Since when is good not good enough?

In the old days it was good enough to be competent. People wanted quality, they wanted skill, they and they wanted experience. It was good enough to go to school, get a diploma and get a good job until you turn 65 and retire. Life was simple and easy.

If you were competent and qualified, you were guaranteed a place on the assembly line at the factory and you would make a very nice living.

However, the days of competency are gone.

The proliferation of the internet and social media has changed the way we see the world and competency is no longer good enough. We must not just communicate in the new economy, we must connect.

Consumers, business partners, investors, fans, clients, and customers are all bombarded with competency every day. There are millions of quality products, there are thousands of people with integrity to buy from. Honesty is no longer good enough. What our customers are looking for these days is connection.

Our customers not only want to buy from us, but they want to connect with us.

Social media has become a game-changer in the last 10 years where consumers can instantly connect with other consumers to exchange information about another person, product or service. Likewise, these same consumers are not only looking to purchase from their favourite brands, they expect to connect and interact with them online.

Communication has become a two way street where consumers are now able to communicate with their favourite brands and service providers and expect to get real time communication back. There is a global, online, real time conversation happening 24 hours a day, 7 days a week. The question is, what are your customers saying about you? And how are you connecting with them?

Your customers are expecting to connect, how are you able to connect to start a conversation?

In my own business, I have chosen the following 3 channels to connect and interact:

1. Facebook: One of the world's leading social media sites, I provide relevant, valuable and original content to my fans and customers regularly through this media channel. I also look to share anything they may find valuable that comes across my feed. My business growth has exploded through Facebook and I find it be an extremely valuable tool for connecting with customers and fans.
   
   
2. YouTube: Youtube is quickly becoming one of the most powerful search engines in the world. The younger online generation is bypassing Google all together and is searching only on Youtube. I am making video and youtube a priority in my business by video taping every deal I do and putting it online. Your youtube channel is your mini television network and your fans and customers are waiting to hear from you and give feedback.
   
   
3. Linked-In: Linked-in is the online “professional” community designed for professionals to connect. I have used linked-in mostly for a branding tool and a tool to collect endorsements and testimonials. The days of a paper resumé are gone and many potential partners or employers will google you and look at your linked-in instead. In my business I use linked-in less as a connection tool and more as an online resumé or track record. Your linked in profile is very powerful, even though it may or may not have the same traffic as Facebook or other popular social media platforms.
   
   

If you are not already harnessing these three ways to connect with your audience, you must do so immediately. The world is changing, the market is changing and we must connect to stay relevant in the new connection economy.

By: Stefan Aarnio
Freedomway.ca
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"Loyalty is the fabric that holds relationships together." - Stefan Aarnio

Loyalty is one of the rarest commodities to be found these days. In a world where everyone seems to have their own agenda, where can one find loyalty and how can we measure it?

I have always found it easy to do joint ventures with other business people and investors because I understand one key fundamental. To work together, two parties must share one common goal, or mission. If two people have the same mission, working together on a venture is simple. Loyalty happens when two parties can keep their missions aligned over time.

As my business grows, I have to bring on more and more team members. I have been burned in the past with bad team members, but have slowly built an outstanding team. Entrepreneurs and self employed business people are always apprehensive to add more team members because we want to have full control at all times. However, the larger we get, the more team members we must add.

How do I choose my team members?

I have always believed the mantra of the American billionaire Bill Bartmann "Hire slow and fire fast" and "hire for aptitude, fire for attitude":

1) Hire slow and fire fast: When considering bringing on a new team member, take your time and make the "courting" process long. Have the new team member jump through many hoops before offering them a position. I used to belong to an organization that thrived on having all potential employees work for free before becoming full time staff. The organization had stellar people working for it because the bar was set high. On the flip side, when the disease of negativity is spreading through your ranks - fire fast! As soon as you sense a team member becoming jaded, negative or poisoning the minds of your other team mates, then fire them as fast as possible. Negative energy and negative attitudes are a cancer that must be dealt with quickly if your business is going to survive.

2) HIre for aptitude, fire for attitude: When I am bringing new people onto my team, I do not care if they have paper "qualifications". I am more interested in their passion and personal ambition. I want to know if this team member finds their work exciting and enjoyable and if it fits into the larger vision in their life. Happy people are infectious and they attract success. In contrast, a poor attitude of a single team member can destroy an entire team. I was recently going to hire a realtor to sell a house I had just finished renovating; she had all of the qualifications and was recommended by one of my colleagues - she had the aptitude. However, her attitude was so negative that after listening to her talk for 5 minutes, I changed my mind and fired her on the spot. Attitude is everything, especially in selling and business, the right attitude can bring your organization to the stars and the wrong attitude will smash it on the rocks.

Recently, I have been looking for an apprentice to become my successor and take over the daily operations of my real estate business. There are many qualified individuals and many people who would like the have the position. With so many qualified prospects, decision making can be hard, how will I make a choice?

The #1 attribute that I am looking for in an operations manager is loyalty. Loyalty these days seems to be a forgotten virtue of ages past, but I can still find a few loyal people if I look hard enough.

But what does it mean to be loyal?

Loyal people stay faithful in their primary relationships, stay with their employer without "shopping around" for other jobs, and can manage to create relationships for life through exclusivity.

There are far too many business people who will chop of the heads and hands of their partners to get one step ahead. Unfortunately, the world does not need more of these people.

So how do you find the best and most loyal people for your team?

Divide the people you know into three categories:

1) The loyal and trusted - These people are proven, they are loyal and have the same mission as you - they have no reason to change course! When you have someone in this category, do everything you can to keep them happy and keep them on your team. Billion dollar businesses are built by assembling teams of these people. The loyal and the trusted are gold, especially in today's economy.

