Jim Randel's Blog

10 Questions To Ask Before You Borrow Money

Jim Randel (RAND Media Co) — Mon, 23 Aug 2010 11:30:04 -0700

Whether you're getting a credit card, a loan or a mortgage, you need to understand several general points about borrowing money.

Don't sign anything until you answer these 10 questions:

1. How much is the loan?
Seems silly, I know, but make sure you understand exactly how much you owe. For credit cards, what is your maximum debt exposure?

2. How can my debt increase?
Here's a trip wire. When you're late or miss payments, interest and fees will accumulate on top of what you already owe. Understand how your loan balance can grow.

3. How long do I have to repay, and what happens if I need more time?
What's the duration of your loan? What happens if you can't pay by the due date?

4. What's the interest rate?
How and when can it change? Is your interest rate fixed for some period of time - no matter what? Or will it change if some standard rate (such as the prime rate) goes up or down?

5. What happens to the interest rate if I miss a payment?
Another explosive device. Credit card companies get rich when you miss payments because default rates kick in – sometimes doubling your initial rate.

6. What is my monthly payment?
Many loans have a regular schedule of fixed payments. These are known as 'amortizing loans,' meaning the loan pays itself off over time. Understand how and when you are required to make principal payments.

7. What additional fees might I accrue?
Before you take a mortgage loan, understand all the other fees you will pay at the loan closing. Laws about Good Faith Estimates require you to get advance warning. Credit cards issuers are notorious for charging outrageous late or over-the-limit fees.

8. Can my loan be accelerated?
What if your loan has a set duration – say, five years – and you miss a payment? May the lender sue you for the total amount due?
This is a actually trick question because the answer is almost always YES. If you miss a payment (or do something else wrong), the lender can always say, "I want all my money back NOW!"

9. Are there any prepayment penalties?
Although not as common today, prepayment penalties will sneak back whenever lenders have a slight opening to do so. A prepayment penalty means you have to repay the lender his or her money - plus a fee for doing so. Talk about adding insult to injury!

10. Are you a nice person?
Just kidding! But I do want to make a point: Lenders are not on your side.

They live to take money out of your pocket in exchange for putting money into your pocket. The rub is they want to take out more than they put in. You must understand that.

Of course, these ten questions will lead to more questions. Which is a good thing, trust me. Keep asking until you understand the danger areas of the prospective loan. Pester the lender with as many questions as you need to understand how your loan works.

Do NOT Read The Fine Print

Jim Randel (RAND Media Co) — Fri, 20 Aug 2010 14:16:36 -0700

Whether it's a credit card, a car loan, or a mortgage, every advice monger gives the same worthless advice: "Be sure to read the fine print."

This is a dumb suggestion. Unless you're a law professor - or have nothing else to do for the rest of your life - the fine print will always win. In fact, it is supposed to.

By design, fine print is not meant to be read. Although the font is rarely smaller these days, the important stuff is always deliberately confusing.

People who craft the fine print know what they're doing. They obfuscate. That is their job.

They use long sentences, convoluted phrases and unfamiliar concepts to purposely confuse the reader. Well, that's easy. I could have been a fine-print master.

The goal is not only to confuse but also to dissuade people from reading. Fine print authors presume that 90 percent of readers will eventually stop reading ridiculous verbiage. And they're right. Most people just give up.

This policy of creating breakage - when people quit reading a memo or filing a complaint - is common in many consumer situations. For example, health insurers make reimbursement forms hard to understand so that some percentage of people just won't bother.

So forget the fine print. Here's my advice instead.

Speak to someone at the credit card issuer, the car dealer or the mortgage lender. Tell him or her you have 10 questions, and you want to record the answers for "quality assurance."

Don't quit until you get those answers on tape. By the way, recorded answers will generally stand up in court.

Negotiating Tip: Consider The Alternative

Jim Randel (RAND Media Co) — Wed, 18 Aug 2010 10:48:40 -0700

I've done real estate transactions for 25 years - as an attorney, broker and principal. And there is one negotiating mistake that I have seen over and over: People negotiating with the wrong party.

A common negotiation is between the seller and buyer of a house. The seller wants to sell his house, and the buyer want to buy a house (notice: 'a house,' not 'the house').

Hypothetically, let's say the seller asks for $1 million, but is willing to accept $950,000. The buyer offers $900,000. The seller counters with $975,000. The game is on.

Ninety percent of sellers make the following mistake: the universe shrinks to just this prospective buyer. The seller (for no good reason) believes that since the buyer offered $900,000, he's willing to go to $950,000.

From this point on, the seller is negotiating with the wrong party.

To win, the seller should consider the next buyer.

