in countries where the idea of freedom has been systematically driven out by force, we witness people taking action toward freedom.  It is a natural state that can be delayed, but not denied.  We are DOERs.  This country, the United States of America, is the poster child for taking action toward freedom.  We are a nation made up of DOERs.

So what does this have to do with the tax credit?  It empowers us with a “win-win” opportunity.  The immoral bribes to home buyers, the unconstitutional mandate for health insurance, the socialistic bail-outs, even the very destruction wrought by stimulus packages:  embrace them all!  These are all opportunities to make that “win-win” choice.  Embrace the home buyer’s credit and ACT on it!  Be a DOER.  It’s the DOERs who create the success of our society.  A nation of DOERs – of independent, entrepreneurial, action-based DOERs – will always bring about the necessary changes to save this republic.  If you desire your own success, then you desire to become a DOER.

More specifically: every action you take to help another person receive the tax credit strengthens you as a DOER while at the same time weakening the architects – the very architecture – that imposes itself upon a free people with that tax credit.  Eventually, the system cannot bear its own weight; the center cannot hold.  In taking action to embrace the tax credit you not only strengthen your potential for long-term success  by being a DOER, but you effect the implosion of the progressive state.  In other words, you hasten the collapse of an economic enemy by using its own tools of destruction and in the action of using those tools, in being a DOER, you reinforce and strengthen the very reason such a system cannot stand in the first place.  It’s a “Win-Win” proposition.

One last thought: there are those who fear taking action because they don’t know what will happen after the crash.  That’s actually a  surprisingly insignificant concern.  We don’t control outcomes and so we cannot know them.  Rather, we take action based on our knowledge of who we are, what we believe and what we desire.  We are a nation of DOERs.  If you believe that, than you have no reason to fear your desires or the brave new world after the collapse.  A more legitimate fear might instead be: “what happens to me after the collapse if I am not a DOER in a society being restored by DOERs?”

Embrace the government hand-outs and credits and stimulus spending.  Encourage an immediacy so apocalyptic that no one has time to read the laws they enact.  Take action and be a DOER… Join the revolution.

Filed under: LENDERS, LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY, REALTORS , Doer, Home Buyer Tax Credit

The #1 Obstacle to Success

What keeps us from our goals?  Whether it be work, personal, health, money; what is the number one obstacle to achieving our potential?  Assuming our goals are attractive to us and within our ability, shouldn’t we reasonable expect to achieve a majority of them?  Yet most of the people I talk to say they’re not living up to their potential… yet.  But they will, once they get around a few obstacles:  once the economy improves and rates come down; just as soon as the boss recognizes that butt kisser for the incompetent he really is; after all the Holiday parties with the pies and cookies and egg nog.  You get the idea.  But the truth is, none of that stuff “out there” is the real obstacle.  That’s because there’s nothing “out there” nearly so scary or powerful or destructive to our success as we are to ourselves.  Most of us carry around a few self-doubts, maybe even a few “I can’ts.”  If asked, I bet you could list five things you don’t like about yoursef without even really thinking about it.  It’s as if we’ve gone on a date with ourselves and halfway through dinner decided we’re not good enough for the other person… and the other person is us!

Knowledge is power and knowing that we are our own biggest obstacle is very powerful. Yes, you have to have goals.  Yes, you have to create a plan for achieving them.  But I guarantee that plan will be much more successful if its very first step, is to fall back in love… with yourself.  Sound a little corny?  Maybe easier said than done?  Fear not: I’m going to leave you with a small, powerful two-word phrase for that all-important first step.  Not long ago I was talking to my 7 year old son and I was congratulating him on figuring something out for himself.  He immediately threw his arms into the air and said “Yeah Me!”  No pretense.  No guilt.  Only genuine admiration.  Imagine that: “Yeah Me!”

Go ahead, try it yourself.  Stop reading for a moment, put your arms in the air and say “Yeah Me!”  Come on… say it with feeling – really mean it.  “Yeah Me!”  Does it feel a little funny?  Make you feel a bit awkward; a little self-conscious?  That’s not unexpected; remember, we’re the same people who decided we weren’t good enough while on a date with ourselves!  Try this: for the rest of the day say “Yeah Me!” every chance you get.  Say it at least 100 times and mean it every time you say it.    Hold a vision of yourself, goals firmly in hand, during that brief moment it takes to say “Yeah Me.”  Most importantly, don’t stop doing it all day long.  You see the moment it stops feeling funny, is the moment you discover how successful you can really become.

“Yeah Me!”

Filed under: LENDERS, LIFE THAT POPs, REALTORS , Success

On Mortgages and Moral Compunction

What would it take for you to walk away from your mortgage?