2) The "watch carefully list" - as soon as I see someone on my team show signs of disloyalty somewhere in their personal life or business, they go on the "watch carefully list". Does this mean I will not do business with these people? No. It just means that I must handle these people with extreme care and know that they will not  be around for the long term. They are short sighted and can't see the big picture. If these people get too greedy or ambitious, they may become traitors.

3) The blacklist - These people are proven traitors. When I am betrayed by a team member and trust is broken, I may forgive, but I will keep proven traitors on the blacklist and they will receive no further business from me. The quickest way to stop bleeding is to cauterize the wound and seal it with fire. As soon as I can sense betrayal, I will quickly move the offending team member to the blacklist from which they shall never return. "Fool me once, shame on you… fool me twice, shame on me".

The lessons I have learned about loyalty, traitors and relationships have been hard fought from the school of life. No business school in the world can teach you how to spot a traitor or how to deal with them. Business schools also cannot teach you about cherishing loyal partners for life. Sometimes the hardest lessons in life must be learned first hand, but once you have weeded out all of the bad apples, you will be left with nothing but the sweetest fruit on the tree.

Thanks for reading,
Stefan Aarnio
Freedomway.ca
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https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Get Stefan Aarnio's book "Money People Deal: The Fastest Way to Real Estate Wealth" at MoneyPeopleDeal.com!

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By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

Remember: Please share this article if you found it enjoyable!

Beauty is in the eye of the beholder, and so is value.

Everyday, we, the human race, wakes up and chases value until we drop dead from exhaustion at night.

It doesn't matter if you are Donald Trump sitting on a multi billion dollar real estate portfolio or monk in a temple. We are all chasing value.

The real question is, what is value and what is valuable?

Of course, value is highly subjective and can be very hard to determine.

I always find it interesting to see how excited people are to buy new clothes. Shopping malls are filled with rabid people who are frantically purchasing new garments to wear and 6 months later the clothes that they purchased will be donated to charity or thrown away.

The value of the clothes goes from "I will sacrifice my financial health to wear this" to absolutely "I will never wear this piece of garbage again".

The same thing happens with electronics. The day that apple releases a new iPhone or iPod, people are camping out overnight to get their hands on the new gadget and will pay a mortgage payment to own it. 6 months later, the same people are giving the old iPhone to their dog or are using it as a coaster on a coffee table because the newer, thinner model came out.

But what about investments? Real estate? Houses?

What is the true intrinsic value of a house?

Most middle class people will say "our house is our biggest asset"!

Most middle class people will have nearly all of their net-worth tied up in their home.

But what is the house actually worth? What is any house actually worth?

The truth is, all real estate is actually worth $0. Land and buildings are completely worthless.

If you would like to see the true value of land and buildings, drive to Detroit where you can buy a city block for $1 and nobody wants to buy it. People who live in detroit would rather have a $1 Taco at Taco Bell than own the liability of a city block.

Land, real estate, houses, and buildings only get value when there is a USE for it and an END USER. The end user places his or her subjective value on the Real Estate and that is where values come from.

There are more people who want to live in Manhattan than Detroit. That's why Manhattan real estate is worth so much more than Detroit.

At the end of the day, Real Estate is only worth what the end user is willing to pay. However, one metric I have been using more and more of lately is dollars per square foot.

When comparing two similar properties, dollars per square foot is one of the best ways to measure the current and future value of the property.

For example, in Winnipeg right now, many houses trade in the $200-$250 per square foot range. If you can make a purchase at $100 per square foot in an area that is trading at $200-$250, you have an opportunity for profit.

Construction in Winnipeg for a new build is approximately $200 per square foot, so if you can purchase for less than $200, you are getting the house cheaper than it would be to build. Likewise, if you pay $270 per square foot, you are paying more than it costs to build.

When analyzing retail single family homes, dollars per square foot is an excellent metric for intrinsic value of the property.

BUY ON INTRINSIC VALUE, SELL ON EMOTIONAL VALUE

One of the easiest ways to profit in any market is to:
1) Buy on intrinsic value and
2) Sell on emotional value

There is always profit in markets that have irrational buyers. Irrational buyers means that irrational amounts of money are floating around looking for irrational products.

For example, the neighborhood River Heights in Winnipeg is a desirable neighborhood where people will pay irrational amounts of money to get their kids into the local schools. In River heights properties trade for $200-$250 per square foot, prices that are well above cost to build.

However, in up and coming parts of town, there are "rational" buyers who will only pay prices that less than construction prices. These areas will trade at $150-200 dollars per square foot.

The key for profit is to buy with on an intrinsic value, pump the value and sell to an emotional, irrational buyer. The irrational buyer is unconcerned with what they are actually paying. They WANT the product and perceive that they NEED it. If you have a business, you want irrational buyers. Irrational buyers are consumers who allow you to create massive spreads in your products and grow your business.

Do what you can to attract irrational buyers. When you capture these buyers, take great care of them, and they will take great care of you.

Thanks for reading,
By: Stefan Aarnio
Freedomway.ca
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By: Stefan Aarnio
Freedomway.ca
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https://twitter.com/stefanaarnio
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In North America, the middle class is quickly becoming an endangered species.

In many ways, opportunity for middle income jobs is disappearing quickly as the jobs migrate overseas to India, China, Brazil and other up and coming economies.

In both Canada and the USA, we are quickly becoming a third world country.

The best definition can find for a third world country is: A country where there is no middle class – only rich and poor.

There are many factors that threaten and endanger the middle class, some of which are:

1)   Unions and inflated labor prices in North America that keep the USA and Canada from competing on the world market

2)   North American consumer demand for the lowest possible prices of consumer goods aka: Wal-mart. North American consumers will not pay premiums for locally produced goods.

