SMALL RISK AND BIG REWARDS

Marketing effectively to your client data base is quite possibly the most important determinant of success in our business.

It's simple, you are running a business and almost all business must advertise. And surprise! No matter what kind of business, those who advertise the most, usually do the most business and in turn generate the most profits.

But most businesses have to spend huge amounts of money to advertise themselves to huge amounts of people in hopes of doing business with a very small fraction of them. Luckily, we don't have that issue.

We know with tremendous likelihood who our customers really are. They are those that reside in our spheres of influence and our past customers.

For all of the reasons above, it makes perfect sense that if you want to grow your business, the opportunity is right there in front of you. Do more with the Media Center and by increasing your marketing dollars you will see returns that are exponentially greater than the risk.

Spending money with the Media Center is like handing out one dollar bills and getting twenties in return. Just have a little faith and do what all great business do.

CARING IS WINNING

Last week we looked at how important it is to view our disciplines as the rewarding annuities that they are and to reject procrastination as the plague that it is. By taking proactive measures to improve the way you do business now, the resulting efficiencies and successes will yield results that will pay off with greater income in less time as long as you do it right. 

To do it right, first keep in mind that taking your business to a new level begins with you, because your business only has one truly essential asset, and it's your brain.

Therefore, it only makes sense that if you want a better business, get a better brain. Just kidding! So until the medical world perfects brain transplants you're stuck with the one you've got, so you may as well make the most of it.

From reading here every day, you already know where to go to learn more and feed your brain to be the best professional you can be, but it's important to remember the old adage that people don't care how much you know, until they know how much you care.

Being able to see things from the customer's viewpoint, listening and asking the right questions, are just the beginning. You must have a genuine interest in helping your customers and an ability to focus all of your attention on their needs in order to show them you care. If you do, they will sing your praises for years.

If not, well... you know. 

CARING IS WINNING

Last week we looked at how important it is to view our disciplines as the rewarding annuities that they are and to reject procrastination as the plague that it is. By taking proactive measures to improve the way you do business now, the resulting efficiencies and successes will yield results that will pay off with greater income in less time as llong as you do it right.

To do it right, first keep in mind that taking your business to a new level begins with you, because your business only has one truly essential asset, and it's your brain.

Therefore, it only makes sense that if you want a better business... get a better brain. Just kidding! So until the medical world perfects brain transplants you're stuck with the one you've got, so you may as well make the most of it.

From reading here every day, you already know where to go to learn more and feed your brain to be the best professional you can be, but it's important to remember the old adage that people don't care how much you know, until they know how much you care.

Being able to see things from the customer's viewpoint, listening and asking the right questions, are just the beginning. You must have a genuine interest in helping your customers and an ability to focus all of your attention on their needs in order to show them you care. If you do, they will sing your praises for years.

If not, well.... you know. 

THE PRICE OF SELF DISCIPLINE

“Hard work pays off over time, but procrastination always pays off right now.”

We all procrastinate at least a little and where we sit on the "procrastination scale" has a greater impact upon the success of our lives than any single thing other than our attitudes. But unfortunately, even the world's greatest attitude won't compensate for serious procrastination issues.

Whether you call it hard work, dedication or sacrifice, the important thing to understand is that when you commit to something, the benefits do pay off over time and what was once viewed as "hard work" becomes a way of life and the only acceptable way of life.

Let's go back to being in better shape example from yesterday. Many people claim to not have enough time to exercise, but those who do exercise regularly will tell you that the time spent exercising pays back with better sleep. Likewise, those who sacrifice to save money find that the money they save affords them the ability spend more. 

Your business is much the same. A little commitment and temporary sacrifice now will yield benefits that make procrastination look like the demon that it is. And you'll get the time back tenfold.

To be continued...

DOING BETTER

Taking your business to a higher level of repeat and referral business doesn't happen overnight. Rather, it evolves over weeks, months and years, and it manifests itself one improvement at a time.

And regardless of whether your net revenue puts you on the first or the last page of the production report, there is always room for improvement. What self respecting loan officer can look back at what they produced recently and honestly say "that was as good as I can possibly do?"

It's like anything else in life, no matter how well or how poorly we are doing, we could always do better. For example, who couldn't be in better shape or save more money? I know I could. But the real question is, do we want the reward enough to pay the price?

It's called self discipline and it's not exactly a new item.

But those with true self discipline has led them to incredible freedoms and long lasting benefits. And taking your business to the next level beings with that very same mindset.

