By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
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!

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

The great Zig Ziglar said it best “Money isn’t everything, but it ranks up there with oxygen.”

We live in a world that is ruled by money. Almost everything we do on a daily basis is tied to money in some way. We live in homes that are purchased with money, we drive cars purchased by money, we wear clothes purchased by money and we eat food that is purchased by money. More money can mean a better life, more money can mean fewer problems. Typically when we are asked how much money we want, the answer deep inside of ourselves is always “more”.

Many people struggle and work hard each day to earn more money. The sad thing is, many of these people do not understand what money is. How can you earn more of something that you do not understand? How can you master something if you don’t know what you are trying to master? Sun Tzu the great military strategist said:

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

The translation of this famous quote from war to money would be: 1) If you know yourself, and understand money, you will never have to worry about money and will always have it. 2) If you know yourself, but do not understand money, you will suffer a loss for every gain you make with money. You will never get ahead. 3) If you do not know yourself and do not understand money, you will lose money whenever you encounter it and will be broke and constantly in debt.

Most people think that money is a from of exchange, or a currency, or a lubricant for life (why scrape through life when you can slide on by?) All of the above definitions are true, but the best definition for money that I have ever seen is:

“Money is an idea backed by confidence” -Ron Hubbard.

The man who works hard for money, works hard for another man’s idea that has become confidently supported by others. Companies become real when investors gain confidence and invest in them. The dreams of great visionaries like Apple by Steve Jobs or Disney by Walt Disney have become concrete once their visions and ideas gained the confidence of others.

Today, brands like apple and Disney have supreme confidence and are worth billions of dollars in stock and revenue. Apple has gained so much momentum it is now the most valuable company in history.

Money only has value, because enough people are confident in the idea of the money itself. In history, sea shells have been used as money, gold, silver, fur, salt, pepper, paper and digital numbers have all been money at one point in time. All of these systems are flawed and none of them have any real intrinsic value. The confidence that backs the ideas is much more important than the actual money itself.

Con men (short for confidence men), throughout history, have been successful at swindling fortunes by exploiting the human weaknesses of others through dishonesty, honesty, vanity, compassion, credulity, irresponsibility, naiveté or greed.

Con men present an idea, create confidence and once those two elements are in place, the victims fall prey to their weaknesses and will transfer their money to the con man who will promptly disappear with a fortune.

There is very little difference between an illegitimate Con Man and a real deal entrepreneur like Steve Jobs or Walt Disney in that they 1) create a clear idea and vision and 2) sell the idea with confidence.

The primary difference between a Con and a legitimate businessperson is that the Con has no real business, asset or investment, while the real businessperson has a tangible business asset or investment. Regardless of the validity of the scheme, the sales process for getting the money is the same.

But how does this affect you?

We all want more money, and since money is an idea backed by confidence, to create money, you must first create confidence. The amount of money you have will directly correlate to the amount of confidence you create.

Self confidence and trusting your decisions is the base of all wealth and is a pre-requisite for attracting money either through sales or through investor capital. Break a man’s confidence and you will also break his bank account. Raise his confidence and you can make him into a god.

Here are 12 Quick ways to raise your confidence:

1)   Get a makeover and create a professional appearance

2)   Keep a physically fit body

3)   Learn to speak well and have a wide vocabulary

4)   Keep well groomed

5)   Show up on time

6)   Have an assertive and firm hand shake

7)   Start small in your business and grow fast

8)   Take on projects that are easy to complete and slowly increase the complexity over time.

9)   Become the expert on your subject; know everything there is to know.

10) Get a coach or mentor to guide you through your studies

11) Share your successes with others, analyze and study your defeats

12) Teach others to sharpen your skills

Thanks for reading,

Stefan Aarnio

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!

Everyday we wake up the morning, we go to work, we earn a living, we come home, we go to bed and do it all over again. Some of us earn a living doing what we love; others earn a living doing things that are tolerable. However, we all earn money the same way – we sell.

The question is, what do you sell?

Most of the population sells their time or a derivative of their time. A Janitor sells his time at a certain rate per hour. A doctor sells his time at a higher rate per hour. As long as we are selling time, labor and skills, we are bound to the labor that we sell.

Years ago, I used to teach guitar to teenagers out of my living room. The work itself was rewarding, enjoyable and fun. However, the part of the job that I hated was that I was tethered to the living room and could not leave town if I wanted to. Every Tuesday, Wednesday and Saturday I had to be in the living room to teach the kids. If I wasn’t teaching, I wasn’t getting paid. Going away on a trip was impossible because I would have to reschedule everyone and give credit to my customers in the summertime which would eat into my vacation time.