3)   The death of American manufacturing

4)   The Federal Reserve, Quantitative easing and inflated money supply

5)   Rising oil, food and real estate prices as a result of Quantitative easing.

6)   Rising minimum wage while middle income earners have stagnant earnings

7)   Technology that eliminates certain jobs every year, ie: Clerical jobs replaced by automation.

8)   Rising taxes and fiscally irresponsible governments

All of the above factors are a threat to the shrinking middle class and as the world becomes more global, many more middle-income jobs will disappear.

Why hire an assistant in Winnipeg for $12-$15 per hour when you can hire a virtual assistant who speaks perfect English with better education in the Philippines for $1.50-$4 per hour?

An MBA graduate in the USA costs a company $300,000 a year while the same MBA graduate from India costs $30,000 a year.

The world is changing rapidly and, for many, it is time to make a decision between joining the ranks of the rich or poor.

Eventually, there will be no middle ground in the North American economy. If a person wants to keep living a middle class lifestyle, he or she may have to move to Brazil.

If given the choice between living rich or poor, everyone always says they would choose to be rich. However, when you survey the actions of the average person, it is quickly evident that most people choose  a life of poverty over a life of wealth.

The top 5 reasons why “Poverty Sucks” and why you need to be Rich in the next 10 years.

1)   You don’t get what you want in life: People who choose a poverty mindset over a wealth mindset ask themselves “what is the cheapest thing I can afford?” For these people, life is controlled and dictated by prices – not value. When you go to a restaurant for dinner, do you order the cheapest thing on the menu? Or do you order what you actually want to eat?

2)   Lack of Freedom: When you have a poverty mindset, other people make critical decisions for you. Most people are 100% controlled by their government and their employer. If you want the freedom to make your own decisions, it may be time to build a wealth mindset. Every great experience in life has a price of admission, if you want the experience, you have to pay for it. America’s jails are filled with people who have absolutely no freedom. Most American prisoners made less than $10,000 per year before entering the prison system. When you are impoverished, you are stuck in survival mode and cannot get into “creation mode” where you can freely create wealth and the life you want.

3)   Lack of confidence and health: Lack of funds creates stress. Everything in life is difficult if you cannot pay the price of admission. Stress is a major threat to health and wealth. Lack of funds also creates a lack of confidence, which can be a vicious cycle. No funds equals no confidence and no confidence equals no funds. If you are in this cycle, break it immediately.

4)   Broken Homes: The #1 cause of broken homes and divorce is financial stress. Financial infidelity aka: hiding bank accounts, secret spending and secret credit cards ruins trust and relationships. Divorced families are much more likely to be faced with poverty and financial problems.

5)   Debt: Nearly 50% of the families in the USA are 1 paycheque away from bankruptcy. We live in a paycheque to paycheque society where overspending and money mis-management makes debt a necessity for survival. Today with credit cards, it’s easier than ever to get into debt. Although debt is a convenient way to take care of immediate problems, it is a double-edged sword. Debt will let you do the things you want today while robbing you of the things you want in the future.

All of the above reasons can create cycles of poverty that are very difficult to break.

Unfortunately, in the future, there will only be rich and poor in North America unless some major changes are made. I have heard many experts say that next 10 years will be the biggest wealth transfer in history and best time in history to become very rich... or very poor.

The USA is in a recession that may turn into a depression and this means that businesses, real estate and other assets will be on sale. There will be more opportunity than ever to become wealthy.

The best part of living in a free country like the USA or Canada is that each of us has the ability to choose between becoming Rich or Poor.

Thanks for reading,

Stefan Aarnio

Freedomway.ca
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https://twitter.com/stefanaarnio
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By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
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Retirement for many North Americans is a dream that many people wish to have. The first wave of baby boomers is starting to retire in the next few years, however, many of them are not prepared to stop working.

The definition of retirement is “to take out of useful service” and what happens to so many hard working people is that they die shortly after being “taken out of useful service”.

Working at a job is a a social pursuit that can add purpose and meaning to a person’s life and so many people highly value the social aspect of working.

If a person decides to retire and loses the social environment that they have been in for the last 10, 20 or 30 years, they can suffer a serious blow to their happiness and life can become very difficult.

If you look at human history, there are virtually no examples of societies that have a “retirement” with golf courses, meal plans and retirement homes.

Life spans have been short throughout history and people generally worked until they died. In some cultures, the elderly would live with their children and help out around the home, but they still did a considerable amount of domestic chores and kept “working” without retirement.

Many baby boomers have the vision of retiring on a golf course like their parents did and sadly, I don’t think this will be a reality for most of them. My opinion of the “golf course” retirement is that it has been an anomaly that only one generation in human history has been able to enjoy.

Unfortunately, the “golf course” retirement has been artificially created by the WWII generation before the baby boomers.

The WWII generation financed their “retirement” on debt and fiat currency. Like most debts, they have been able to pass the bag onto their children (the boomers).

Historically speaking, the “golf course” retirement was created early in the industrial age and it was mathematically engineered by highly skill actuaries. They calculated that for every year a person worked after age 55, the worker’s lifespan decreased by a proportionate amount of years.

“67” is the magic year because it the shortest amount of retirement that the company would have to pay. Age 67 is the year that the average worker would statistically die after working until age 65.

What this means was that many retirement plans were designed around a worker working from age 18 to 65 with a 2-year retirement followed by a quick death at 67.

“Retirement” plans were never designed to support people and their families into their 80’s, 90’s and 100’s. These retirements span 20, 30, 40 or even 50 years and they were fundamentally designed to support 2 years.

Most companies with defined benefit plans were betting on their employees dying 2 years after 65. Statistically today in North America, both men and women live to be nearly 80 years of age and the number is climbing as healthcare improves.

