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

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I was having a conversation with a friend of mine and I asked her for her opinion on the local Asper school of business.

Her answer surprised me "needed for some, not for others."

Formal education usually has mixed reviews in the business world. Some people love it and swear by it, others think that it is an outdated dinosaur of the industrial age.

Although I did attend the University of Manitoba, and did take classes at the Asper school of business, I am a business school drop-out. My ambitions for taking classes at the school were quickly quenched when I learned that they were grooming me to become an employee and not an entrepreneur. No matter how much education is received from an institution like Asper, the teachers are employees and they train people to think like employees.

Many of the world's greatest entrepreneurs were drop outs: Steve Jobs of Apple, Bill Gates of Microsoft, Mark Zuckerburg of Facebook, Henry Ford and others. These men build their businesses on passion, experience, and practical hands-on-study in their fields. 

"Formal education will make you a living, Self education will make you a fortune." - Jim Rohn

With enough hands on study and experience, these great entrepreneurs build the most valuable asset of all - sound business acumen. The greatest difference between most WANTrepreneurs who have day jobs and real entrepreneurs who derive their livelihood directly from their businesses is:

1) Entrepreneurs live off of their business acumen
2) WANTreprenerus trade time for money

Where entrepreneurs can turn their ideas and passions into assets that create strong enough income to reach their dreams, many WANTrepreneurs are stuck trading time for money building someone else's dream.

In Robert Kiyosaki's game CashFlow, there are two circuits:

1) The Rat Race, a wheel that the players circulate around in collecting pay checks. In the Rat Race, these players have jobs and trade time for money. It doesn't matter if the player has a low paying job like a Janitor or a high paying job like a Doctor. All of the players in the Rat Race trade time for money, have a limited earning potential, are susceptible to the pitfalls of relying on a fixed income i.e.: players may become downsized and lose 100% of their income for a short period.

2) The second circuit in Cash Flow is called the Fast Track and on the Fast Track players move much faster. The Fast Track is reserved for players who have strong enough business acumen to create enough passive income to exceed his expenses. In other words, these players have become smart enough to not need their jobs  and live off of their ability to invest and create income. Players on the fast track make disproportionately more money, have larger deals, cannot be downsized, and are unaffected by many other disadvantages of the rat race.

One circuit relies on trading time for money, the other relies on business acumen.

Many new investors and WANTrepreneurs want to make the transition from the Rat Race onto the Fast Track, but the sad thing is, many of these WANTrepreneurs refuse to invest in their financial education - the most important asset of all.

Your education and business acumen is the greatest asset, far more valuable than Gold, silver, cash, stocks, real estate, companies. All of these "real" assets mean nothing if there is not a strong base of skill and education backing these symbols of wealth.

But if formal business school teaches most people to be employees, then where can one get an entrepreneur's education.

There are many places to get an entrepreneur's education:

1) Books written by real entrepreneurs
2) Seminars for teaching business put on by real entrepreneurs
3) One on one coaching from real entrepreneurs
4) Mentorship or apprenticing under a real entrepreneur

The key word with all of the above is REAL entrepreneurs. When choosing to learn about entrepreneurship or business from someone, it is counterproductive to learn from a good employee. Employees are trained to think differently from entrepreneurs and they collect pay checks instead of build companies.

ACTION STEP:

In your life, ask yourself; "are you living off of your business acumen?" Or are you trading time for money?

What do you need to get to where you want to go?

Who do you need to help you get there?

Thanks for reading,
By: Stefan Aarnio
Freedomway.ca
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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

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 richest people in the world build networks, everyone else looks for work” - Robert Kiyosaki

Love him or hate him, Mr. Kiyosaki is onto something.

I recently spent a weekend with my mentor and I asked him “how can I find more great deals?”

The answer was: “networking”.

Other investors might ask: “how do I find money to fund my deals?”

The answer is “networking”.

This past weekend I was looking for a someone to clean a house I owned.

The solution came from “networking”.

As humans we are pack animals. We roam in gangs, we help each other, we are who we associate with. With people, just like in nature, lone wolves get slaughtered by packs of other wolves. If you are in business, you don't want to be the lone wolf.

Early in my business/real estate investing career I used to act like the tough guy and “go it alone”. I was a one man band, a chief cook and bottle washer and the guy with all the answers. I was the smartest guy on my team, had no connections to mentors or coaches and didn't belong to any networks.