While working as a guitar teacher, I decided that selling time was not for me.

I also had a rock band that I played in and managed on the side and the great thing about the band was that I learned how to sell other things besides my time.

I used to put on little rock shows at community centers in Winnipeg and I generally lost a lot of money with those shows. The formula was simple and poorly thought out; put in all the money, take all the risk, invite other bands to play and pray that people showed up to buy tickets to the show. 90% of the time, the bands would not draw a crowd and I would lose money; until I got smart.


Instead of renting the most affordable venue I could find, I started to rent the best venue in the city that I could NOT afford. I would put up $100 as a down payment on a $1000 venue to control a day on the calendar. I would then get tickets printed and sell spots in the show to other bands. I would sell the tickets in the show wholesale for $300 per band and would make profit before the show started. I would then make additional profit at the door and profit off of the merchandise.

Instead of selling time I sold: space, tickets, and merchandise. I liked selling space instead of time so I started to study real estate and today have put myself in a position where I no longer have to sell my time. Instead of selling my time, I sell space in my rental units and the space allows me to earn a living.

Unfortunately for most people, selling is a dirty word. Most people hate selling, they think it’s cheap, they think they are ripping people off, they don’t like rejection, they fear approaching others and asking for money. What is even more unfortunate is that we all sell everyday: we sell our time to our employers, we sell our girlfriend/boyfriend as to why they should date us, we sell our kids on why they should be quiet and stop screaming. Everyone sells, it’s the only way to make money and we have no choice over whether we sell or not – we must sell. However, we do have a choice over WHAT we sell.

We do not have to sell our time; we can sell many other things that are not tied to our labor. Real Estate and business are two ways that we can break the link between time and money and begin to sell things other than our time. When we build a business we get to choose what we are going to sell and begin to take full control of our lives.

There is only one way to make money in this world, and that is to sell. What do you sell to earn a living?

Thanks for reading,

Stefan Aarnio

Freedomway.ca

facebook.com/stefanaarnio

https://twitter.com/stefanaarnio

http://ca.linkedin.com/in/stefanaarnio

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

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

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

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 helpful

“We have this notion in America of the Lone Ranger/Batman type - you know - someone who takes on the world alone. But in reality, all successful people need help. We need advisors, coaches, lenders, customers, and clients. True we ourselves have to do the work, but our "team" that we put together - makes it all worth-while. The sooner we realize this, the sooner we can reach our goals.” – Robert Shemin

Although many entrepreneurs enter the field of business alone, achieving success in just about any field is impossible without a team.

This is especially true in business where “lone rangers” get squashed on a daily basis by teams of professionals.

1)   The local “mom and pop burger shop” gets wiped out by McDonalds,

2)   The local “mom and pop hardware store” gets crushed by Home Depot

3)   The local “mom and pop” department store gets destroyed by Wal-Mart.

These small “lone ranger” businesses may provide better services than Walmart; They may provide better burgers than McDonalds and they may offer more expertise than Home Depot. However, they cannot compete with teams of professionals that make up the talent at Wal-Mart, Home Depot or McDonalds.

One thing that separates “mom and pop” from the Walmarts, Home Depots and McDonalds is that “Mom and Pop” have to sleep: Walmart, Home Depot and Mcdonalds don’t.

Kevin O’Leary, Canadian Investment Guru, once said that he prefers investments that make money while he sleeps.

Investors make decent returns when their money grows during business hours... However, the same investors get rich when their money keeps working for them after they have gone to sleep.



In real estate investing, many investors don’t consider themselves to be entrepreneurs. Most investors manage their own properties, hammer their own nails, paint their own walls, lease their own suites and pick their own deals.

Most real estate investors do not get ahead because they are too busy pinching pennies at the $10 an hour level to make serious dollars at the CEO level.

In order to break out of the $10/hour mentality, it’s up to the entrepreneur to break the link between time and money.

Most of us are taught from an early age that:

Time = Money

In reality, time does not equal money:

·      Sales = money

·      Assets = money

·      Brand = money

·      Press = money

·      Information = money

When time equals money, we are stuck in an advanced form of slavery. We must trade hours for dollars. The problem with this model is that we only have a limited amount of hours and cannot make money while we sleep.