Kenneth Harney, in his column Nation’s Housing, reports on an interesting study recently done by the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management.  This study took a look at homeowner’s attitudes toward mortgage defaults, specifically what’s come to be called “strategic” walkaways or decisions to bail on a mortgage due to purely economic reasons.  The study found that “26% of the record number of home mortgage defaults across the country” were strategic – the homeowner had the ability to pay the mortgage but chose not to because the debt was greater than the asset.  In other words, one in four of the current foreclosures is not due to hardship, but rather a lack of compunction.

My partner and mortgage rate expert, Brian Brady, has for some time now railed against the disappearance of moral compunction with regard to mortgages.  His contention, as I understand it, is that moral compunction was  priced into the model by lenders.  There has historically been a stigma attached to not paying one’s debts, especially one’s home mortgage debt.  This may or may not be true; I am no expert on the history of mortgage defaults in our nation, but it is certainly compelling.  If accurate, the obvious question then becomes: to what degree did moral compunction affect rates and if it is indeed gone, how much higher will rates go?

There is no real mystery to how mortgage rates are priced.  Mathematicians create models of mortgage “behavior” based on the 4 C’s: Capacity, Capital, Collateral and Credit.  Of these four, Credit is really what we’re talking about here.  Your income, your assets and the property’s value are theoretically objective but your credit… well, it’s not really credit that’s being measured here is it?  It’s your Character; your likelihood to honor your debts, although lenders don’t like to say that because it has a snooty, superiority quality.  Make no mistake though, character is most definitely being evaluated during the loan process.   So the question seems to be: How do these mathematicians change the models to reflect a decrease (or abandonment) of moral compunction?

That sounds like a difficult question to answer but I think we can make it a little easier.  If we read further into the study by co-authors Paola Sapienza, Luigi Zingales and Luigi Guiso we realize there is in fact a sliding scale of moral compunction practiced by American homeowners.  (That last statement should be read with tongue in cheek; sliding scale and moral compunction are oxymoronic… you cannot be a little bit pregnant.)  When asked, “81% of household heads said they believe intentional defaults on mortgages to be ‘morally wrong’.”  Yet that number dwindles down as negative equity grows; by the time we get to negative equity of $200,000 fully one in three of these same homeowners would strategically default.  Turns out the act they found “morally wrong” was actually just mis-priced.  In other words, a great many homeowners find morality to be a good thing… taken in moderation.

Besides negative equity, the authors discovered a number of other factors that might influence a homeowner’s decision to strategically default, including age (younger were less likely to have a moral issue) and political affiliation (self-described political independents were also less likely to have a moral issue).  But the other significant factor was familiarity.  Not only did having a greater number of foreclosures within the local community increase the likelihood of a strategic foreclosure, but “owners who (knew) someone who defaulted strategically (were) 82% more likely to default themselves, compared with owners who (did) not know anyone in that situation.”  As the old saying goes: “Familiarity breeds contempt.”

Earlier I wondered how mathematicians could change mortgage pricing models to reflect the empirical observation that making one’s mortgage payment has lost moral compunction.  Based on this study, there is no moral component and probably never was.  The first step then, is to remove the variable of morality altogether.  The model should instead add two more C’s: Community and Contact.

• Community would account for the percentage of foreclosures within a borrower’s local area, probably using the same distance radius now used for comps in appraisals.  Deriving a statistically significant factor for the likelihood of foreclosure based on the percentage of foreclosures within a Community should not be too difficult
• Contact would ascertain whether or not the borrower is acquainted with someone who has walked away from their mortgage.  Again, if a borrower is 82% more likely to walk away from their mortgage based on knowing someone else who has done so, that’s a pretty important variable.

Does that last one sound a little intrusive to you?  We ask similar questions of potential jurors in order to seat an impartial jury.  Is accurately pricing mortgages for the housing industry somehow above such questions?  Have you looked at a mortgage application lately?  It is easily the most intrusive document ever created for general public use.  Have a job?  We want to talk to your employer.  Got divorced?  We want to look at the entire decree.  Own your own business?  You better just send me a copy of every schedule of your tax returns for the past two years.  There is a list of over a dozen declarations you must attest to regarding law suits, bad debts, citizenship and so on.  Another question regarding your familiarity with strategic foreclosures would hardly encumber the process.

Like it or not, this issue has to be resolved.  Without a substantive discussion and response to strategic foreclosures, mortgage pricing models will have no choice but to account for foreclosures – both hardship and strategic – with across the board increases in rates.  That is the easiest hedge against increased risk.  But such indiscriminate rate hikes will only serve to diminish the housing industry and punish the vast majority who have acted responsibly.  Does that sound moral to you?