In a negotiation, each person must consider the possibility that the other party may walk away. What is the alternative? Roger Fisher and William Ury write about this in their best-selling book, Getting to Yes (Penguin, 1981).

"What is your BATNA – your Best Alternative to a Negotiated Agreement?"
In other words, what is the seller's position if the original buyer goes away?

Will there be another buyer at that price? Or will it be lower? Will something else materialize soon? Or will it come along in several months or more?

Our hypothetical seller should analyze the $900,000 offer against what would happen if the negotiation dissolved altogether for any reason.

Few people think of a negotiation that way. Most make it a personal battle with the other party. It becomes a game of chess - or will. This is a mistake.

I cannot count the number of times my client – seller, buyer, landlord or tenant - has said: "Jim, tell them my offer is $X. If they don't want it, they can go pound sand."

So I tell the other party, "It's $X or go pound sand."

And the other party goes and pounds sand.

Two days later, my client will call: "So where's the offer?"

"He chose to pound sand," I explain.

"Gee, I wasn't serious," my client responds. "See if he will meet me in the middle."

But, it's too late.

The Lowest Life Form: Those Who Prey On Dreams

Jim Randel (RAND Media Co) — Fri, 13 Aug 2010 11:46:25 -0700

Like many other baby boomers, I dreamed of getting rich - and quickly.

Growing up when real estate investing was the thing, I read every book by every guru I could get my hands on. I subscribed to their newsletters. (I would have bought CDs and DVDs but they weren’t popular yet.) I figured it was only a matter of time before I was driving my own Cadillac (the car of choice in the '70s).

I did everything the real estate books said. But I didn't get rich. In fact, I almost lost everything.

Fortunately, I stayed the course. I learned through real-world setbacks and experiences and finally became a proficient real estate investor and developer.

Today, I hate real estate promoters, late-night infomercials, and get-rich-quick events.

I hate people and organizations who prey on people's dreams.

We all dream - whether to be rich, good-looking or famous. But the process is hard work, a steep climb to success. By definition winners are those who work harder, persist longer, and commit more than anyone else.

But the 'quickers' - who sell instant, pain-free whatever - want to confuse. They want you to believe if you just buy their product or attend their event, you'll have access to a short-cut, a secret and an easier route to your dreams.

These people are the lowest of the low.

People dream – that is human nature. Dreams keep people going because dreams are fueled by hope. I want to be a source of guidance to dreamers. I want to help people understand the REAL real estate business so they can make good decisions.

To those who ply on dreams, you are dirt.

You take advantage of people where they are most vulnerable. You target people trying to lift themselves up and improve their lives. You sell crap because it is easy - people want to believe there is a better way. You see people in need and decide to push sugar water.

Please just go away.

Creativity And Lateral Thinking

Jim Randel (RAND Media Co) — Tue, 03 Aug 2010 15:12:20 -0700

Most of us think vertically. As if climbing a ladder, we jump from A to B, then B to C, and so on. Each step is within reach and connects to the next one.

But creative thinking isn't vertical. Experts use the phrase "lateral thinking" to describe provocative, disruptive thinking. To extend the ladder metaphor, it's like taking a step sideways.

Lateral thinking shakes the order of things. When faced with a problem, lateral thinking discards the rules, the assumptions and the limitations.

OK, now do you have a solution? Can you craft this idea backwards to fit it within your environment?

Humor is about lateral thinking. A good joke disrupts the normal pattern, the expected outcome. The disruption makes us smile.

Yesterday a buddy told me about a criminal trial in a nearby city. The defendant is accused of drug dealing, and the defendant's lawyer was just awful. His defense:

"If my client were a major drug dealer, would he have a lawyer like me?"

The Entrepreneur's Number One Frustration

Jim Randel (RAND Media Co) — Thu, 15 Jul 2010 12:03:55 -0700

Ok, so you finally decide to flex your entrepreneurial muscles, and - lo and behold - you invent a better mousetrap.

It vaporizes mice – no muss, no fuss. No cheese needed, no snappy sounds - nothing. Any mice in your house simply cease to exist.

"I'm going to be so rich," you say. "HOORAY!"

Unfortunately, you don't have the money to market or promote your new device. No problem, though, you're willing to share the spoils. So you present your brainchild to the largest mousetrap company in the world - Mice, Incorporated.

They agree to a meeting, and before you know it, you're in the room with the product design guy, the legal guy and the VP of R&D. You're excited. You can feel the money in your pocket already.

The product design guy is working on his own mousetrap, though. He sees your device as a threat to his job.

The legal guy thinks more studies should be conducted. Where exactly do the mice vapors go? Do the mice suffer? Is there a potential class action in the offing?

The VP of R&D is two years from retirement and a pension. Your device does look interesting (amazing, in fact) but he doesn't want to move too fast. It could backfire – though, he can't imagine how – and he really should just keep his head down for the next 24 months.