I saw a statistic the other day that said that between Obamacare, social security and medicare, the United States has 80 Trillion dollars of unfunded liabilities. The amazing thing is, 80 Trillion dollars is more money than the entire world’s money supply.

No one can pay this liability, not even the USA with it’s unprecedented money printing abilities.

The USA could print their way out of the problem, but would completely devalue their currency into oblivion in the process.

Many of the pension funds, retirement funds and mutual funds that the Boomers are relying on for retirement are all invested in the paper assets that are extremely vulnerable to market fluctuations.

Furthermore, these assets are all timed to liquidate at the same time. The baby boomers are the largest demographic in North America and in other parts of the world as well. These people will be selling their large family homes at the same time (in specific suburban sub-markets), liquidating their stock portfolios and will begin systematically withdrawing from the markets in 2016.

What happens when everyone reaches his hand into the cookie jar? Although there should be, there are not enough cookies in the jar for everyone and some of us won’t get a cookie. The stock market works like this and when everyone wants to sell, values deflate and many people will not get their full (inflated) value on their assets.

When the baby boomer garage-sale begins, who will be in line to absorb these large suburban family homes, stock portfolios and other assets?

My prediction is that the younger generations, namely the echo boomers, will not have the purchasing power to absorb their parents’ assets. There has been a large shift in the middle class and the entire middle class workforce has migrated from North America to Asia.

As well, the purchasing power of the echo boomers has been damaged by long term no-value university programs and many do not enter the work force until mid twenties or later.



Furthermore, many echo boomers are loaded down with student debt racking up into the hundreds of thousands.

It is common for students nowadays to leave school with a houseless “mortgage of student debt”.

What is most unfortunate is that these students cannot go bankrupt to get out of their debt obligation.

I don’t have a crystal ball to predict how these demographics, fundamentals and laws will pan out, but there will be chaos and chaos brings opportunity.


If you are a savvy investor, you will be able to find some serious bargains on assets in both Canada and the USA.

However, if you are on the other side of the equation and expecting to retire in the next few years, you may need a back up plan to hedge against your current investment portfolio.

I don’t want to preach doom and gloom; I prefer to be optimistic about the future. However, we are set up for a perfect storm in the next few years and I truly believe that we will see a major transfer of wealth.

It’s up to you to get educated on the things I have written about in this article and do your best to prepare for the perfect storm… Otherwise, it may be better to die at 67.

Thanks for reading,

Stefan Aarnio

Freedomway.ca
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
http://ca.linkedin.com/in/stefanaarnio

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By Stefan Aarnio
Freedomway.ca

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Yesterday I had the pleasure of giving a talk to a group of 50 local real estate investors in Winnipeg. The subject of the talk was "how to raise capital and take the limits off of your real estate investing career."

In business, raising capital is the #1 skill any real estate investor or entrepreneur needs to be in business. So many entrepreneurs fail because they can’t get funding for their businesses initially or they can’t expand to a profitable level.

While I was giving the talk to the 50 investors in the room, I was shocked by the following:

• 0 people claimed that “Sales and Marketing” was their #1 skill
• 0 people had raised capital for a “no money down” joint venture (1 person may have raised his/her hand, but wasn’t confident so I wasn’t sure)

• 0 people had a “Capital Raising” binder/presentation ready to show to investors

Many of the investors in the room have purchased at least one or more investment properties in the past few years, but were still using their own cash and credit.

Statistically, most seminars have a 2% success rate. In any given room of 100 people , 2 people will apply the knowledge they are learning and 98 will fail to apply anything.

Statistically speaking, out of the 50 people I was speaking to, 1 will apply the knowledge shared, 49 will not.

Yesterday, there were many real estate investors in the room who wanted to take their businesses to the next level. I think most of the audience in the room saw value in learning how to raise capital. Most investors want to use“other people’s money” to purchase investment properties, but many do not know how to do it.

Although, what I was teaching was the "missing piece of the puzzle" for many of the people in the audience:

• 0 people approached me after the event for any for of help or advice.

Perhaps I gave a bad talk.

Perhaps not.

I did receive numerous compliments on the content and delivery of the speech and I think the audience enjoyed the presentation for both entertainment and content.

More often then not, when I attend a seminar, talk or presentation, I approach the speaker after the event to

1. Thank them for speaking and
2. inquire about how I can learn what they had to offer (whether I can afford it or not)

My primary objective with attending a seminar, talk or presentation is to learn something and find a way to bring change into my life.

Why don’t we change?

Why don’t we take action? 

Why don’t we pursue freedom at all costs?

The answer is simple.

A wise man once said “everything we want is on the other side of fear.”

Some call this invisible wall of fear the “terror-barrier”. 

The Terror-Barrier is the only thing that keeps us from having what we want in life.

In my life, the terror barrier has held me back many times, and the only way I could break through it was by getting myself in a “no options” situation.

For change to occur, the pain of staying the same has to be greater than the pain of making a change.

People are mysterious creatures and I find that we are all motivated more by pain than by pleasure.

The average person will go to great lengths to avoid pain but will do very little to achieve joy or pleasure.

There are two decision making centers in the body:

1)   The head (The brain)

2)   The body (made up of the gut and the heart)

All thoughts pass through the head, but all actions are made through the body.

There are 4 phases of change and only in phase 4 do we achieve freedom.

Phase 1)

In phase 1, we have an “old idea” in our head, and our body (who controls the actions) performs the “old actions”.

An example of this would be a person who says: “I’m a smoker” and as a result; he or she smokes regularly.

Phase 2)

In phase 2, we get a “new idea” in our head, but our “old idea” co-exists with the "new idea". The body, who controls our actions, still acts on the “old idea”.