Filed under: LENDERS, LIFE THAT POPs, POLITICAL & ECONOMIC FOLLY, SELLERS , foreclosures, Moral Compunction

Finding Your Perfection

Earlier this week I was watching some old reruns of M*A*S*H.  What a well done series that was; funnier the first few years than it was later, in my opinion, because they got more political.  But the later years did give us a terrific character: Major Charles Emerson Winchester III.  Do you remember this guy?  What a pompous ass he was.  Speaking of pompous asses, why am I spending your valuable time reminiscing about a sitcom?  Good question, but I’ve got an even better answer.

I’m a big believer in being present.  If you’ve read any of my stuff or heard me speak, then you already know this.  As a matter of fact, if you’re anything like the agents I meet out here, you might even be tired of hearing it.  You might find the whole topic a little touchy-feely.  “There goes Sean again.  He might be a debonair, handsome, witty, intelligent, entertaining, man-of-action; but I’m tired of the Zen-happiness thing.  (I took a little license imagining what your thought about me might be;  you might not actually find me debonair…)  So today I’m going to sneak a little happiness in on you using pop culture: M*A*S*H to be specific.

Back to Major Charles Emerson Winchester III; as much of a buffoon as he was, the writers also gave him some of the most interesting lines.  I’m thinking of two in particular.  During one of his character’s early episodes, by way of explaining himself to the other doctors, he says, “I do one thing at a time, I do it very well, then I move on.”  That’s a great line isn’t it?  “I do one thing at a time…” sounds like someone who is present.  Someone who is focused on what he’s doing right then and there.  So far, so good.  “I do it very well…”  Hmmm, a little ego coming in here;  not so much about being present as it is being recognized by others for his accomplishments.  “Then I move on.”  OK, so now we see that he’s not really present at all.  He’s thinking about the next thing, but before he goes to it he expects your accolades for whatever he has just finished.  I’ll come back to this quote in a moment.

The other line I remember comes from an episode in which a soldier arrives badly hurt and Dr. Winchester, using those superior skills he constantly talks about, saves the man’s leg.  The Doc is very proud of this:  “Thanks to me,” he says, “when this boy goes home he’ll walk off the plane.”  You can imagine the good Doctor’s surprise then, when he lets  the soldier know just how great a job he did on the leg and the patient instead asks why his hand is in a sling.  Winchester explains that there was some minor trauma and there will be some permanent loss of dexterity… but the leg!  “I’ve saved your leg!”  “I don’t care about my leg!” the young man cries out.   “I’m a concert pianist!  My hands are my world.”  Dr. Winchester, a discerning patron of the arts himself, is crushed by this news and decides to help the soldier adjust.

To make a short story very long:  Winchester ends up showing the erstwhile pianist some pieces written specifically for the one-handed musician.  “What are you suggesting?” he asks,  “that I spend the rest of life touring and putting on concerts as some type of freak?”  Winchester tries to explain to the soldier that his gift is not located in his hands; it is located in his heart… and his soul.  Then he goes on to say:  “I’m a surgeon.  With these hands I can make a scalpel sing.  But all of my life, what I really wanted to be, was a concert pianist.  I took all the lessons.  I put in all the hours.”  (Here’s the big quote I promised two paragraphs ago)  “I can play the notes, but I cannot make music.”  Think about that:  I can play the notes, but I cannot make music.  Let’s go back for a moment to his first quote: “I do one thing at a time.  I do it very well.  Then I move on.”  Sounds an awful lot like someone practicing the notes, doesn’t it?  But to make music, as Dr. Winchester learned much too late in life, requires more than playing notes.  It takes a certain letting go of ego and analysis and judgment.  It comes from the perfection found in being completely and absolutely:  present.

This applies to a lot more than playing the piano.  What about when you’re talking to a client or doing that report or exercising in the morning?  How about when you spend time with your family, your children?  Every single day you can experience the pleasure – the joy, really – of living in perfection.  Not the perfection of flawlessly playing the notes (that’s not even physically possible), but rather the perfection of making your own music.  Be present today, be perfect… and enjoy the music.