"Sorry," the Mice Men say. "Come back when it is a little more developed."

Of course, they're just putting their own agendas ahead of their company's. They are playing the corporate equivalent of "kick the can down the road" while they cash another paycheck.

Of course, not every corporate guy or gal is like the Mice Men. But far too many are. As every entrepreneur who has tried to present a new idea to a corporation knows, plenty of people just keep their head down.

Ultimately, the entrepreneur has to find the money or contacts or persistence to make the product himself. That is the story of Microsoft, Apple and Google.

What's your story?

Why Honesty is The Best Policy

Jim Randel (RAND Media Co) — Mon, 12 Jul 2010 11:20:38 -0700

"Oh! What a tangled web we weave
When first we practice to deceive."
- Sir Walter Scott

Some people think they’re so smart. As if their trickery and manipulation will never catch up them. Eventually, though, these people always end up caught in their own web of lies.

Here are four reasons why honesty is the best policy, other than because your mother says so:

1. Deceit is transparent.
Most people can sense when a person is coloring the truth. Artifice often backfires.

2. You may fool someone once, but you can never fool her twice.
Also, people talk, but angry customers shout from the rooftops. If you develop a reputation for trickiness, you'll never achieve your maximum potential.

3. It takes more energy to lie than to be honest.
Ultimately, success is about applying your limited energy in the right places. It takes creativity to be a good liar. Use that creativity and energy to make a better (and more genuine) pitch.

4. Karma.

I can't explain it. I have no scientific basis for it. I just believe in it.

If you cheat people, bad things will happen to you.

Playing Badminton with Paul Newman

Jim Randel (RAND Media Co) — Tue, 06 Jul 2010 13:46:50 -0700

About ten years ago, a buddy calls to ask if I had ever played badminton.

"Yes, about twenty years ago," I replied.

"Perfect," he said. "Can you meet at the Y tomorrow at noon for a doubles game?"

Next day, I'm staring at Paul Newman across the net. He and my buddy played doubles every week, but this time their fourth was ill. I was now the fourth.

OK, so I was pretty excited. I loved Cool Hand Luke, and Butch Cassidy and The Hustler. And the guy was still pretty good looking and very fit. But I figured I could hold my own. I was twenty years his junior, and after all, it's badminton – how hard can it be?

Five minutes later, I found out as Newman smacked me in the head with the birdie. I got angry. So I tried harder – dumb mistake. Badminton is about grace and timing and placement, so he just kept smacking me again and again (with a sly little grin).

I went home bruised – both physically and metaphorically. Even a little dejected about myself. Newman was good at everything – acting, business, car racing, and even badminton.

But I had to work hard at everything I did. Nothing came easy to me as it apparently did for Newman. I lost a little hope that I might ever achieve my own goals. Perhaps some people are just naturally good at whatever they do. I just knew I certainly wasn't one of them.

Newman died in the fall of 2008. A lot was written at the time, and I read quite a bit, including an interview he gave shortly before he died:

"Nothing ever came easy to me," he said.

Wow. Perhaps I was wrong. Perhaps even Paul Newman had to work hard at whatever he did.

So I learned a valuable lesson: Never measure your own efforts against others. In taking on a challenge, give it all YOU have. Don't presume things come easier for others.

When you pull back the curtain, success stories are almost always about a persistent, hard-working stiff like you and me (only, in this case, with really nice blue eyes).

Invisibility Hurts. Fight It.

Jim Randel (RAND Media Co) — Wed, 23 Jun 2010 09:50:48 -0700

Do you ever feel you've got something important to say, but no one is listening?

Have you written a book, a poem or a screenplay that no one has read? Have you painted or sculpted or composed, but so far you've only been able to impress your closest friends and family?

The longer this goes on, the more frustrated you become.

You read what others have written. You look at other creative works in your field. Of course, they're all well done, but not that different from your own.

Why are some people recognized, but not you?

Sometimes the answer is luck. Sometimes longevity. Sometimes they're just at the right place at the right time.

Let me tell you a story that may inspire you.

When Albert Einstein was a young man, he worked in a patent office reviewing patent applications. He was a low-level clerk, but nevertheless he was always reading and studying and thinking. In his off-hours, he wrote three papers about time, space and light.

He submitted them to several scientific associations - the important ones that decided who became published and famous.

"Be serious," the judges reacted. "These are from a low-level clerk in a patent office. Nothing much of value here."

It wasn't the only bad luck Einstein had run into. He was turned down for promotion as a mid-level patent clerk and rejected for an opening as a high school science teacher.

Several years later, people finally began to realize that Einstein's three papers had answered some of the most important scientific issues of the last few centuries.