Sandman Empire: (noun) An empire of business or real estate created passively through a joint venture or partnership between a passive money partner and an active working partner. The active working partner handles all aspects of the business and the money partner is only responsible for financial backing. The passive partner is removed from all operations and can essentially sleep; hence the word “sandman”.

Investors who can create a “Sandman Empire” can earn serious returns in a completely passive way and have unlimited earning potential: Investors who fail to create a “Sandman Empire” are limited by time, focus, management, skill sets and capabilities.

But how can one create a “Sandman Empire”?

In investing, there are two types of investors: Active Investors and Passive Investors.

Active Investors are essentially entrepreneurs. They pick their own deals, manage their operations, manage their contractors and run the enterprise. Naturally, these entrepreneurs get the highest returns possible and in many ways, they take a risk on themselves to perform and run the enterprise profitably. Active investors may or may not invest money into their enterprise. Since they invest their entire lives into the business, usually they do not have money invested.

Passive Investors are more like silent partners who park their money with an Active Investor. Silent partners trust the Entrepreneur to run the enterprise profitably. Silent Partners need to be proficient at analyzing people and deals. These Passive Investors are the ones who get the benefits of building a “Sandman Empire” if they can select the right Entrepreneur to grow their money.

Usually passive investments have lower returns than active investments. However, Passive investors can get much higher returns by partnering with an Active Investor and splitting the profits.

If a Passive Investor can find the right Active partner, the possibilities are endless. When financial backing is paired with time and talent, tremendous value and profits can be created.

However, if the Active partner is not chosen correctly, massive financial destruction can occur; including losing the investor’s capital or worse.

A Passive Investor must perform proper due diligence on their Active Partner before “taking a leap of faith” and making a final decision to place their money with him or her.

Some questions that need be answered in the due diligence period are:

1)   Does the Active Investor have experience with these types of assets?

2)   Does the AI have experience with this strategy?

3)   How do we recover if things don’t go according to plan?

4)   Has the AI lost money before? How did he or she handle the loss?

5)   What is the track record of the AI, does it show success? Is he or she hiding anything?

6)   Has the AI built an adequate team? Can the team handle the additional business that the Passive Investor is funding?

7)   How has the AI handled himself when things went wrong? Can he turn bad luck into good luck?

8)   What transparency is offered?

9)   What options does the Passive Investor have to exit if things don’t go right?

10)                 Does the AI have good relationships? Is he loyal and in what way?

11)                 What is the brand of the AI? What does he stand for?

12)                 Is the AI 100% focused and committed to the venture or does he or she have a day job? Do you want a “weekend warrior” managing your money?

13)                 What is the X-factor for this AI? What makes him the over-the-top best choice for your dollars? Are you investing in someone who takes care of the details and provides an excellent product and experience? Or just another “real estate guy”?

If an Active Investor can provide satisfactory answers to all of these questions, then he or she is a prime candidate to build a “Sandman Empire”.

Of course you will have to trust and verify all of the answers to make sure that the “walk” matches the “talk”. When it comes to money, people will say whatever they have to get your dollars. Don’t be a victim of bad due diligence, put your potential partner through extensive scrutiny, ask the hard questions and make sure that you have a competent, trustworthy partner to build your empire while you sleep.

Thanks for reading,

Stefan Aarnio

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

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

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 helpful

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

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

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

Photo: My colleague's condo that is not selling.

By Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio

Today I was flying from Winnipeg to Chicago with a colleague of mine and we were talking about business building and namely flipping houses for profit.

My colleague mentioned that he was having trouble selling his condo that had been sitting on the market for quite some time.

He initially put his condo on the Winnipeg MLS with a competent realtor at $120,000. The condo is between 400 and 500 square feet, 1 bedroom, located in downtown Winnipeg and has no parking.

The comparables for the condo indicated that it could be sold for $120,000. 


Since Winnipeg is a semi-hot market, the realtor listed the condo at $99,000 hoping to get a bidding war.

However, the condo has sat on the market for 5 months with little to no interest. 

There is absolutely nothing wrong with the condo, it's cosmetically appealing, priced well and should theoretically sell quickly on the market.

However, serious buyers have avoided this condo for 5 months.

The price dropped from $99,000 to $95,000. Next it dropped from $95,000 to $89,900 firm. Yesterday, my colleague got an offer for $80,000 and his realtor was suggesting that he close at $85,000.