This was the recipe for disaster. Instead of joining a few small local clubs and accessing the information of other investors and entrepreneurs in the market, I tried to re-invent the wheel. The mistakes were painful and costly and I will never forget the lessons I learned.

In business, we are always limited by the resources, skills and knowledge of our team. To grow the business we must access the skills, knowledge and resources of others and there is only one way to find the pieces of the puzzle that we are missing; and that is through networking.

The truth is, everything we need is “out there”. The question is, “who do we need to know” to get what we need?

When I started in real estate investing as a full time investor, one of the first things I did was sit down, write out a list of names of people who would potentially have money to invest with me. What amazes me today, is that almost anyone who knows 100 people can put together $1,000,000 cash to do a deal. Almost everyone, no matter how broke, can access $10,000 cash or credit and if you know 100 people, 100 x $10,000 is $1,000,000. We all have access to at least $1,000,000 – sometimes, we just don't know it.

The top 3 reasons why people don't like to network and why they are wrong:

1. They think that there is no one new to meet
   
   

Just when I think I know “everyone in the business”, I am proven wrong over and over again. Networking events attract all types of people and often it's not the initial person you meet who is the most important – but the people that they know that are most important!

1. They don't want to pay fees to belong to clubs
   
   

Leads, connections and relationships are very expensive to find and maintain. Paying nominal fees to networking clubs and groups is often a very economical way to find all of the above. In many cases, the fee paid to get into the club pays for itself many times over if it's the right group for you.

1. They think that networking is a poor use of time
   
   

The best opportunities never see the light of day. Whenever a great opportunity comes along, it always goes out to someone's personal network before going out to the public. The only way to capitalize on “hidden” opportunity is to be well connected and have a great network. For myself, when I have a deal, it is often gone in less than 30 minutes because the investors in my network snatch it up before I have a chance to show it to any outsiders.

Networking is one of the easiest ways to get a great ROI on your marketing dollars. I spend a considerable amount of my time daily networking, meeting people and finding opportunities. I also dedicate a portion of my income to clubs and associations and make sure I am an active member to maximize my opportunity for my business. If you don't belong to any clubs, it's time to join.

Thanks for reading,

Stefan Aarnio

Freedomway.ca
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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!

Today I received a magazine in the mail that read on the cover “Why Canadian Real Estate Will Plummet 20% and Stay Down For Years”. After seeing the title, I immediately stopped what I was doing, put my schedule on hold and had to read the doom and gloom article.

Canadian real estate is such a broad term that it is impossible to make a general statement about it. Canada is the second longest land mass on the planet after Russia and we cover so many square kilometers that for all intensive purposes, comparing Vancouver to Toronto to PEI to Winnipeg really makes no sense. The Canadian cities are so spread out and so independent of each other that each market is influenced by a completely different set of forces.

The article claims that Canada will plummet 20% and only mentions speculative real estate in Vancouver and Toronto. More specifically, when “experts” talk about Canadian Real Estate, they mostly focus on the Toronto Condo market, which has been red-hot with record sales of 28,000 units and another 240,000 units to be built in the near future.

Detached homes in Toronto were seeing buyer mania with buyers bidding $100,000 over asking price for a detached home. When cheap, dumb money enters a market, idiotic buyers will pay $100,000 over asking for a single detached home in Toronto.

… But what is Cheap, Dumb Money?

Cheap, Dumb Money is cheap because interest rates are at an all time low. Money has never been this cheap in history, so buyers make crazy decisions that they normally wouldn’t. Along with being cheap, the money is also dumb because it comes from someone who is ignorant and uneducated about the market making a speculative play on a piece of real estate. In investing, when cheap, dumb money enters a market, it’s time to sell. When the dumb money is leaving the market, it’s time to get in. In investing, being smart is easy - just do the opposite of what the stupid people do!

When we compare Canada’s real estate to the USA’s markets, Canada has been steadily climbing since the early 2000’s while the US took a nosedive in 2006. Many uneducated people think that Canada and the US are so similar and so connected that Canada is due for a crash as well.