The lesson: Keep at it.

Keep producing excellent work. Keep promoting it. Never lose hope.

There are no guarantees in life, but one thing for sure. Those who give up are no different than those who never started. The only cure for invisibility is a determination that can't be defeated.

A Life-Changing Strategy

Jim Randel (RAND Media Co) — Mon, 17 May 2010 13:41:13 -0700

I am speaking tomorrow morning in Trumbull, Connecticut. The theme of my speech is the need to create in your routine some activity that can lead to a life-changing event. I have studied successful people for thirty years and concluded that very few of them are uniquely intelligent, talented, good-looking or even lucky. Rather, they are for the most part people who identified something they felt strongly about, and then took off after it with all they had. My belief is that everyone has some kind of greatness inside of him or her. Maybe it’s an instinct for computers … or cars. Writing or welding. Athletics or animals. Something that one is innately good at and passionate about. Highly successful people identified their area of greatness and then went for it. For most of us, life gets in the way of a full-hearted pursuit of individual greatness. The need to make a living … the hours needed to be a good parent, spouse or friend … inertia – that hugely powerful force that keeps us doing today that which we did yesterday. My speech tomorrow morning is about establishing a connection with one’s potential greatness. I am going to suggest that people take a risk – pull time, energy and even capital from some other part of their life and use it to pursue an activity that could be a life-changer. Write a book or a screenplay. Build a better mousetrap or, a better mouse. Design some jewelry or clothing. Start an online business. Something that could take off and lead to a whole new adventure and level of financial recognition. There are of course no guarantees. And the result of all the effort may be nothing more than fatigue, frustration and loss of money. But, hey, that’s what the risk side of the equation is all about. And everyone knows “no risk, no reward.” One of my favorite authors is Victor Frankl, a physician who spent 4 years in a Nazi concentration camp. Here are Frankl’s words, which I interpret as support of my premise for finding ways to shake things up:

“Mental health is based on a certain degree of tension, the tension between what one has already achieved and what one still ought to accomplish, or the gap between what one is and what one should become. Such a tension in inherent in the human being and therefore is indispensable to mental well-being. … I consider it a dangerous misconception of mental hygiene to assume that what man needs in the first place is equilibrium or, as it is called in biology, ‘homestasis,’ i.e., a tensionless state. What man actually needs is not a tensionless state but rather the striving and struggling for a worthwhile goal, a freely chosen task.”

Man’s Search for Meaning

Jim Randel is the founder of the award winning Skinny On™ book series. See www.theskinnyon.com.

The Ten Most Powerful Financial Truths in the Universe

Jim Randel (RAND Media Co) — Mon, 10 May 2010 16:47:08 -0700

In preparation for a speech I am giving tomorrow night, I have identified the most powerful financial principles in the Universe:

1. Compound Interest – identified by Einstein as “the most powerful force in the Universe.” More so than nuclear fission, I guess. Understanding how compounding works is critical to both wealth generation and, avoiding debt.

2. The Difference between Pre and Post-Tax Income – it is very hard to accumulate wealth by focusing on only pre-tax income.

3. Never Invest unless You Understand How it Works – perhaps hindsight is 20-20 but no clear-headed analysis would ever had led to an investment with Bernie Madoff.

4. 62.8% of Financial Products are Designed for the Seller, not the Buyer – of course the number is made up but too many financial products are designed by marketers. I submit as evidence the creative mortgage products that caused so much heartache in the last few years.

5. Always Add Value to YOU, INC. – there are no safe jobs anymore. Do everything you can do make yourself as valuable as possible.

6. It’s 10 Times Easier to Spend Than Save, 20 Times Easier to Spend Than Earn – we are deluged with thousands of financial inducements every day – 99% of which are pushing purchases. It’s no coincidence that credit cards are so small and thin – easy to whip out of your wallet.

7. What Goes Up Will Go Down – I submit the Housing Crisis into evidence.

8. Passive Income is Freedom – the goal is to produce investments and assets that make you money when you are sleeping.

9. Entrepreneurism is all Powerful – spend some percentage of your time and capital seeking life-changing returns… risk has a tendency to bring focus.

10. Passion is Paramount – no one ever got wealthy spending their days watching the clock. Find something you love doing and then do it with all your might. The wealth will follow.

Jim Randel is the founder of the award-winning Skinny On™ series of books and content. For more information see www.theskinnyon.com

It’s Supposed to be Hard

Jim Randel (RAND Media Co) — Tue, 04 May 2010 15:05:10 -0700

Last week I gave a speech entitled “The Life and Times of an Entrepreneur.” In preparing for this speech, I reviewed all of my prior readings and writings on the subject. I wanted to give the audience my conclusions (30 years as an entrepreneur) in a clear and simplified presentation.

