Sunday, August 17, 2014

How to Change ANY behavior

Recently I read a book with the title Change Anything that validated something I’ve been teaching for about 25 years. They cite study after study working with thousands of people from their own research plus the studies from other universities, books and institutions. In my book I just had anecdotal stories based on my coaching clients.

The bottom line is that to change any behavior, from losing weight, improving job performance, quitting smoking to improving a marriage or creating wealth, it is NOT a do-it-yourself project and it does NOT involve will power. It requires a structure that involves both the support of other people as well as changes in your environment. In the same way it’s easier to carry a casket with six people, there are six components needed to bury any bad habit and replace it with the behavior that you want.

Let’s say you want to get out of debt, save money, invest money and create financial independence, where you can choose to work if you want, or choose not to work. Here’s an example of what you face when you want to change your behavior:

First you get offers in the mail for another credit card. Then you see on the TV and ad for some gadget that will make your life better. You turn off the TV and on the radio you hear an ad for the same, or a different gadget, book or program that will make your life better. So you turn off the radio and check your emails and see the banner ads for the gadgets that will make your life better. Or you get emails because of some website that you looked at yesterday and they want you to buy the gadget from them. Then PayPal tells you about their new program where you don’t have to pay right away. You’ve had enough and get in the car to get some milk, and on the way to the store you stop at a traffic signal. Jus ahead you see a billboard advertising that gadget that will make your life better. You turn your head away from the billboard and see the same ad for the same gadget on the bus bench next to you.

Do you realize how you are bombarded with advertisements that scream at you from every direction to buy this and buy that, and if you don’t your life won’t amount to anything? If you buy this beer you’ll get beautiful models to fawn over you. If you don’t whiten your teeth no man or woman will speak to you. It’s absurd. But I guess it works, or companies won’t spend the money on all that advertising.

So you think that you can solve this with your will power? Give me a break! I realized many years ago that I was not going to be able to get myself out of debt and create financial independence unless I got the support of some people who had achieved what I wanted to achieve. And that worked for me, and then it worked for my coaching clients.

The Change Anything book identified six areas to use from people to your environment to create the changes you want in your life. I don’t care if you want to change your life or transform your life, using all six of these areas is where the power comes from. Sure you can use one or two of the areas, but that’s like lifting a coffin with one or two people instead of six people.

So, what are the six areas? There are three big areas, personal, social and structural, with motivation and ability in each of the three big areas.
11.    The obvious first area is you need to have the Personal Motivation to change. You want to tap into what you want, what’s important to you, and your desires. Here it’s important to discover you own value system and have it be conscious. You may value family, or learning or integrity, but you have to write it down and make it real.
22.    You need to have the Personal Ability to accomplish your goal. To get out of debt you need to know how much debt you have, how to create a personal or business budget or spending plan. You need to have the knowledge of how to reach your goal, and you may have to get educated on how to do this.
33.    Next you will need to determine if you have the Social Motivation. Do the people around you support good or bad habits? Are the people you socialize with spenders? Are they in debt? Would they feel more comfortable if you achieved financial freedom and no longer had debts? Or do your friends all feel comfortable that you’re all in the same boat together
44.    You have to have the willingness to establish the Social Ability that will support and enable you to follow a new path. You have to either convert the people around you who may be accomplices to your old behavior into friends that will support your new behavior, or you have to find new friends. This is a tough one. You may have to find a mentor, new friends or hire a coach.
55.    Structural Motivation involves things. Do you have the same connection to your money when you use a credit card or real hard cash? Can you see yourself paying for a $300 meal with a credit card or a stack of $20 bills, or three $100 bills? What would give you more of the feeling that you are really paying $300 for the meal? If you want to have the feeling you are really spending money use cash, not a credit card, debit card or check.
66.  Structural Ability deals with changing your environment. Either adding visual cues or removing visual cues can help you focus on what you want to accomplish. An example might be to remove the poster of a cat clinging to a branch in eminent danger of falling. Instead, put up a poster showing a pristine white sandy beach in Bali; with palm trees in the background; you and a mate sitting on lounge chairs, and have this represent where you could live if you didn’t have to work for a living.

For a free copy of my best selling, award winning book, Wealth On Any Income, log onto , enter your name and email address and press the button that says “Click here for your free book.”

Calculate Your Financial Freedom Number

I hope you’ve enjoyed the blog posts up to this point on how the wealthy think and what they do.

Let’s talk about the big picture and how to calculate the level of assets that will generate an income so you can choose work if you want to do that, or choose to do something else, or nothing else. However, I’ve not met anyone in my career where doing nothing was a goal. No one has said to me, “When I stop working I’m going to sit my sofa and watch daytime TV with a beer in one hand and the remote in the other.”

Instead I’ve heard things like;
·         I’m going to travel the world
·         I want to volunteer at Massive Hospital Group
·         I’m going to take my grandchildren hiking along the Oregon Tail
·         I’m going to take up oil painting, fishing, hunting, and distance biking
·         I’m going play golf on one course in every country on the globe at least once
·         Inside me is the great American novel, and I’m going to write it
·         That 40 foot boat in my back yard will be done and I’m going to sail the world…

You may be asking, “What’s the simplest way to calculate what I would need to stop working?” You’ll find this information in the ebook version of the revised Wealth On Any Income that I sent out. If you didn’t receive it, please let me know.