However, what we don’t consider is that the US did not really have a housing crash. What the USA had was mass mortgage fraud. The prices that homes in the US sold for in 2006 were completely fictional and fraudulent prices that shouldn’t have happened in the first place. Cheap, Dumb Money entered the US market via NINJA borrowers (No income, No Job, No assets) and suddenly clerks working at Safeway could own 5 brand new homes in the suburbs where they were planning to “flip” them for a profit. Everyone was speculating with Cheap Dumb Money and prices went insane. The banks underwrote mortgages on completely insane lending standards and lots of fraud happened. The US market crashed because mass mortgage fraud occurred. The low prices we see today in the US are very low compared to the fraudulent prices that were paid in 2006, but they are in line with construction values and rental values in many ways. Real Estate in the USA right now is worth a value closer to the intrinsic value of the actual property and that makes the US market a good place to buy right now.

In my home market in Winnipeg, I write 5 to 25 offers a week and have to acquire a property every 15 days to run my business. I am seeing a divide in the Winnipeg market that has been red-hot for quite some time. Some sellers think that their house is red-hot and needs to sell for an insane valuation; other sellers think that real estate is going down right now and will settle for less. The market is fragmented between those who think the mania that went on in Winnipeg for the last 2 years will continue forever and the realists who think that the market is correcting.

For myself, I think that real estate in Winnipeg will correct in the next 12 to 24 months, and that is only because Winnipeg has been hot for so long. Cheap Dumb Money has been running around in the Winnipeg market for far too long and things have been selling for prices that don’t make sense. It’s not that Real Estate in Winnipeg is “going down” or “getting worse”, it’s just that the mania has to stop. We will likely see less bidding wars, less homes selling over asking price and less insanity in the market.

For myself, I am very happy about this, but I am a professional. Whether the market goes up or down, I’m happy; I can make money either way. All that this means for me, and for you, is that Canadian Real Estate in many markets will be easier to buy in the next 12 months than it has been in the past. Negotiating will be easier, getting discounts will be easier and for myself, the business will become more fun (I love to buy).

Stefan Aarnio
Freedomway.ca
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By: Stefan Aarnio
Freedomway.ca
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Everyone loves perfection.

We demand perfection when we go out to a restaurant for dinner. We demand perfection when we go the dentist to get a tooth drilled. We demand perfection when a relative goes into the hospital for surgery.

Of course, perfection has a cost - perfection is not cheap!

For our perfect dinner, we need 5-10 people working in the restaurant dedicating their lives to our dining experience plus all of the suppliers of food, contractors who built the restaurant, interior designers who designed the restaurant and everyone else who indirectly created our experience.

When we see the dentist, he usually has a team of 5+ people working in the office plus nearly a decade of post secondary education to earn the right to work on your teeth.

The surgeon is has a similar team and education to the dentist.

Perfection is something we all want, but is it something we need?

Studies show that Top Achievers, the world's most successful entrepreneurs, actors, sales people, sports stars etc. strive for perfection but choose improvisation over perfection.

Top achievers improvise.

Consider the 80/20 rule, 80% of our results come from 20% of our actions. If we want to achieve the last 20% the "law of diminishing returns" comes into effect. After a certain point, the same actions will yield no further results and the last 20% becomes nearly impossible to reach.

Perfection is an ideal, something that we all strive for, but something that we cannot achieve without an irrational amount of effort. Therefore, top achievers will reach their point of satisfaction, improvise and will move onto the next task. 

You are better to grab the first 20 cents of every dollar than to try to grab 100 cents of every dollar because the last 80 cents are so hard to achieve that the return on time yields no measurable result.

Improvisation is a key skill for success. In his book Lynchpin, Seth Godin talks about the concept of "shipping". When creative, influential people are working on a project, they set a deadline and on that day they "ship" the product whether it is ready or not. The deadline benefits the author twofold:

1) It gets the product out the door in it's first revision, the product is imperfect, but it exists and is ready to go.
2) The product no longer has the risk of never becoming completed

Instead of perfection, we have a shipped product that is ready for use and is ready for improvement.

Microsoft (love them or hate them) has a very practical business model. They always "ship" their software - ready or not, bugs and all. The software that they ship is not always ready, but with patches and revisions, it eventually becomes functional and the company is able to earn revenue and serve it's customers. Bill Gates became the richest man in the world by "shipping" his software like this and improvising rather than seeking perfection.

If software companies would hold onto their software until it's perfect, they would all go out of business before the software is ready. The fact of the matter is that perfection should be reached for, but we cannot wait for the "perfect" product to ship because perfect does not exist.