Here are my top three conclusions:

1. Everyone should devote some portion of their life to entrepreneurism – a calculated, roll-up-your sleeves effort that risks time, energy and/or capital in an effort to make a quantum leap forward. This effort does not have to be full time. Part time is fine – writing a book, designing jewelry or clothing, starting an online business – something that could be life-changing.

2. The single most important reason people underperform their potential is a disconnect between one’s passion and profession. No matter how hard one tries, there can be no great success when a gap exists between a true, heart-felt passion and, a business week filled with something else.

3. The second most important reason people underperform their potential is because they underestimate how hard it is to succeed. People start off on an idea, a venture or a dream with all good intentions. But, when they hit roadblock after roadblock, they falter – not understanding that this is all part of the game. It is for that reason I spent a lot of time in my presentation addressing the difficulties of being an entrepreneur. My goal was to give budding entrepreneurs an accurate road map so that they would be well prepared for the journey – and, less likely to fall off the path.

I am the father of four young adults.. When they were children, my wife and I struggled with how to prepare them for a challenging world. She felt that it was important to give them lots of encouragement – build their self-esteem. I felt it was important to mix in a lot of “it’s hard out there” type content – preparing them for the difficulties ahead.

I found myself giving this same kind of content to the prospective entrepreneurs. It is what I believe. It is what I have seen work.

I hope that I was not too heavy handed.

Jim Randel is the founder of the award-winning Skinny On™ series of books and content. For more information see www.theskinnyon.com

Playing Whack-A-Mole with the Regulators

Jim Randel (RAND Media Co) — Wed, 28 Apr 2010 12:15:23 -0700

As Congress contemplates how to sculpt the next phase of regulations to prevent overaggressive or unethical conduct in the financial world, we need to ask a basic question. Can the regulators ever keep up?

It is my feeling that whereas of course well-crafted regulations administered by nimble regulators can make a difference, they can never anticipate or prevent all the schemers. There will always be creative types willing to trade fair play for great pay.

That is why consumers need to educate themselves.

Consumers must be the front line in the fight against unethical and illegal conduct intended to remove money from their wallets. Consumers need to be helped by a national commitment to financial literacy. For example, it is a shame that our high schools and colleges do not require courses that educate young adults about mortgages, credit cards, debt instruments, budgeting and investing.

In my view, we will never be able to regulate away all the potential bad conduct. Although we have to try, we also must devote an equivalent amount of energy and capital to raising the financial literacy of our young adults.

Jim Randel is the founder of award-winning Skinny On™ book series, unique explanations of important financial topics. See www.theskinnyon.com

Big Ears, Big Eyes, Small Mouth

Jim Randel (RAND Media Co) — Tue, 27 Apr 2010 09:34:53 -0700

I did a lot of research in writing The Skinny on the Art of Persuasion: How to Move Minds.

One of my takeaways from all the research is the importance of keeping still – training yourself to watch and listen to the person across the table, the person you are trying to persuade.

With time you can develop your senses to pick up on both verbal and non-verbal clues. If you want to learn more about reading body language, I recommend The Definitive Book of Body Language by Allan and Barbara Pease (Bantam, 2006).

But, even without these skills, you can increase your persuasiveness exponentially if you just learn to be a good listener.

Either consciously or unconsciously, most people will tell you what’s on their mind – if you let them! A person who can control his/her instinct to talk and really, really listen will maximize his/her chances for a successful persuasion.

Listening should be so darn easy. But, many of us have trouble with it. Some of us are uncomfortable with silence (gaps in the conversation). Others among us spend too much energy thinking about what we are going to say when it’s our turn to speak – instead of listening with every fiber in our bodies to what the other person is saying. As a result, far too many of us miss opportunities to consummate a successful persuasion.

“Unfortunately, few people are good listeners. Even at the purely informational level, researchers claim that 75% of oral communication is ignored, misunderstood or quickly forgotten. Rarer still is the ability to listen for the deepest meanings in what people say. How devastating, but how common, to talk with someone about subjects of intense interest to oneself only to experience the stifling realization that the other person was not really listening….”

People Skills, Robert Bolton (Touchstone Books, 1979)

Great persuaders are great listeners. If you want to get into someone’s head, sometimes all you have to do is follow the trail established by the words and signals coming from the other person.

Jim Randel is the founder of The Skinny On book series – what many people are calling “unique reading experiences.” The Skinny on Networking will be available in July 2010.

Give People a Reason

Jim Randel (RAND Media Co) — Mon, 19 Apr 2010 12:55:35 -0700

As I finish writing The Skinny on Networking and reading everything I can find on the subject, I note that the two general principles of networking are discussed by everyone:

1. The more people you know the better, and
2. The more diverse the people you know you, the better.

What is not addressed, however, is the topic of today’s entry: how to persuade someone to actually help you.