What went wrong with the well priced, cosmetically appealing condo in Downtown Winnipeg? It hasn’t sold even though it is priced $20,000 under comparable value.

I asked my friend if the condo had parking, he replied “no”. Immediately, I knew what the issue was.

I asked him what the demographics were like in the building and he said that it’s composed of mostly students who take the bus to the local university.

At $99,000 or less, this condo is very well priced and a good product, however, no parking and the downtown location create two problems:

1)   Downtown locations have no peripheral street parking.

2)   If the condo doesn’t come with parking, there is nowhere to park the buyer’s car.

People who can qualify for mortgages have jobs, which usually require cars, which require parking. No parking is a huge issue and limits the profile of buyers who would find this product attractive.

Further, the purchasing power of a person looking to buy a condo in the $100,000 to $150,000 range is too great. There are far too many options in the condo market in Winnipeg in that price range and a buyer can easily get a new condo, with parking, in a location of their choice.

My colleague’s product is a nice product, however, his audience is very limited and the people who would like to purchase the product (namely students) do not have the money or purchasing power to buy.

A rule I have learned in my career thus far: The people who are very enthusiastic about buying usually have no money. 

I used to see examples of this rule all the time when I used to rent out my affordable luxury rental suites. People that were the most eager to buy had no purchasing power. Another challenge was the people who actually had cash had a wide range of options and really needed to be sold to buy.

To capture a person with purchasing power, you need to offer the best product at the right price and make your option the only option in the category. My friend with no parking will have a very hard time competing in his category.

When I began my business career, I would create a product I liked and would attempt to build or engineer an audience for it. This formula was extremely painful for me. I lost money numerous times and felt the crushing defeat of failure after failure while trying to create markets for my products. Creating a market and demand for a product is very expensive, very intense and very risky. I would not recommend it to anyone.

 

BUSINESS RULE: Do not try to create an audience, find an audience and give them what they want.

Today in my career, Instead of creating a audiences, I find audiences who are looking for specific products and offer them what they are looking for.

This subtle difference has made the difference between the failures of my past and my current successes.

For example, 2 years ago, rental vacancy in Winnipeg was 0.7% so I built affordable luxury rental units to fill the demand. The units were quickly absorbed by the market and have been 100% occupied since day one. I found an audience and gave them what they wanted.

In January this year I noticed that there were a local investors looking for good cash flowing Real Estate Deals. I made it my mission to find them Deals, partnered with them and have done 12 Joint Ventures this year. Finding partners has not been hard because I fill the demand of the audience.

In the Real Estate Investor world I am approached weekly for mentoring, coaching as well as speaking. I did not get into Real Estate to be a speaker, coach or mentor, but I have started offering services as the demand dictates. If the audience wants coaching, I offer them coaching, if they do not want coaching, I do not offer them coaching. I absolutely hate risk, so I will not invest my time into something that people do not want.

I have also noticed that there is a huge audience of investors on the Internet searching for information. To feed this demand, I have been providing valuable, organic daily blog content to the audience and the results have been overwhelming. My blog has become my secret sauce.


The lesson that I have learned from my experiences is to know your audience inside and out. Know what they want, know what they don’t want and make sure you deliver at the right price. I no longer create speculative products and services because the risk is too high and it’s the formula for failure.

The formula for no risk profits is very simple. Find an audience, connect with them, find out what they want and deliver it at the right price.


You don’t have to be a genius to figure out the formula above and that’s why the best entrepreneurs in the world are middle school/high school/college dropouts:

Business is a simple game, keep it simple.

Thanks for reading,

Stefan Aarnio

Thanks for reading,

Stefan Aarnio

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

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

By Stefan Aarnio
Freedomway.ca

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

Anyone who has ever become successful in reaching their dreams has always had a series or roadblocks to overcome.

Whether you are a Real Estate investor who has dreams of building an empire, a Entrepreneur with the next great idea or an Artist with the next great vision, we all have a series of challenges to face before we can become successful.

One common challenge that everyone has to face when chasing our dreams is that somewhere along the way, we require capital.

This is true for absolutely everyone. Whether you are the Real Estate investor requiring capital for buildings, the Entrepreneur requiring capital for a venture or the Artist requiring capital for an Art-form. The requirement is universal and every business/successful person requires funding at some point in his or her path to success.

Unfortunately for many people, raising capital is a "black box of voodoo" that many do not understand. Some of us are held back by limiting beliefs that "we do not deserve" to have capital or that we need to be born with it to be successful.