What is much more practical is to produce a good product and slowly adjust it towards perfection.

Even companies like Blizzard Entertainment, the creators of World of Warcraft, the most profitable video game of all time are known for "taking their time" to produce their product. They will develop a title over 10 years and reach the closest they can to perfection without achieving it. After 10 years of development, they will release the imperfect software and continue to patch it to bring it closer to perfection over a 5-10 year period on the back end.

Are you addicted to perfection? Is your addiction holding you back from achieving your dreams?

For myself, I have renamed my company and brand nearly 6 times this year, I have gone through 6 runs of business cards, I have created and re-created 6+ websites to get the exact message I want. My motto is to "ship" whether or not it's perfect and adjust as necessary. The benefits of shipping when it's functional instead of perfect vastly outweigh the drawbacks. For example, I won the Canadian Real Estate Wealth Magazine's Joint Venture Partner of the Year award for 2012 because I had started blogging on an imperfect blog and gained some visibility.

My business was exactly the same with or without the visibility, I still did 12 deals, however, because I had an imperfect blog with imperfect articles distributed in an imperfect way, I was visible and nominated for the award.

Had I not "shipped" my blog until it was perfect, I would not have won the award. The deals still would have been done, but I would have lost out on $30,000 of press and exposure.

Perfection is a fickle mistress, chase her as an ideal, but do not succumb to her allure. Favour the maiden of improvisation and all will be well.

Thanks for reading,
Stefan Aarnio
Freedomway.ca
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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
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Remember: Please share this article if you found it enjoyable!

What would you do if you had all of the money in the world? What is money anyways?

One of my favourite quotes about money/success/business is by Donald Trump:

“I wasn’t satisfied earning a good living. I wanted to make a statement”

What I love about this quote is that the money doesn't matter, the deals don't matter, the success doesn't matter, the lifestyle doesn't matter... What matters is the statement that is made by the work. 

Great Artists make statements, for that is the purpose of Art. An artist produces art to make a statement, Donald Trump builds buildings to make a statement, in many ways Donald Trump is an artist.

Donald Trump certainly does not have to get out of bed in the morning and go to work to pay his mortgage or put food on the table. Necessities like food were never a concern for Trump. Life would be empty if he could not create through his work. A starving Artist is the same, he has no material possessions, money doesn't matter and his life is empty without creating through his work.

When you make a commitment to excellence and stand for something, others will be attracted to your message. In a roundabout way, making a statement is what branding is all about.

Today I was sitting in Starbucks with a couple potential Joint Venture Partners and we were interviewing potential contractors to flip houses with. After one candidate left I made the statement to my partners that the contractor was an old "has-been". After a few minutes of discussing the contractor's flaws, a man sitting at an adjacent who had been listening to us talk said to me "you have to have your own crews!"

I replied "I do have my own crew"

We started talking to the man and he said "you were really arrogant with that last contractor". We continued to talk to him and he said "you remind me of me when I was your age".

It turns out that the man who had been listening in on our interviews owns over 5500 rental units in Winnipeg and is one of the most successful investors in the city. We continued to chat for 30 minutes about the business of real estate and he invited myself and my partners to spend some time with him in the new year.

What is amazing about the experience was that if I had not made such a bold statement, we would not have been approached by the very successful investor at the adjacent table. The connection with one of the biggest investors in the city could be very important in the future and I would have never made the connection if I did not make a statement. If I had cold called this successful investor, he would not take my call. However, since he had observed me and saw what I stood for, he reached out to make the connection with me.

Like attracts like and birds of a feather flock together. Put up a flag, show people who you are and what you stand for and you will attract those who think like you do. People are magnets and we attract other people who are charged like us; this is why branding is so important.

Make a statement, make it strong, make it bold and stand by it.

If you don't stand for something, you'll fall for anything.

Thanks for reading,
By: 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
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
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In Stocks, Insider Trading is illegal. In Real Estate, Insider Trading is essential.

In any market, there are insiders and there are outsiders. When corporate executives on Wall Street buy or sell stocks in their own companies with “insider knowledge”, they go to jail. When a real estate investor gets first chance to purchase a property privately without public knowledge, he gets rich.