All of the literature on networking presumes that your contacts are going to help you. The assumption is that if you have social capital with another person – usually a sense of reciprocity for acts you have done for him/her – that person is going to respond favorably to your request. I suggest an alternative way of thinking:

Your family and very closest friends are going to help if they can. But, 95% of your network needs a reason to help. In other words, they need to know what’s in it for them.

Now, I know how cynical this sounds. I know that the premise is that we all help each other when we can. But, if you take that attitude into your requests of others, you may be making a mistake.

First, you can never accurately value your social capital with another. You may think that acts or favors you did for another have significant value – but the other may not.

Second, you can never accurately assess the cost to the other of what you request. You may know, for example, that one of your contacts is friendly with a big shot you want to meet. You may therefore think to yourself “what’s the big deal for her to introduce me to the big shot?” The problem is that you don’t know the dynamic between she and the big shot. Their friendship may weaken if she is continually asking things of the big shot.

So, my attitude when I ask someone a favor is:

1. I don’t presume enough social capital, and
2. I presume that whatever I am asking is a big deal for the other person.

Note that I still ask. It’s just that I always try to tag my request with any or all of the following:

1. A statement of appreciation,
2. A suggestion of how I might be able to return the favor,
3. An acknowledgement of the principle of reciprocity, and
4. An idea of how the help to me might also create value for the other.

It is unlikely that your contact will be offended by your statements. Therefore, I suggest my approach is the safer course; in other words, don’t make assumptions about your social capital with another nor the cost to the other of your request.

Jim Randel is the founder of The Skinny On book series – what many people are calling “unique reading experiences.” The Skinny on Networking will be available in July 2010.

Mittens in Miami?!?

Jim Randel (RAND Media Co) — Tue, 13 Apr 2010 13:44:16 -0700

I think the world is divided into two types of people – those who like air conditioning, and those who hate it. I’m in the latter group.
On a recent trip to Florida, I left New York on a cold rainy day. I wore several layers of clothing and couldn’t wait to start removing layers as I headed south.
The flight was no help of course. Airlines need to keep their flight attendants awake and alert (let alone the pilots) and so create a meat-locker environment – no release of layers on the plane.

OK, well I’m good with keeping pilots awake so I focus on reaching Miami. Picked up by a friend, I get in his car – or should I say refrigerated vehicle. Like most people who live year round in Florida, he believes that all enclosed spaces need to be cold to average the heat outside. So, if it’s 80 degrees outside, it needs to be 60 degrees inside – maintaining a pleasant 70-degree average. As a result, I add a layer to deal with the sting of cold air.
We finally get to the condominium where the lobby is actually colder than the car … something I didn’t think possible.
But soon I’ll be in the Miami sunshine.
Oops. My cell phone alarm goes off – a reminder that since my flight was delayed (a rant for another time), I have to meet a business associate across town for lunch in 30 minutes. I put on a nice pair of shorts and golf shirt. I jump in a cab … OH MY!! Immediately I long for the relative warmth of my friend’s car.

I get to the restaurant. And, yes, you guessed it… freezing cold. What’s more I seem to always find the one place to sit where the cold air is blowing directly on me. Although there is just one vent and it’s all the way across the room, I feel like some billiard player is working an incredible trick shot – the stream of cold air bounces off three walls and lands smack dab onto my head.
I order hot tea.

The point of this entry? I have none. I just wanted to rant for a change.

Jim Randel is the founder of The Skinny On book series – what many people are calling “unique reading experiences.” His latest book, The Skinny on the Art of Persuasion, will be released in one week. Early reviews are outstanding.

Pushing Your Comfort Zone

Jim Randel (RAND Media Co) — Tue, 06 Apr 2010 12:32:20 -0700

When I started writing a book about networking (The Skinny on Networking), I did not realize that one of the main themes would be the subject of comfort zones.

We all know that networks are important. We all know that our value in business depends in part on the extent of our network. And, by the way, many studies show that health, happiness and longevity are directly correlated to one’s network. What we don’t always think about, however, is that the power of a network is less about its size, and more about its diversity.

Do you recall when people were citing Kevin Bacon as the “center of the universe” – the six degrees of separation thing. Well, actually there are people who have studied Kevin Bacon’s network. The study sets Kevin Bacon up at the center of a circle (web). Anyone who worked on a movie with him is given a number 1. Then, anyone who worked on a movie with someone who had worked on a movie with Kevin Bacon is a 2, and so on. What the study showed is that about 400,000 movie people are within six steps of Kevin. That’s a lot. And the reason? Well, it’s not because Kevin has made a lot of movies (which he has, but many actors have made more), it’s because of the diversity of the movies he has made.