Filed under: LIFE THAT POPs , M*A*S*H, Success

The Problem With Agents: They’re Not Selfish Enough

I talk to a lot of real estate agents and if there is one universal problem I see, it’s this: you are not selfish enough – not nearly selfish enough.  I’ll explain that in a minute.  First, let me ask:  how many reading this took auto-shop in high school?  I’m guessing maybe half.  Of those that took auto-shop, how many actually work on their own cars?  Right.  You don’t take it so you can grow up and work on your car.  You take it so when your car breaks down you have a clue what might be wrong with it.  You want to know if the repair shop is taking care of you or just taking you for a ride.  The importance of wide-ranging knowledge is even greater for agents.  The real estate business is a difficult one in the best of times and it’s always time consuming.  It encompasses so many different areas, you may not need auto-shop (although I recommend it),  but you do need Mortgage-shop, Title-shop, Escrow-shop, Sign-shop, Web Site-shop, Appraisal-shop, Home Inspection-shop, Staging-shop and on and on.  Obviously you can’t be an expert in all these areas, but just like auto class, you should know enough to make sure you – and your clients – are being taken care of rather than just taken for a ride.  Beyond that the most important thing you can do is surround yourself with a team that excels in these areas.  Herein lies the problem for which I titled this post:  real estate agents are not nearly selfish enough… with their time.

I’m going to share one perspective on how big an impact this can have on your bottom line.  Last Wednesday I was involved with three different events affecting over $1.7 million of real estate transactions.  For the math challenged, that’s $51,000 in real estate commissions.  I’m writing this from a lender perspective because that’s what I am, but it’s all about the agents.

• Early on Wednesday we funded a VA purchase loan for a little over $700,000.   Not remarkable in and of itself;  what stands out is that this borrower and his loan had already been declined… twice.  Fortunately, the agent knew enough about VA loans to know this one was doable.  No different than auto-shop:  you don’t have to know how to fund a VA loan, you just have to know if it’s fundable.  This agent did, so he went looking for a VA expert and found Brian Brady and myself.   His client now owns their dream home and he’s cashing a $21,000 commission check – all because he knew enough to go find the right team.  Do you think his client was pleased?  “I have more business for you” pleased?  How about “I can’t wait to refer my friend to you” pleased?
• Later that same day we went to an appointment with a top producing agent.  She had a purchase client who was about to pull $100,000 from a qualified account and pay over $10,000 in penalties because that’s what the client’s lender told her to do.  This agent knew enough to know that didn’t sound right and she called us.  Again, no different than auto-shop:  you don’t have to know how to fund a loan from a financial planning stand point, you just have to know that such a thing exists.  How excited do you think the client was when this agent  called and said “her team” was going to save the client close to $10,000 in penalties?  “I’ll give you more business” excited?  “Here’s a referral” excited?
• As it turned out, we were late for the meeting I just mentioned.  We were late because early Wednesday afternoon the mortgage back securities (MBS) market reversed itself.  For the past few days we had been floating all of our clients and they were enjoying better rates and fees because of it.  But things changed rather suddenly on Wednesday.  Since Brian and I are both a couple of old traders, we watch the MBS market…  and enjoy it (insert “get a life” joke here).  There is often less that a 45 minute window between the MBS market reversing and the lenders freezing their lock desks for repricing.  We jumped on the phones, locked the loans and called the agents.  We saved those clients close to $3000 each in extra closing costs.  (Or, worse yet, they may have been forced to take a higher rate, costing them tens of thousands over the life of the loan.)  Either way, how happy do you think the clients will feel when their agents called them and say:  “My team is looking out for you.  We just saved you a few thousand dollars in extra closing costs?”  Will they be “Here’s more business” happy?  “May I give you a referral” happy?

Because these three events occurred so close together, it hit me what was really happening.  These transactions were getting done, money was being saved and commissions were being earned because the agents knew enough to surround themselves with people who added to their business.  They were, in other words:  SELFISH with their time.   It reminded of a description I once read of Lance Armstrong.  The biographer had said that when it comes to people trying to enter Armstrong’s inner circle (”the world of Lance,” I believe he called it), there were  no gray areas.  Either Armstrong saw you as someone who contributed to his goals with little or no distraction, or he just plain didn’t see you.  His time was much too valuable to waste with someone who was not adding to the equation. Black and white.  Here’s the thing to remember:  Lance Armstrong’s time is not any more valuable then yours or mine, he’s just more aware of it’s value than most of us.

As I said, I wrote this from a lender’s perspective because that’s what I do.  But it’s true with your title rep, your escrow agent, your attorney, your home inspector, your home warranty rep, your stager, your assistant, your coordinator and everyone else in your circle.  You absolutely must be incredibly selfish with your time.  Take a look at all the people who make up your “team.”  I mean really evaluate them.  Make sure they are contributing to your business with little or no distraction.  Make sure you’re not actually spending more time on transactions due to all their “help.”  If you don’t know enough, take a loan class or an escrow class… or an auto class.  As I wrote last week:  time is the most important (if not only) product you stock on your shelf.   It is your most precious asset and it is absolutely non-renewable.

By choice or by inertia:  you surround yourself with professional relationships.  Make sure those relationships enhance your profession.

Filed under: LIFE THAT POPs, REALTORS , Success, VA