Markets like Wall Street are set up like Casinos and TV stations like BNN are funded by Stockbrokers to create excitement and encourage trading. The brokers get paid when trades happen, so they want their audience on BNN to get emotional and make trades. BNN will run stories that pump the emotions of the audience just to make money, the information is not provided to make actual sound decisions.

When emotions go up, intelligence goes down and the house always wins… and you are not the house.

In my opinion, the Stock market is not designed for you to win. It’s a game played by insiders and institutional investors who control their own information. For the average retail investor, there is very little control in stocks, unless you are an insider.

I prefer to control my investments, control the management and control the outcome of my returns. I also prefer to make purchases as an insider with access to the necessary information to make profitable decisions.

Information is king in the market and he who controls the information, controls the market.

In Real Estate you can become an insider by:

1)   Having a large network of other investors

2)   Having a large network of lawyers

3)   Posting private advertisements for deals

4)   Offering referral programs

5)   Having a large network of Realtors

6)   Public speaking in front of groups of investors

7)   Creating content, blogs and videos for consumption

8)   Having a network of property managers

9)   Having a network of private lenders

10)                   Becoming the biggest, most visible person in the market

The truth is, becoming an insider is quite simple in Real Estate. The best deals always come to those who are 1) The most visible 2) Most connected and 3) The ones who control the information in the market.

When a real estate deal hits the local market with a Realtor, the deal has already been cherry picked by at least 8 sets of eyes. The fewer sets of eyeballs that see the deal before hitting the market, the higher the chances are to profit.

In high school it’s easier to date the girl who is the bookworm than it is to date the prom queen.  The prom queen has so many more sets of eyeballs on her so her value is way over-inflated and there is a line up of guys dying to get a chance with her. Avoid the prom queen at all costs and go for the bookworm. With some lipstick and high-heels she can easily be the prom queen, but with a much lower cost.

This analogy applies directly to Real Estate. By the time a house hits the retail market, multiple Realtors have looked at it, at least one broker, a few secretaries, assistants, everyone in the immediate circle from the seller, all of the realtor’s best clients, all of the broker’s best clients, contractors and then other buyers who get to it first.

By the time the property gets to you, everyone has explored any easy chances for profit and you and you are usually too late to the party. Plus, you now have to pay the price that the seller wanted plus the commissions of 2 realtors and 2 brokers. Negotiating becomes muddled because the realtors always have their own interests above their clients and sometimes the brokers can complicate negotiations as well.

When all of these “professionals” get involved, prices begin to rise and favorable terms disappear. All options for good terms or no money down deals go out the window because the Realtors will kill any chances of a “creative deal”. They want to get paid their commissions immediately and do not care about the price or terms of the deal: They just want the transaction to happen regardless of outcome.

However, when you become an insider, or partner with an insider, you get first access to deals before anyone else gets a chance to look.

The best deals I have done have come from:

1)   Other investors who could not close on private deals

2)   Private ads I have placed

3)   My networks and relationships

Being active in the market, participating in local investor groups, having an online presence, private advertising and public speaking have created an insider position for myself in my market. Being visible and sending a clear message that I am “always looking for deals” has attracted excellent opportunities that are well under market value, under appraised value, 100% vendor financed, or no money down. The average person believes that these deals do not exist or are not possible in their local market. The truth is, these deals are available everywhere, but you need to become an insider or partner with an insider to take advantage of them.

The best deals are made and are not advertised on the market because they never ever make it to market. This rule applies to any market: the best girls to date are not advertised on e-harmony, match.com or at the local bar. To find real value in life and in the market, we must become the insider, become well connected, become visible and control the information around us.

The best deals are reserved for insiders, everyone else can pay full price.

Stefan Aarnio
Freedomway.ca
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P.S: Please share this article if you found it enjoyable!

By: Stefan Aarnio
Freedomway.ca
facebook.com/stefanaarnio
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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
facebook.com/stefanaarnio
https://twitter.com/stefanaarnio
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“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

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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 helpful

In life, there is no such thing as a guarantee.

Everything we do always has an element of risk, however, we do not consider every day things like driving to work or crossing the street to be “risky”.

Today I googled “the definition of risk” and this definition came up from thefreedictionary.com:

risk  (rsk)

n.

1. The possibility of suffering harm or loss; danger.

2. A factor, thing, element, or course involving uncertain danger; a hazard: "the usual risks of the desert: rattlesnakes, the heat, and lack of water" (Frank Clancy).