Most people tend to congregate with people similar to them. And the people like them then generally associate with people like them and so on. As a result, the people you know, and the people who know the people you know (and so on) tend to double back on themselves (that is the small world phenomenon).

To be contrasted are those who extend themselves to people outside their comfort zone – in other words, to networks, associations, organizations, etc. populated by dissimilar folks (think Kevin Bacon making a lot of different types of movies). These are the people who have the most powerful networks because they are linked to a much wider cross section of individuals.

Reaching out to people who are not like us is sometimes hard. Especially as we get older, we lean to safety – we find comfort in people who look, act and think like we do. As a result, our circle of connections and links is constrained. And so, if you want a powerful, robust and helpful network, get out of your comfort zone. See everyone you come into contact with as someone you may want in your network – thereby giving you access to all the people in his/her network and so on. The result may be great benefits coming from unpredictable sources.

“Discomfort is good. Most people interpret discomfort as a warning sign telling them to avoid something. The opposite is true for networking. Discomfort is a sign that you are doing something right.”

Achieving Success Through Social Capital, Wayne Baker (Wiley, 2000)

Jim Randel is the founder of The Skinny On ™ book series. These books have now received more than 100 5-star reviews from hard-to-please Amazon reviewers.

Thinking Against the Grain

Jim Randel (RAND Media Co) — Mon, 29 Mar 2010 13:46:41 -0700

One of my goals with these entries is to introduce readers to new, well-written books.

One I read this weekend is The Big Short, by Michael Lewis. Lewis is the brilliant writer who has also penned, Liars Poker, The Blind Side, and Moneyball.

The Big Short is the story of a dozen men who made fortunes betting against the housing market during the years 2003 – 2007. Hence the name of the book: shorting a stock or financial instrument means betting it will drop in price. Having read the book, I now have a much better understanding of credit default swaps and synthetic collateralized debt obligations and can explain them in five sentences or less to anyone interested.

What was much more interesting to me, however, than the mechanics of how these men did what they did, was Lewis’ portrayal of the men themselves – almost all eccentric in one way or another.

One (Mike) was a loner who grew up with a glass eye who would not stop playing football in high school even though his eye would periodically pop out during games.

One (Vinny) was so distrustful of Wall Street he believed every trader was going to screw him. Here’s one vignette I loved:

Vinny: “So, tell me how you’re going to screw me on this trade.”

Trader: “Don’t be ridiculous, Vinny, no one is going to screw anyone.”

Vinny: “I just need to know. I’ll still do the trade. Just tell me how you’re going

to screw me.”

And the trader told him, and Vinny still did the trade.

One (Steve) was so hateful of Wall Street conformists he would buck the trend any way he could. At one golf outing he showed up in running shorts, sneakers and a t-shirt. When the other players told him he had to change, he went to the pro shop and bought a hoodie.

Mike, Vinny and Steve were nutty. So nutty in fact they became enormously wealthy by ignoring the party line of everyone on Wall Street who maintained that the housing market could never fall on a national level.

The lesson for all of us is that it sometimes takes a really hard head to buck the masses – to think against the grain. But, those who are right, those are the ones who reap the rewards of a society that moves in herds.

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

-George Bernard Shaw

Jim Randel is the founder of The Skinny On book series – what many people are calling “unique reading experiences.” His latest book, The Skinny on the Art of Persuasion, will be released in one week. Early reviews are outstanding.

Networking: Careful use of Social Capital

Jim Randel (RAND Media Co) — Mon, 22 Mar 2010 13:10:12 -0700

I am currently writing a new book, The Skinny on Networking, and in preparation, I am reading every book I can find on the subject. One of the best is Keith Ferrazzi’s, Never Eat Alone.
Ferrazzi’s premise is that the way to build a network is to help everyone you can achieve their goals. In this way you create a group of people who are then going to want to help you. While that general idea is hard to dispute, I think he misses the mark when it comes to a use of social capital.

Here’s a set-up from his book:

Ferrazzi wants to meet an important person in the entertainment world. Ferrazzi finds out that someone he knows (but barely) is friendly with this entertainment VIP. He asks the guy he knows to make an introduction. The guy refuses, telling Ferrazzi:

“Look, I only have so many favors I can ask this guy. I am not going to use one of those asking him to meet with you… I need to preserve my favors.”

Ferrazzi is not happy. He feels the guy he knew should have reached out to the VIP and made an introduction. I disagree.

I am all for helping people and agree with the general premise that this policy can help build a large network. But, I also feel that there are times when you must preserve your social capital.