Nothing could be further from the truth.

Raising capital is a science and an art form. It obeys the law of certainty much like everything else in this world.

If certain things are done in certain ways, certain results are certain to occur.

With that being said, here are 5 Secrets to Raising Capital shared with me by the very-successful capital-raiser JT Foxx:

1. Dress to impress: We only have one chance at making a first impression. The timeframe for establishing a good impression is a very short window between 3 and 30 seconds. As social animals, we are constantly looking for reasons NOT to do business with other people and we will scrutinize every minor detail to disqualify a newcomer. Some key details for dress are: the quality of suit, polished shoes, quality of business cards. Anyone who is idealistic enough to think that these things don't count is delusional. Even legends like Steve Jobs, Richard Branson and Hugh Hefner had to wear suits early in their careers. Dressing to impress is an easy way to ensure success.
2. Pay attention to your branding: Effective branding is extremely important for anyone who wants to raise capital. However, branding is so much more than just a name, a colour and a logo. Branding is a feeling and an emotion surrounded by you and your company. What feeling does an audience get from you? Some easy ways to find out if you have effective branding or not are; Do you show up effectively in Google? Do you have pictures of yourself with successful people? Branding is what separates the top from the bottom in any business and it ensures a potential investor that you are not a fly by night operation.
3. Know your numbers and be conservative: If in doubt, always be conservative. The worst mistake so many people make is that we try make our deal look better than it really is. A savvy investor will always poke holes in your strategy and call you on a plan that is too optimistic. If you appear to be misrepresenting something then you will scare away your investor and their money. Provide a "best case", "realistic case", "worst case" and "nightmare case" scenario. If your investor is ok with the "nightmare case", then you know that you have a deal.
4. Back end is more important than the front end: Congratulations! You raised the Capital! Now what...? In a perfect world, raising the Capital is easy. What is much more important, however, is how you manage the "back end" of the deal. How good are you at "taking care" of the investor's money? Savvy investors are very hesitant to part with their money and you need to show them some accurate monthly reports with precise information. One of the worst things you can say to an investor is "I run the business and I do my own books." Investors want to see audited financials by a certified account. If you can provide this information you show that you are a professional, understand what they need to feel secure and have built a competent team.
5. Make it about more than the numbers: Relationships are always the most important thing in business. When you pitch a deal or yourself based on the numbers, you are selling yourself short. If you are placing all of your value on the numbers alone, you are in big trouble. Don't be known as "the 12% guy", because later when the "13% guy" comes along, you will be finished. Instead, focus your presentation on your relationships, philosophy and results. Sell the vision of the big picture to your investors and have strong, realistic numbers. If you can provide all of the above, then investors will be calling you looking for a good place to put their money.

Raising capital is a skill that very few people have mastered. It's a skill that revolves around sales, marketing, branding, relationships and understanding the numbers. If you can focus on the 5 fundamentals above, then raising the capital required to build your dream will always be easily found.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

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

By Stefan Aarnio
Fredomway.ca

Remember: Please share if you found this article helpful!

A wise man once said "put your money where others can see it."

As humans we are tribal creatures and we are constantly judging and placing value on each other on a social scale.

Some people we meet score high on the ladder, others score low on the ladder.

All of this value is calculated and determined within seconds of meeting; aka: a first impression.

We are able to calculate social value extremely quickly and can determine if we want to further associate with a new prospect within 30 seconds of meeting them.

There is an unwritten rule in dating, networking, relationships and business that states:

• 3 seconds will buy you 30 seconds
  
• 30 seconds will buy you 5 minutes
• 5 minutes will buy you 30 minutes
• 30 minutes will buy you 2 hours
• 2 hours will buy you a day

There are many variations of this rule, but the concept is always the same.

When we meet people, we run a series of subconscious tests to see if we find enough value to bring our new prospect into our social circles.

If we find a person's appearance to be inoffensive, we will give them 30 seconds. If we find them to sound somewhat intelligent in an introduction, then we will spend 5 minutes with them. If we find them interesting, we will spend 30 minutes with them. If we feel good after 30 minutes, we will spend two hours with them. If we still like them after 2 hours, we will spend a day with them.

Every single person works the same way, we are constantly screening who we will and will not accept into our social circles.

The question is, if you had to invest money into yourself, would you invest in the first 3 seconds of yourself or would you hold back and invest later in your social process?