INTEREST WITHOUT RATES

“If you want to be interesting, be interested.”

The above sentence is the eight word key to popularity and sales success. So please read it again above and find out how below.

Being interested in whomever you are speaking to is the first key to successful conversations. Put yourself in their shoes and try to see things from their perspective. Adopt a "what can I do for you?" attitude. And above all, try to avoid worrying about what you just said or what you are going to say next. Those voices in your head will make it impossible to really hear what the other person is saying.

A compliment is always nice, too. Just make sure your compliment is specific and genuine or the compliment will fast become a detriment.

Other keys to successful conversations are to smile, make eye contact, show a positive attitude and to listen more than you talk.

Please remember that in the end, it is not what you say that truly matters, rather how it felt talking to you that people will remember.

KEY ELEMENTS OF GREAT COMMUNICATION

Unless what you say benefits the other person, don't say it.

If you attack another person's beliefs, you are making an enemy.

Listening without prejudice or distraction shows the greatest respect.

When you speak always try to ask a question.

Operating solely out of self interest will show and you will be tuned out.

And most importantly, remember that honor is a gift you give yourself. It will serve as a magnet for others that is far more impactful than anything you can possibly say.

FORGIVE AND FORGET

When we are angry at another person it frustrates.

When we get really angry at someone it brings us down too.

When we stay angry at someone it is full-on self torture. We lose, they win.

The ability to forgive others misdeeds is one of the great gifts we humans possess because harboring anger will hurt you every time. forgiveness is not condoning what someone did, it is moving past it for your own good. It is taking control and not letting the misconduct of others affect us in a negative fashion.

Over 2,000 years ago in a Jewish carpenter taught the world about forgiveness and then gave his life so that we could have those benefits. So lose your anger and try a little forgiveness. It has been liberating people's minds for well over 2,000 years!

NOTHING NEW, JUST SOMETHING GREAT

Our business is all about relationships and helping others.

In order to build those relationships and help more people it is imperative that we take the lead by being proactive it is imperative that we take the lead by being proactive and simply calling our past clients and spheres. Making contact with your customers and others who can refer you business is still and always will be the number one way to generate mortgage loans. The fact is that there isn't enough money on the planet to advertise better than a person to person conversation. 

So make it a point to block at least two hours this week to do nothing but call your past clients. You have much to offer because you know things that they care about and don't know. Since you do, that long lost past client that you call will almost certainly be happy to hear from you, so just get over the call reluctance now because it's not applicable.

Setting aside the uninterrupted time do this is 99% of the battle. Because once you realize how enjoyable and profitable our most important task is, you won't ever look back!

DECISION MAKING

“When each is thus considered separately and comparatively, and the whole lies before me, I think I judge better and less likely to make a rash step.”

We all wrestle with difficult decisions in our lives but did you know one of the most famous men in our country's history laid the groundwork for effective decision making in the 18th century?

In a letter to Joseph Priestly (the English scientist who discovered oxygen), Benjamin Franklin commented about complex decision that Priestly was faced with. Franklin wrote that "the problem of deciding inexplicable situations is that all reasons pro and con are not present to the mind at the same time."

To solve this little conundrum of human nature, Franklin would divide a sheet of paper into two columns "pro" and "con". Then over the next several days he would write in each column the positives and the negatives of the decision as they occurred to him in order to more carefully evaluate the decision.

The best part of Franklin's system is that it works because our minds can act like pendulums when face with complex decisions!

SUPPLY AND DEMAND REVISTED

Employment always will be the most important factor in all non-vacation housing markets. More jobs translate into more people who need housing. When housing needs can not keep up with demand, prices rise. Just as surely, prices will fall in a region with a net loss of jobs, which translates to an over supply of housing.

This simple economics lesson in housing supply and demand is even more apparent when one understands that the demand part of the equation is driven so robustly by employment.

The other basic of economics at work here is that interest rates and unemployment rates tend to have an inverse reaction. In other words, rates are usually lower during periods of high unemployment while they rise during times of low unemployment. This one is great for us because it means people tend to buy more often when rates are higher so we can refinance them when the economy slows, unemployment goes up and interest rates go down!

So next time you hear "these higher interest rates will hurt the market," you will know differently. most of our country's biggest real estate booms have happened during times of higher interest rates thanks to jobs!

Tomorrow... where to get the facts about employment.

COMPLIMENTING COMPLIMENTS

Yesterday we looked at the fantastic benefits of giving compliments. You can never underestimate just how beneficial a compliment can be for the person on the receiving end.