Here’s a quick review: To do the calculation you’ll need to look at your balance sheet. The first step is to subtract the value of personal use assets, like your home and autos, from your net worth. That should leave you with your investable assets, like cash and retirement plans, rental real estate, and so on. Let’s say that total is $800,000. Since we cannot predict how long you will live, we will NOT figure that you’ll spend any capital and end up on your last day spending your last dollar.

The next step will be to determine a rate of return you can earn over the long term on your $800,000 of investable assets. If you have real estate investments, calculate what you are currently earning on the equity after expenses. If it’s in Los Angeles, it may be as little as 2 -3%, or it could be 8-10% in other parts of the country. Regardless it could be converted into another asset, like a Delaware Statutory Trust (DST) investment, and provide an 8-10% cash flow with no management responsibilities.

If you see your investments returning about 6% per year, or you feel that’s a reasonable and safe amount to use, then multiply $800,000 x 6%. This would be $48,000 per year of income. Some of this would be taxable, some might be sheltered. Would a gross income of $48,000 per year maintain your standard of living? If you earned 8% on your assets the return would be $64,000. Would this be enough?

From this you can see you either have enough income, or you need to create more investable assets, or earn a higher return and possibly expose your assets to a higher level of risk.

When you’ve accumulated enough assets that can earn the return you are comfortable with, you will have the income to support your standard of living. At that point you will have achieved financial freedom. Whether you worked for a living or not, you would have the income you need to support your lifestyle.

I look forward to your comments. Was I clear about the steps to take? Is there anything I left out that you want to know?

For a free copy of my best selling, award winning book, Wealth On Any Income, log onto , enter your name and email address and press the button that says “Click here for your free book.”

Attitude #6 of the Wealthy - Opportunities & Challenges

In this blog post I will cover the final two attitudes the wealthy operate by:
11.    The wealthy look for opportunities, not excuses and
22.    The wealthy have challenges, not problems

I think the first one is self explanatory. We’ve all heard, and made, excuses at one time or another. We were late because of “the traffic.” We didn’t finish some project because of “an unexpected emergency.”

When it comes to creating wealth, excuses don’t cut it. Opportunities are all around us if that’s what we are looking for. If you decide to go into business for yourself, all of a sudden business opportunities will show up everywhere. For the first time you’ll notice the sign on your local Subway sandwich shop looking for franchisees, or out of the blue a friend tells you they want to start a ski school. It’s like when you buy a new car all of a sudden you see so many more of the same car on the road than you did before.

Semantics are important. If you have a “problem,” it feels like something ugly you have to face. And it’s not a pleasure to face it. If you have a “challenge” it’s not as ugly, and many people like to be challenged. And they like the feeling of overcoming the challenge. 

I have a close friend, Ralph White, who is a business coach to some extremely successful business owners. His coaching clients are the CEOs of companies that do up to 100s of millions of dollar in sales. He says, “As your intentions grow in scope, so do your challenges. There will always be some challenge that you’re working to overcome or problem to solve on the way to success. Often times I find people are working on too small of a challenge or problem. So, when they solve it, they still don’t have what they’ve been striving for—instead they end up with maybe just enough money to pay the bills. I use intentions to steer clients into larger arenas with bigger problems and more opportunity for sensational results.”

The point is, you want to look for big problems or big challenges. Those produce the big results and the big money.

In one of the next blog posts I will talk about the six conditions needed to accomplish any goal, from creating wealth or losing weight to getting a promotion and even kicking an addiction. You might even be aware of some, but not realize the tremendous power when you use all six together.

It is NOT a do-it-yourself project, and will power is NOT one of the conditions.

For a free copy of my best selling, award winning book, Wealth On Any Income, log onto , enter your name and email address and press the button that says “Click here for your free book.”

Attitude #5 - The Wealth Hang Around Each Other

The following quote from Warren Buffet reminds me of another attitude the wealthy have:
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”

Wealthy people hang around each other.

One of the powerful ways the wealthy create opportunities and maintain their wealth is by hanging around each other. Bill Gates and Warren Buffet became friends. Retreats and conferences bring successful people together.

As an example; Jack Welch of General Electric and Bob Wright, who was the head of NBC, had a conversation at a retreat for business executives in Colorado in 1986. That conversation led to the sale of NBC to General Electric.

After I went through my horrible financial mess I realized the people for me to hang around needed to be financially where I wanted to be, not where I was. My friends were folks that taught swimming, taught school, or were in door to door sales. I was in sales too, but not very successful at it; I was just scraping by.

One of my friends from high school became a successful attorney and began to buy small strip centers. You know the kind you see where there used to be a gas station, but now it has a dry cleaner, a 7/11 or Circle K, a nail salon, and maybe a restaurant. These turned out to be very profitable for him. This is someone I began to spend more time with. I met other people through him who were as successful, or more successful, than he was and it opened my eyes to other possibilities.
It was around this time that my brother died and I inherited a small four-plex. Not knowing how to effectively manage it, I took a class at UCLA by Mel Flack. He was a school teacher by day, and purchased apartment buildings after school. I learned so much in that class, and one thing always stuck with me. He said, “If the economy gets bad and people have to close their office, they still need a place to live and will work out of their home, whether it’s a house or an apartment.” While my attorney friend had some struggles renting his retail spaces when the economy was tough, I never had a problem renting apartments.

Look around and see who you associate with. Are they were you want to be, or where you are?
If you know of some people who are where you want to be, spend more time with them and the people that they know.

And here is another quote from Warren Buffet:
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”

For a free copy of my best selling, award winning book, Wealth On Any Income, log onto , enter your name and email address and press the button that says “Click here for your free book.”