Although some may argue that "getting to know a person on the inside" is true value, we all behave the same way when we go on a first date. Even idealists who believe in "truly" knowing people on a deeper level invest heavily at the beginning of the relationship.

A wise man once said "If everyone kept the promises they made on a first date, there would be no such thing as divorce."

Lets consider a first date...

The man puts on his cleanest, best clothes, shaves his face, washes his hair, puts on cologne, shines his shoes, tucks his shirt in, brushes his teeth, cleans his car, shows up on time, holds the door, pays for dinner and drives his date home as a gentleman.

The woman puts on her best dress, shaves her legs, washes her hair, puts on perfume, picks out the most sexy shoes, tucks her stomach in, brushes her teeth, shows up on time, acts like a lady, says please and thank you and gives her man a modest good night kiss.

These two people have invested heavily at the front end of the relationship because they want to give a good first impression.

They want to impress their date in the first 3 seconds to earn 30 seconds. They want to hold their date's attention for 30 seconds to get 5 minutes, they want to say the right things in five minutes to earn 30 minutes, they want to be interesting enough to last two hours and eventually spend a day together.

Out of the whole process, however, the most important part is the first 3 seconds.

If you don't look appealing, confident, happy and successful, the rest of the social process is difficult and potentially impossible.

If I am going to invest money into myself, I will stack all of my dollars in the first 3 seconds to create a great first impression.

10 WAYS TO CREATE A GREAT 3 SECOND FIRST IMPRESSION:

1. Smile
2. Be well groomed (hair is trimmed, styled, no facial hair)
3. Shoes are shined, appropriate for the setting (Lace-up oxfords are very versatile and so are dress loafers... wingtips are good too). Your shoes must communicate social value. Shoes indicate how you spend your time, what your profession you are in and are a primary indicator of social status. Spend some money on really good shoes - it's worth it.
4. Pants are pressed, tailored and "break" only once.
5. Shirt is clean and pressed, white collar is stiff, shirt is appropriately buttoned for the occasion.
6. Tie is tied, selected and worn appropriately for the occasion. Tie bars may or may not be fashionable, depending on the setting/demographics of the room.
7. Blazers have appropriate color and lapels for the current fashion and setting. There are over 9 types of common lapels. Spend some time to learn about lapels, they are extremely important for social status. Men's magazines like "GQ" can give you an idea of what messages different lapels give and which ones are relevant today.
8. Your wrist watch must fit well and be appropriate for the setting. No cheap watches. If you don't want to spend thousands of dollars on a watch, pick a fashion brand that at least lets people know that you know a fashionable name for a few hundred dollars.
9. Jewellery is kept to a minimum and is kept tasteful. No costume jewellery.
10. If you are wearing a suit, it MUST be tailored, no exceptions. Nothing looks worse than an un-tailored boxy suit from Moores.

If you can follow the 10 rules above, depending on your geography, you will automatically be in the top 80-95% of people for giving off a clean, professional appearance which is invaluable in today's social market.

Social opportunities are always offered to those that look clean, professional and successful. Maintain your appearance and invest in your first 3 seconds because it only takes 1 person or opportunity to change your life. Remember, you only get one chance to make a first impression.

Thanks for reading,
Stefan Aarnio
Freedomway.ca

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

By Stefan Aarnio
Freedomway.ca

Remember: Please share this article if you found it helpful.

In October, 2012, I had the wonderful opportunity to spend the day with George Ross in Chicago. George Ross is Donald Trump's lawyer, right hand man and business partner on select deals. George became famous on the hit TV show "The Apprentice" and although he has written books on negotiation, closed some of the world's most exciting real estate deals, he is more famous for sitting in Trump's board room than anything else.

George has been practicing law for more than 50 years and has closed more deals than any other lawyer. He has taught university courses on how to negotiate hard deals and has written two books on negotiating. With a lifetime of accomplishments behind him, George has lived a somewhat anonymous life until he fired a few "kids" on "The Apprentice". After being featured on the Apprentice, George is famous for firing people with Trump.

George Ross has dedicated his life to negotiation, it's a topic that has fascinated him and it is one of the most important skills required to be successful in business.

The two skills that most entrepreneurs fail at, according to George Ross are:

1. Time Management, and
2. Negotiation

Those are the two skills that separate the top from the bottom in entrepreneurship.