Compliments will truly win friends and influence people as long as they are done sincerely. However, if a compliment is not sincere, it may as well be an insult.

Phone compliments fall flat on the target because people as long as they are done sincerely. However, if a compliment is not sincere, it may as well be an insult.

Phony compliments fall flat on the target because people of almost any age can smell a lie from any distance. Therefore it makes sense to only give compliments that you sincerely believe to be true; otherwise the results could be disastrous.

Also, be careful to use compliments sparingly. If you compliment someone too often, it can backfire the same as a phony compliment. Be genuine and make sure the compliments that you make really count by understanding what might appeal to the recipient of your gesture. You both will have a better day as a result.

DEALING WITH ADVERSITY

1. Know the source of adversity and strength. What makes you strong and what makes you weak? Overcoming anything begins with honest knowledge of situation of self.
2. Unite together and lift each other up. Most problems are not meant to be taken on by only one soul. Seek the advice and support of friends and experts because two heads are always better than one, especially when adversity has clouded the judgement. And remember that no matter how bad or good you have it, someone else out there has it worse or better!
3. Get ready for the long haul and all of its up and downs. Sometimes life's events are like a yo-yo. Accept it, shrug it off and think long term.
4. Remain focused. We are all the sum total of our thoughts. Focus on what needs to be conquered. Overcoming adversity starts with visualizing the happy ending.
5. Remain faithful to a higher power's calling in your life. Each of us has the unique ability to leave a positive imprint upon the world, which is really about the highest aspiration anyone could have. And we can choose to do it every day or just when we "feel up to it." The decision is yours.

ADVERSITY

Adversity is defined as misfortune, hardship and suffering or a highly unfavorable experience or event. Yet to others adversity is defined as an opportunity to overcome and to grow.

After all, without at least a little adversity, life would be truly boring. Adversity turns challenges into victories, losers into winners and hard times into valuable lessons. But that doesn't mean its all fun and games.

On the contrary; adversity sucks.

But the only thing that sucks more is not overcoming adversity and missing out on the satisfaction gained when you triumph over it. The history of the world is full of great stories of overcoming adversity and most all of the great achievements of mankind have adversity written all over the first chapter of the story.

In fact, most of your own greatest tales of accomplishment probably being with adversity. They have to; otherwise the achievement itself would be only routine.

So the next time life serves you up a misfortune sandwich, accept it for the opportunity to grow that it is and pay close attention to tomorrow's LO Insights where we look at several ways to deal with adversity. 

THE GREATEST INVESTMENT EVER

There isn't a parent alive who doesn't want their children to attend college. There may be a few who don't, but most of them are in jail so their vote doesn't count.

The latest information from the U.S. Census Bureau reinforces the value of a college education as being one of the most supreme investments of all time...

In 2004, adults age 18 and older with a bachelor's degree earned an average of $51,554, while those with a high school diploma earned an average of $19,169 and advanced degree holders earned an average of $78,093.

The numbers don't lie. A college education is an amazingly profitable investment. Every dollar spent on a college education produces nearly $35 in increased lifetime income. A rate of return that would make the world's best fund managers blush.

And the benefits go far beyond the money. College attendees tend to have better health, job satisfaction and social relationships just to name a few. 

But college costs just keep going up. In fact, over the past 40 years, higher education costs have increased almost twice as fast as inflation.

College may be expensive, but the only thing more expensive than getting a college education is not getting one. And it all starts with the parents saving early for the ultimate investment and for many of them it won't happen unless you help show them the way and truly make a difference in their lives.

Stay tuned this week as we look at some ways that you can help change your customers world for the better by showing them how to make the world's greatest investment a reality for their children. 

THE GOLD STANDARD

We are familiar with the "Golden Rule: also known as the "ethic of reciprocity". But did you know that it is a fundamental moral principle found in virtually all religions and cultures?

It simply means, "treat others as you would like to be treated." The golden tule has been for several millenniums the most essential basis for the concept of human rights, friendship and success in our personal and professional lives.

In order to apply the golden rule effectively, we need a little knowledge and imagination. We need to understand what effect our actions have on the lives of others. And we need to be able to imagine ourselves accurately in the other person's place on the receiving end of the action.

With knowledge, imagination, and the golden rule, we can all make the world a better place for others and ourselves. So this weekend try adding a little more Golden Rule in your life and enjoy the benefits of the world's most important belief!