3.

a. The danger or probability of loss to an insurer.

b. The amount that an insurance company stands to lose.

4.

a. The variability of returns from an investment.

b. The chance of nonpayment of a debt.

All of the definitions above involve some form of loss, hazard, suffering and an element of variability, probability or chance.

What I find to be interesting about risk is that every single person I meet has a different subjective definition.

Often, when I am discussing risk with another investor, I will ask what their personal definition of risk is.


More often then not, investors will define risk as the chance or probability that he or she loses on an investment.

This definition is sufficient, but I find it to be a very unsophisticated definition of risk.

Robert Kiyosaki says that intelligence is the ability to make distinctions. The more distinctions we can make, the more intelligent we are.

For example, there are over 7500 variations of apples in the world. When it comes to apples, I am not unsophisticated and can only name a few variations: red delicious, granny smith, crab apples, and Macintosh. When it comes to apples, I am very unintelligent. A person who can name 100 variations of apples is much more intelligent than I am on the subject of apples.

When I hear a person’s definition of risk, I can immediately find out what their sophistication level is when it comes to business and investing.

My personal definition of risk has changed many times throughout my life. I used to believe in luck, and now I do not. All I believe in is actions performed and numbers. Life and business are a numbers game, if you can produce the volume and hit the numbers, you will succeed every time. There is no luck.

My definition of risk is:

Risk: Take an inventory of the elements that are under your control and compare them to the elements that are out of your control. Then ask yourself: am I ok with this? If you are ok, then proceed with the risk. If you are not ok with the degree of control, then do not proceed.

My definition of risk has two primary distinctions that the average person’s definition does not:

1)   My definition of risk assesses your degree of control in a situation

2)   My definition asses your emotions and how you feel about your level of control

Notice that I eliminate “probability” or “chance” from my definition of risk. In my world, there is no such thing as probability because failure is not an option.


Naturally, there are things that can happen outside of my control, and I must address and mitigate all contingencies before proceeding. Should something outside of my control become an issue, the question is: how do we recover form this position?

In my world, I understand that in life and in business, plans fail, people fail, systems fail, markets fail and what is more important than relying on all these imperfect elements is to understand how to recover and “fix” the failures.

I build failure and multiple contingency plans into my ventures and understand that failure and recovery is part of the game.

In real estate, between 5% and 10% on the balance sheet will be factored in for vacancy on multi family buildings.

Restaurants and traditional businesses will build theft into their balance sheets.

Sophisticated business people understand that failure; loss and recovery are all part of doing business and factor it in to their projections and balance sheets in advance.

My definition understands that there are elements in our control and out of our control. There is no luck; only degrees of control. If you are ok with your degree of control, then proceed with the “risk”.

Of course, there is always that moment where we must “take a leap of faith” and no amount of due diligence can protect us from the elements that are out of our control.

What is most important when entering an endeavor with risk is to ask ourselves “how do we escape if we want to exit?”

For myself, I love real estate because no matter how bad things go, there is always a large tangible asset attached to the venture that can be liquidated to recover my investor’s capital.

Again, we come back to elements under control and elements out of control.

When raising capital from an investor or considering a “risky” venture take them through the following scenarios to asses if the venture is right for them:

1)   The best case scenario – everyone loves this scenario, and it rarely happens.

2)   The realistic scenario – this is the likely outcome

3)   The worst case scenario – this is second most likely scenario

4)   The nightmare scenario – this is as bad as it gets, you don’t want to find yourself in the nightmare scenario.

For myself, I have a low risk tolerance and I always say to my capital partners “if you are ok with the nightmare scenario, then we are ok to do business”

At the end of the day, risk is all about emotions. If we are emotionally ok with our degree of control in the risk and how the nightmare scenario would affect our life, then we are ready for the risk.

If we cannot handle the elements out of control and would not be able to live with the nightmare scenario, then the risk is not for you.

There is a famous saying “nothing ventured, nothing gained” and we must all take calculated risks in our pursuit of success. The question is, after exploring a few definitions of risk, how do you personally define risk going forward?

Your personal definition of risk is extremely important because it will define which risks to take and which ones to avoid. To paraphrase Sun Tzu, know yourself and know your enemy and you will be victorious in every battle.

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