An example of this would be a person who says “I’m a smoker, but I’d like to quit” and as a result; they smoke regularly and show no actions that indicate quitting.

Phase 3)

We get a “new idea” in our head, and our “old idea” co-exist. The body who controls the actions acts on both the “new idea and the “old idea”.

An example of this person who says “I’m a smoker, I’d like to quit” and as a result; this person will smoke sometimes and quit sometimes.

Phase 4 is where freedom and change happen. However, few people achieve phase 4 of change because they are held back by the Terror-barrier.

The terror-barrier is a fancy way of saying “irrational fear” and the cure for fear is a disciplined, rational approach or "the luxury of no options".

However, I know first hand how hard it is to break through the barrier and in my own life, I have most often penetrated the Terror-barrier against my will.

The Terror-barrier is so strong for most people that they will never change unless they experience a divorce, job loss, large financial loss, bankruptcy, cancer, death or deadly illness.

These catastrophic life experiences push you through the terror barrier because most often “the worst” has already happened.

Once we have experienced "the worst", we become free of fear. We suddenly play the game with nothing to lose.

Usually people in these very uncomfortable situations have “the luxury of no options” and become very successful after failing. 

Phase 4)

In Phase 4, we achieve freedom. We have a “New idea” in our head and the body, who controls our actions, acts on the “new idea” only.

An example of this would be a person who says “I’m quitting smoking” and as a result, they quit.

Change is never easy, but it’s a necessary process in life. 

Einstein used to say “change is the only constant in the universe”. 

Learning how to adapt and change ourselves according to the fluctuating conditions of life is the new primary skill set in this modern world. 

This skill set is especially valuable in the new economy that we live in today.

In the past, a man or woman could count on having a career from college to retirement. Today, young people change career paths every 4 years or less.

The future does not belong to the fastest, strongest, best looking or smartest. It belongs to those who can change the fastest and re-adapt to surroundings as external change occurs.

In the information age, we experience accelerated change at an unprecedented rate and learning to change will be #1 skill set in the very near future.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

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By Stefan Aarnio
Freedomway.ca

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Entrepreneurship has never been easy...

 Every entrepreneur has to manage hundreds of variables from inner problems such as fear, vision, doubt, and passion to external problems such as the economy, markets, suppliers, employees, banks, customers and competition.

There is often a paralyzing amount of information every day that the modern entrepreneur needs to sift through just to compete and stay alive.

Succeeding at an endeavour like entrepreneurship can seem impossible when we consider the variables and look at the well-known published statistics:

90% of new businesses fail in the first 5 years of operation. Of the businesses that survive, 90% of the survivors fail in the second 5 years.

If we only look at the statistics, success in entrepreneurship looks absolutely bleak. 

With such low chances of success, why would anyone want to become an entrepreneur?

"Lies, damned lies, and statistics" is a phrase popularized by Mark Twain. 

Statistics can always "lie" and be manipulated to paint a skewed picture of the way things really are.

Although the statistics look bleak, Entrepreneurship is truthfully a simple numbers game. If we can follow a simple formula, then success if extremely likely and maybe even guaranteed.

If you look at the numbers for any business, industry or sales cycle, patterns can found in the numbers. Through the numbers, we can find the path to success.

For example when I was in sales, I knew that I had to make 50 calls to have 10 conversations. From these conversations, I would book 2 meetings. If I booked 10 meetings, I would close 4 customers and earn a predictable amount of profit.

If I wanted to earn a consistent income, I had to make 50 calls a day. My actions determined my results. There was no luck in this game.

Most people, when they enter "the sales world" think that "luck" is a factor. They think that there are "good days" and "bad days" when in fact, every day is the same. The question is, "did you execute your daily repeatable actions to create success over time?" 

There is no luck in this world but the luck we make for ourselves.

A wise man once said "the harder I work, the luckier I get".

The same laws of "actions repeatable over time" apply to entrepreneurship as they do to music, sports, chess or any other real world activity.

THE POWER OF 10.

10 is a very powerful number in entrepreneurship.

Since 9/10 businesses fail, an entrepreneur must create 10 businesses to guarantee success. It's simple mathematics.

Business cycles run in 10 year increments. To see real profits in any business or buy-and-hold real estate, you must commit yourself to a period of a minimum 10 years.

Years ago, I used to study the world's most famous and successful rock bands. I was always intrigued by their start-up phase and how the bands became successful. For most bands, it takes at least 10 years of operations to become nationally recognized and reach commercial success. 

However, most bands quit after 1-2 years of grinding in the bar circuit.

The most successful athletes are the ones who put 10 years of time into their sports before their competition can catch up. Think of Wayne Gretzky hitting the ice at age 3 or Michael Jordan shooting more free throws than anyone else.

10 years is a standard business cycle and there is no variation to this principal.

Israel Asper, a very successful entrepreneur had a rule. The rule was; if he wasn't successful in a venture at the 10 year mark, then he would re-evaluate his position. In his life, Israel was successful at Media, Politics, Law and many other endeavours. With each endeavour, he committed a minimum of 10 years to his path and he was successful every time.

Most people quit after 1-2 years of no success, but they are too early in the cycle to even dream of being successful.

You can only reap what you sow. If you plant a seed in the ground and expect to have delicious fruit in 2 years, you may have to wait. It takes much longer than 2 years for any endeavour to bear delicious fruit.

To go with the theme of 10 years until success, Malcolm Gladwell, a man who has studied success across many fields has a rule: The 10,000 hour rule.

To quote Malcolm, "it takes 10,000 hours to become a phenom. To be so freakishly awesome, to be such a standout among your peers, that sometimes your first name is enough to tell people who you are: Peyton. Tiger. Venus. Kobe. Oprah."