THE LOST CITY OF URAVAN

Yesterday we touched on how housing prices are driven by employment more than any other factor and there is no better example than Uravan, Colorado. Uravan was a town in western Colorado established by the U.S. Vanadium Corporation in the 1930s, which gets its name from the first syllables of uranium and vanadium, the minerals mined there.

During World War II, Uravan provided much of the uranium needed for the first atomic bomb. In the early stages of the Cold War, business in Uravan and the surrounding area thrived as the demand for uranium boomed in the 1950s. This attracted many prospectors to the region leading to another boom in housing and rapid appreciation throughout Uravan and the surrounding towns.

The military's need for uranium declined in the 1960s, but commercial nuclear power plants replaced the military demand and kept the residents employed and the town prosperous.

However, this market virtually collapsed by the end of the 1970s as a result of economic strains caused by the energy crisis, popular opposition, and finally the Three Mile Island nuclear accident in 1979.

By the early 1980s, Uravan was almost entirely deserted and property values in the entire region suffered and still suffer today from the loss of so many jobs in such a sparsely populated region.

Uravan is now an abandoned ghost town and Superfund site. All that remains are a few historical buildings and miles of the dirt that has been plowed under. It is an eerie sight and a sobering reminder of the enormous impact of employment upon a local economy. 

JOBS RULE THE MARKET

You've read it here before that the largest factor to cause home prices to fall is not interest rates, it is unemployment. This makes perfect sense because no matter what interest rates are, if an individual is unemployed they will very likely not be in the market for a new home.

Nothing illustrates this point better than the fact that the last time there was a nationwide decline in home prices was during the Great Depression when unemployment rates were over 25% in our country. In fact, during the Great Depression, multitudes of homeowners lost their homes partly due to unemployment and a lousy economy.

However, most of them lost their homes then because mortgage documents at that time had a clause that allowed the lender to call the loan due at any time. During that time the banks exercised their clauses frequently because they were losing so much money from gambling in the stock market, which crashed in 1929 and from other uncollectible debts and lost revenues that resulted from the economic devastation of the Great Depression.

The unemployment problems of the Great Depression began turning around in 1933 thanks to FDR's "New Deal", which included massive increases in deficit spending and new banking regulations, but it was a slow and painful process. The unemployment rate was still an extremely high 15% in 1940. The unemployment problem was "fixed" by World War II and the drafting of 11 million men, which resulted in about 20% of the work force being removed from the labor pool.

INTEREST RATES AND THE FED

The Fed has only three possible economic positions; neutral, accommodative and restrictive. A neutral policy indicates that the Fed is taking a position that neither over stimulates or restricts economic growth.

A restrictive policy is where the Fed is taking the position that economic growth needs to curtailed in order to keep inflation in check. Conversely, and accommodative policy is one in which the Fed is attempting to stimulate economic growth by reducing interest rates in order to keep the economy rolling at a steady pace.

However, the Fed's tweaking of the economy is by no means an exact science. In fact, historically the Fed has frequently "overshot" when increasing or decreasing rates because their actions tend to take from six to nine months to filter through the economy.

This helps explain why mortgage rates will often move in the opposite direction of a Fed rate change. If the Fed increases rates, it is often viewed as a positive by the bond markets which include mortgage backed securities, because the Fed is fighting inflation.

On the other hand, when the Fed reduces interest rates, it is often viewed as a positive step for the economy and the equity markets and therefore money flows our of bonds and into stocks which reduces the price of bonds and increases mortgage interest rates.

(Stay tuned later this week for more valuable insights about the Fed funds rate.)

HOT INFLATION AND A COLD WAR

We all know where they have been and nobody really knows where they are going. What's important for us to know in order to be a trusted advisor is the what, when, and how's of the interest rates.

First and foremost it is vital to understand that there are only two ways that interest rates can increase; an increase in core inflation or a Fed tightening cycle. Core inflation is the most common culprit though as the Fed has only been in a tightening cycle 4 times since the end of the Cold War. Core inflation really began to take hold beginning in the 1950s when interest rates began their longest continuous rise in our history.

In the 1970s we saw long term Treasury yields higher than 7.5% for the first time in our nation's history and then interest rates peaked in 1982. There were many reasons for the precipitous rise in rates in the late 70's/early 80's but none more important than the Cold War which was a systematic shutdown of global democracy that hampered competition and drove rates to new highs.

The generally accepted end of the Cold War when the Berlin Wall fell in 1989, was the most significant turning point for interest rates as it caused interest rates to decline thanks to the world's newly found economic globalization, also known as global free enterprise which increased competition and productivity and reduced interest rates.