One study on negotiation that George shared with us was "the Top 3 traits desired by CEOS for top negotiators"

THE TOP 3 TRAITS FOR NEGOTIATION

Years ago, 150 CEO's were contacted and were asked for the top 3 personality traits desired for the company's best negotiators. The Top 3 desired traits were indeed very surprising:

1. Personality
2. Knowledge of human nature
3. Ability to organize information

Negotiation is a people game and all of the traits above are all people skills. These results surprised George when he saw them. However, when we look deeper into each trait, we can see why these traits are highly desired.

NEGOTIATION TRAIT #1: PERSONALITY -  if people don’t like you, they won’t negotiate with you. Successful negotiation depends on whether or not the other side likes you. Negotiations are PEOPLE TO PEOPLE. Before the days of cell phones, Ross used to ask “can I use your telephone to make a quick call?” Once inside his opponent's office, George would take a peek at items on their desk so he had subjects to talk about like golf, wives, mistresses, baseball etc. In one office, George saw a huge fish on the wall and Said “you must love deep sea fishing”. The man he was negotiating against said “I do!”… George said “I Love deep sea fishing too” (George knew nothing of deep sea fishing, but ran with it. )


TIP: Google a person before you engage with them so you know a little bit about them them before you try to talk deals. Try to learn as much as you can about the other side.


NEGOTIATION TRAIT #2: KNOWLEDGE OF HUMAN NATURE - People are basically predictable with what they do. Due to human nature, you can see what they do and rely on it. If you use this, you can see patterns in behaviour and predict a person's next move. 

Typical human nature: Everyone loves a "Freebee" such as "buy 2 get one free". This tactic exploits human nature and people end up with 3 things they don’t want. 


Exclusivity: Everyone wants what they can’t have. This is why “limited edition” is so effective. 


Scarcity: “Last 2 items" and Time sensitive offers are extremely effective negotiation tactics: “this deal is no good after 10 days” or "70 day supply for free, just pay the shipping." George reminded us that NOTHING IS FREE, especially in negotiation.


Another pillar of human nature is "The AURA OF AUTHENTICITY" which is the tendency people have to look at something and believe that it is true. If something is in print, people believe it to be true: “I read it in 'The Times' therefore it’s true". Of course, a reporter’s opinion is just an opinion, "but if it’s printed in 'The Times' then IT’S TRUE".  Celebrities are often used to endorse products for “Truth”. 

In retail environments, the Aura of Authenticity is often used with a tactic called "Suggested Retail Value". Often you will see something like this in a retail store:

1. RETAIL VALUE $700, 
2. today’s price $500, 
3. you save $200, 
4. SALE THIS WEEK ONLY $450 
5. you think “I’m making money by making this purchase, how can they afford to sell me this item?" people are convinced that the price is real because the price is in writing. Car dealerships have the suggested retail price that is ridiculous, no one ever pays that. The brochures look so amazing and beautiful, you believe it.  These are negotiation tactics that are slanted against you.

The third key negotiation trait is the ABILITY TO ORGANIZE INFORMATION: Most people are bad at organizing information and this makes them bad negotiators. Most people use sticky notes to store information and can’t organize them. 


Years ago, George took a course in time management and the professor said "ALWAYS KEEP a spiral notebook and leave it on your desk, everything you do goes in that book". George thought this idea was a "crock" until he saw a spiral bound notebook on Trump’s desk: Keep a log of daily events. 


PRIORITIZE… when orders/papers/statements/tasks come to you, make 3 files A, B ,C:

1. The "A file" - everything that has to done quickly goes here.
2. The "C file" -  everything that can wait is C
3. The "B file" - everything that is nether an A or a C goes in the B file

Eventually everything in the files will be sorted and done. Ignore the things that are not important. 


Pay attention to the 80/20 rule, 80% of your income comes from 20% of your clients. Concentrate on the 20% and forget about everything outside of the 20%. THE REST IS NOT WORTH IT. 


Don’t waste time in tasks that will not create a tremendous reward. 


Don’t try to grab every dollar, just get the first 20 cents, that’s where all the money is. 


After spending time with George Ross, I have since purchased a few books on negotiating and am becoming a student of negotiation. Everything we do in life is negotiation and we must study negotiation to be successful in our endeavours.


What are you doing to improve your understanding of negotiation?


How can you become a better negotiator?


Which of the three traits are you weakest at?


Thanks for reading,
Stefan Aarnio
Freedomway.ca


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

By Stefan Aarnio
Freedomway.ca

Remember: Please share this article if you found it helpful.

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!