10,000 hours and 10 years seem to line up perfectly, because  10 years is the amount of time it takes for most people to put in 10,000 hours.

“To become a chess grandmaster also seems to take about ten years. (Only the legendary Bobby Fisher got to that elite level in less than that amount of time: it took him nine years.) And what’s ten years? Well, it’s roughly how long it takes to put in ten thousand hours of hard practice. Ten thousand hours is the magic number of greatness.”

In my own personal cycle, I have only been doing real estate for 3 years and have already achieved a measurable level of success. I know that if I want to achieve substantial or "phenomenal" success, I have at least 7 more years to commit to Real Estate.

However, as an entrepreneur, I have always had a side business running and when I measure the time and hours I have invested as an entrepreneur, I am likely further ahead of other "3 year real estate entrepreneurs" in my 10 year development cycle.

The combination of being 3 years into my Real Estate cycle and perhaps 5-6 in my entrepreneurship cycle may explain why my Real Estate success has come faster and easier than past endeavours. 

I can speculate that my past knowledge has compounded  and I have learned from my mistakes in my past businesses mainly in Music, T-shirts and debt-buying.

If we are to measure my success by the "power of 10", I am on my 4th year in my real estate business and have 7 more years to commit to my cycle before I have matured as a real estate entrepreneur.

When you get a chance, analyze your own business experience and try to find your position in the 10 year business cycle. Examine the "power of 10" rule and figure out  where past experiences have fed your current experiences and how many more years you have before you reach the 10 year mark.

Measuring myself by these metrics has been extremely valuable for understanding where I am at today - and where I am going. 

I can gain perspective on my position when I apply the "power of 10 rule", I can see how much longer it will take to achieve guaranteed success in entrepreneurship.

In my mind, there is no such thing as failure. Failure only happens when you give up.

Thanks for reading,
Stefan Aarnio
freedomway.ca

P.S. Please share this article if you found it helpful!

Stefan Aarnio
Freedomway.ca

Remember: Please share this article if you found it educational!

There is a moment in my life I will never forget...

I was watching 50 Cent, the famous rapper, on an interview on TV. He was wearing a suit and dressed like a businessman - not a rapper or a drug dealer (contrary to his brand). The interviewer was marvelling at 50's business acumen and his successes outside of music. There are two parts of the interview that will stay with me forever:

1. 50 Cent made a huge profit selling "Vitamin Water". From what I understood in the interview, he was a Venture Capitalist on the deal and sold the company for around $300 Million dollars to Coca Cola. 50-cent chose Vitamin water because it had the same mark-up as crack cocaine (his first business as a child)
2. When the interviewer asked about the economic recession, 50 cent replied "recession? what recession? Where I come from, there is always a recession... The recession is a middle class problem, not one for the rich or the poor."

When 50 cent said those words, they had a striking effect on me that changed the way I thought about business.

I had always known that there were only two places you wanted to be in the market if you want to be successful and sustainable.

1. Be at the top, the luxury level, have the highest margins. OR
2. Be at the bottom, have the lowest price and win on volume.

Any market is an assortment of prices, values and products. What I look for as an entrepreneur is MARKET PRESSURE.

I want to know where the pressure points are in the market.

For example, I live in Winnipeg right now and we have a shortage of rental units. This shortage is caused by the government who has put such strict regulations on land lords that developers and investors have taken their money elsewhere. Consequently, we have 500 vacant rental units in the whole city with a population between 750,000 and 800,000 people. The average household income is slightly lower than other cities and the purchasing power is usually around $30,000-$50,000 for most renters.

This means that if you have a rental unit under $1,000, you will have a line up of people applying to rent it because there is far too many people at bottom of the market. These people have no purchasing power and are fighting to get in. There are limited options at the bottom and it's EASY to make a sale.

This same principal is why slum lords make so much money. Slum lords set their rents so low that there is always a line of renters and they never repair anything because they know they will always have customers. Their customers are on social assistance or another form of welfare and the revenue comes directly from the government, who is the most stable customer around. This is what it is like to be at the bottom of the market, there is NO SUCH THING AS A RECESSION. Slum lords are at one of the most stable pressure points in the market because they are the bottom. The bottom always has lots of customers because many customers are cheap and just want the basic, bare minimum product. Other examples of recession proof "bottom market" businesses are McDonalds and Wal-Mart. Many customers only go to those two establishments because of the price.

In contrast to the bottom of the market, is the top of the market. The top of the market is often called "luxury" and reserved for those who can pay. Donald Trump, when he built Trump Tower decades ago, chose to build the most luxurious amazing apartments in Manhattan. These units were so stunning that the most wealthy luxury clients in the world would compete just to live in the iconic Trump Tower. In Real Estate, Donald Trump caters to the global elite who do not care what they pay for goods and services as long as they have the best in the world. For Entrepreneurs who sell to the top of the market, money is not an issue for their customers because luxury clients will pay any price just to be the best.

When I used to work at an internet company that sold Luxury Hotel rooms in 2008, we would always have middle class tire-kickers phoning in "trying to get a bargain because there was a recession". I had to remind these people daily that "in luxury products, there is never a recession and that luxury products only ever offer modest discounts (if at all). Customers will pay full price because they want the best. When you are at the top in the market THERE IS NO RECESSION. Luxury clients will always pay premiums to have the best, money is not an issue for these people, as long as the product is the best.

But between the TOP of the market and the BOTTOM of the market is "no man's land"... also known as the MIDDLE.

I absolutely hate being in the middle of the market because this is where recessions destroy businesses and entrepreneurs.

Consumers at the middle of the market are usually middle class people, who have jobs, bills to pay, credit card debts, car loans, mortgages, piano lessons, hockey for the kids, ballet, once a year vacation, savings for retirement, rainy day funds and still like to eat lunch at a restaurant 3-5 times a week.

These people are usually loaded down with so much debt and liability that they are walking a tight rope. If they make a mistake in their budget or lose $100 to an emergency, they suddenly have to cancel their trip to mexico...

If you are the mexican hoping to sell the vacation your middle class friend, you are out of luck and have just lost a price sensitive customer who can no longer afford your product.

The middle market people are extremely price sensitive, every single sway in the economy shakes them and they drop like flies when things get really bad. 

What's worse about selling to them is that they have enough purchasing power to be choosey, but not enough to be luxury. It's hard to determine what they want and they are mobile enough to be fickle with you as a customer.

There is lots of loyalty at the top, as long as you are the best.

There is lots of loyalty at the bottom, as long as you are the cheapest.

There is NO loyalty in "no man's land" and it is a savage place to be.

Whenever I look at a business, design one or analyze one, I always want it to be at the TOP or the BOTTOM of the market. The middle is the scariest place to be.

Recessions can wipe out the middle in a heartbeat, especially since the middle class are an endangered species. If your customers are wiped out, so are you.

It's my policy to avoid marketing to the middle, because that is where all the problems are for two reasons:

1. They are price sensitive enough to be fickle with the bottom
2. Do not have the purchasing power to have luxury at the top

They float between the top and the bottom and land wherever they feel like.

The top of the bottom operates on the emotion of WANT... The bottom of the market operates on the emotion of NEED...

I always want my customer to either NEED or WANT me. In the middle, your clients neither NEED or WANT you and this is a huge threat to your business.

In my mind, there is no such thing as a recession because I always focus on the top or the bottom of the market and let other people take the risk of the middle.

Although I may look like a "risk taking" entrepreneur, I am actually extremely risk adverse and like to bet on "sure things". By focusing on the right pressure points in the market, and executing your businesses properly with attention to detail, there is no reason why your business cannot become recession proof.

Where do you usually choose to play in the market?

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share if you found this article educational!

By: Stefan Aarnio
Freedomway.ca

It always amazes me to see the thought patterns of novice and intermediate real estate investors. In Winnipeg (my home market) properties are relatively cheap compared to the rest of Canada. Properties are even considered "affordable" when compared to other markets in Canada. Winnipeg scores very well on the national affordability index.

But here's the downside of being so affordable...

Since properties are "affordable" in Winnipeg, many novice and intermediate real estate investors get lazy and actually use their own cash and lines of credit to buy properties. Eventually they will always run out of cash or credit and then they either stop growing or change their mindset. What I have seen happen in Winnipeg is that we have a good number of investors who have decent day jobs, between 1 and 10 doors (depending on the age of the investor) and their resources are usually tied up or close to maxed out.

To grow the real estate business further, it's time to think outside the box.

I started out in real estate investing at the age of 23 and had NO CASH from day one. So if I wanted to play the game, I had to operate with NO CASH. Every dollar that comes into my business is re-invested... but not into properties, because I play the game of NO CASH.

So where does my money go when I earn it? What do I buy instead of saving up for down payments? How do I operate a real estate business with NO CASH?

There are two things that I think every entrepreneur/real estate investor should be purchasing with their hard earned dollars - and it is not more property!

If you want to grow your business at an exponential and geometric rate you must buy two things: Time and Talent.

There is a term in investing and business called Velocity. Velocity is the speed at which money moves. When I started out in Real Estate investing, I was focused on doing 1-2 deals a year. I was a very low velocity investor and I actually tried to use my own cash and credit (which didn't take me far because I had virtually none).

At the time of writing, I am considered an intermediate investor (classified by one transaction a month) and I'm heading towards advanced investor (classified by 100's of transactions a year). The velocity of novice investors, intermediate investors, and advanced investors varies greatly and is the key to moving forward in your career. 

What separates the "men from the boys" when considering intermediate vs. advanced investors? In a general sense, there are only two things differentiating the two: time and talent.

In the past, my mentality would be to use my resources to save up or raise funds for a slow buy and hold. Today my mentality is to use my resources to create lead generation, websites, brands, videos, blogs, articles, photos, seminars, billboards, employees, teams of bird dogs, databases, referral programs, books, social media campaigns to build a web of influence. This web grabs large amounts of leads and maximizes the dollars generated per lead.

All of these bells and whistles attract properties, money partners and strategic partners to me. I have access to the best opportunities and have exponentially increased my chances of success.

To create and maintain this web of influence, I need time and talent. There is no way that I can build all of these things with my limited technical knowledge and finite time.

I buy time by outsourcing a lot of my tasks. Digital tasks are outsourced on eLance.com or crowdSpring.com. Purchase time in depressed economies where you can get time and talent for pennies on the dollar. Physical tasks are outsourced to local contractors or delegated to strategic partners who take a share of the profits.

I buy talent in the same way. I make sure to attract the best talent to my teams, pay people what they ask or more, invest in bonus and reward structures and keep my machine well oiled. Coaches and mentors are new addition to my payroll this year. Free advice is too expensive for me now. You only get ahead in this business by paying and you get to choose between blood, sweat, tears, time and money. You can pay in any way you like and I've already paid in blood, sweat and tears... 

Paid coaches are extremely expensive, but the knowledge and foresight I get from spending time with people who have reached the "advanced" level of investing is ABSOLUTELY PRICELESS. I often see investors scoff at the prices that some coaches and mentors charge, but I think that it is worth every penny. Why re-invent the wheel? Just hire someone onto your team who knows how to build the wheel - it's really simple. I know that I cannot do everything myself and must purchase Time and Talent to reach my goal of "advanced investor".

My goal is to do 100 transactions in 12 months, realistically starting in January 2013 and ending January 2014. It won't be easy, but with the right thinking, systems and coaches, I don't think it will be too hard either. The biggest challenge will be to think differently than I have in the past, because I have already achieved a degree of success, but not the level that I want. I can guarantee that I will not be painting suites or driving around looking at properties every day if I am going to achieve my goal, that is far too inefficient with my time and resources. Instead, I will be purchasing massive amounts of time and talent to execute my strategic plans.

Before we finish reading, ask yourself: Are you purchasing time and talent in your business? If you are, are you purchasing enough? What are you missing? Who are you missing? Who do you have to hire to get you to the next level? How do you need to change your thinking? Please share your thoughts in the comments below.

Thanks for reading,
Stefan Aarnio
freedomway.ca

P.S. Share this article if you found it helpful!

By Stefan Aarnio
Freedomway.ca

Every single person who ever goes into business "for themselves" has felt the feeling of not earning what he or she is worth. Often this feeling is what employees feel at their jobs every day. This feeling is often strongest when good employees open their paycheque to see relatively meagre earnings every 15 days.

When these same people get fed up with their wimpy paycheque, they quit their jobs, become self employed and charge higher rates per hour (the rates that their employer was billing out to clients) to earn more money. However, the next part of the cycle is one of two things:

1) They either run out of time and hit their new earnings ceiling with escalated risk of being self-employed. 

-OR-

2) They begin to lose clients because they raised their prices and earn the same amount as they did in their job but work less hours.

I know this, because I have been in both scenarios and know the crushing feeling of not living up to my potential. So many  Real Estate investors, Self employed small business owners and all business people get the feeling of not earning our potential.

JT Foxx is one of my teachers and mentors and he has identified the "8 reasons you are not worth what you should be worth at this point":

1)   Time management – so many people who become self employed think that they have earned a holiday - every day. They are still in the "time is money" mentality and trade time for money on a 1:1 ratio. Time management is something that really separates the top earners from the bottom earners. Most people waste huge amounts of time because they are programmed to work on the clock. Time needs to be budgeted and leveraged the same way that money is to grow your business and earning potential exponentially.

2)   Fear - Fear of failure or success is a crippling disease. I have often been stopped in my tracks many times from fear of failure and even more frozen by fear of success in other cases. Fear of prices and fear of spending can often hold entrepreneurs and investors back from moving forward in their businesses. Warren Buffet says "Price is what you pay, value is what you get." Remember: It’s not how much things cost, it’s how much value that your purchase produces that matters.

3)   Procrastination- Top earners are action takers who implement everything at amazing speed. Procrastination ties in with time management, it comes from not having a specific blueprint or plans for success. Often a coach can remedy this and build a specific blueprint for you to remedy this common problem.

4)   Lack of Focus- This is something I personally struggle with. Often, effective entrepreneurs have a mild to severe case of A.D.D. and try to implement everything across the board. Richard Branson has been nicknamed "Dr. Yes" by his investment teams because he says "yes" to every opportunity and needs help with focus. Branson has actually hired specific investment analysts to shoot down his ideas and screen the bad ones. He is very happy to pay people to reject his ideas and maintain his focus. In the words of the wise: "do 1 thing 5000 times instead of trying to do 5000 things 1 time."

5)   Accountability- We are often very bad at identifying our own mistakes and punishing ourselves when we don't hold ourselves accountable. People who do not have coaches often have little to no accountability and this makes it easy for us to allow failure and abandonment of goals to occur. Accountability coaches are brilliant for "checking up" on us when we are about to give up. Hire a coach to check on your goals and ensure that you follow through with your intent.

6)   Lack of Funds- Every entrepreneur, business person and investor needs funds to "run the machine". Many times when we start out, we are WAY undercapitalized and as we grow, we need to raise cash. A common myth in business is that funds are hard to come by. However, in reality, it's talent and business acumen that are much more scarce than funds. If you can prove your skills, you will NEVER be without funding.

7)   “I can do it myself”- This is one of the worst sins a person can utter as a business owner or a self employed entrepreneur. "Doing it yourself" is extremely destructive because it keeps you from building the systems and teams required for a saleable business. People who do everything themselves do not have businesses, they have glorified J.O.B.'s and they ALWAYS BURN OUT. It's a fact. I've had the "DIY" disease for the past few years and am extremely liberated to ditch the dirty habit. "I can do it myself" is the battle cry of an ignoramus and a phrase for self enslavement.  It keeps you pinned as a self employed slave and prevents you from becoming the CEO of your own organization. Another common phrase by a chronic DIY'er is "I’ll do it after I’m successful." This is like saying "i'll purchase fire insurance after my house burns down". You have to build your business right from the beginning, otherwise, it becomes exponentially harder and more expensive to demolish it and rebuild it later. You will get trapped if you try to "DIY" it after getting the business running.

8)   "'I'm not sure what to do" - Most people, especially people who have been conditioned to be employees, have trouble figuring out what to do. We are programmed to take orders, not question authority and execute other people's orders like robots. Once you pull the plug on the J.O.B. and come into the real world, you suddenly have to think for yourself. The two things you can never pay an employee or contractor to do are:

1) Think and
2) Do things in the right order

In the land of the free, you are now the #1 thinker, you drive the ship and have to make the calls. Do not let your ship smash up on the rocks. Of course if you're not sure what to do, you will need to find a coach or a mentor to navigate you on your journey to freedom.

When you look at the 8 reasons why you are not earning what you are worth, the same list can be used to identify why people will not do business with you. Go over the list one more time, take an inventory of the reasons why you are not earning your maximum potential and focus on improving your weak categories. Remember: Where focus goes, energy flows and if you can eliminate your weaknesses and change your mindset then you'll eventually be earning what you are worth and you will be pleasantly surprised.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

P.S. Please share if you enjoyed this article!