Social capital is what you earn after you show people that you are honorable and trustworthy … and deserving of their friendship. Social capital is hard to come by and should be expended judiciously.

The guy Ferrazzi asked for help said “no” because he wanted to preserve his social capital with the entertainment VIP. Was this wrong? I don’t think so.

Lots of people were trying to get to the VIP. Ferrazzi barely knew the guy he asked to make the introduction. How about building up a little social capital with him first? What’s more the guy who said “no,” was protective of his friend (the VIP). He was not going to make an introduction for everyone who asked – that was not fair to his VIP friend. And, finally, I do believe we can only impose on our friends for so many favors before we begin to wear out our welcome. The guy saying “no” made a judgment that the introduction to Ferrazzi was one favor he did not wish to ask for… in my view, Ferrazzi should have walked away saying “thanks anyway, I understand.” Instead, he made the point in his book to explain how the guy saying “no” never had a successful career anyway – presumably because he didn’t help when asked.

Jim Randel is the founder of The Skinny On book series – what many people are calling “unique reading experiences.” His latest book, The Skinny on the Art of Persuasion, will be released in one week. Early reviews are outstanding.

Framing

Jim Randel (RAND Media Co) — Mon, 15 Mar 2010 12:05:37 -0700

My office is two miles from my house. There are two stoplights between house and office. For the first six months after moving into my new house, all I thought about was the great commute I had. Didn’t matter if I got behind a school bus or hit one or both of the stoplights.

By month #7, however, the school buses started to irritate me. I mean does the bus have to stop at every other driveway? Back in Ohio, when I grew up, the stops were at least one-half mile apart.

By month #12, I began to get frustrated by the first of the two stop lights. If I got caught at that light, then I would almost always hit the second light. I mean that makes no sense, does it? If the first light grabs you, the second light should be a free pass.

Pathetic isn’t it??

Somewhere along the way from month #1 to month #12, I lost my perspective. Instead of reminding myself every day that I had one of the shortest commutes of anyone in America (excepting home entrepreneurs), I started bemoaning the school bus traffic. And so on.

It was around this time that I started reading about Neuro-Linguistic Programming (NLP) and framing. Framing is most simply how you position situations, obligations or events to yourself. Oftentimes your reaction to events depends in large part on how you position them in your mind:

“If we perceive something as a liability, that’s the message we deliver to our brain. Then the brain produces states that make it a reality. If we change our frame of reference by looking at the same situation from a different point of view, we can change the way we respond in life.”

Unlimited Power, Anthony Robbins

Needless to say, I have stopped crabbing about getting caught behind school buses or hitting traffic lights. In this and many other more important ways, I have tried to develop an ability to frame events in a positive manner. I still have some work to do, however, because just this morning I yelled at the driver in front of me (talking on a cell phone) who caused me to catch that darned first traffic light.

Jim Randel is the founder of The Skinny On books. These books are winning the raves of customers around the United States. Here are some of the comments we’ve received: “eye candy for the brain” … “minimalist magic” … “a truly unique reading experience.”

Choking on Thought

Jim Randel (RAND Media Co) — Mon, 08 Mar 2010 12:58:32 -0800

Our brain is divided into two parts: the rational, analytical side. And, the instinctive, emotional side. For hundreds of years philosophers and scientists presumed that if we could just gain more control of our rational side (think Dr. Spock), our lives would be less chaotic and even happier.

But, there is a downside to allowing our rational side to dominate. Putting aside the issues of how uninteresting life might become, the fact is that there can be a human cost to thinking too much.

Anyone who has ever done a sport knows that, at times, you can outthink yourself. Sometimes instinct and reflex have to rule. In fact, psychologists who have studied “choking” -poor performance in critical situations – have concluded that the problem is over-thinking. Choking turns out to be the application of too much thought over instinct.

I recently read an excellent book, How People Decide, by Jonah Lehrer which analyzes how people balance logic and emotion in making decisions. In his chapter titled “Choking on Thought,” Lehrer writes:

“People believe that a decision that’s the result of rational deliberation will always be better than an impulsive decision. … The reality of the brain is that, sometimes, rationality can lead us astray.”

Lehrer and others make the point that in a world of overwhelming facts and figures – of too much information – our brains go “TILT” when we try to make sense of all the data. That is one reason experienced stock pickers are often outperformed by dart throwers. And why most mutual funds (whose decision makers you pay) are outperformed by the indexes.

The key to successful decision making can sometimes be the act of limiting the information you analyze. As Alvin Toffler wrote in the sixties in his ground-breaking book, Future Shock, the speed at which the world is changing and our attempts to keep up can cause our brains to overload. Or, as Lehrer says: “The human brain wasn’t designed to deal with a surfeit of data (as exists in our world today).”

What’s the upshot? Do your homework for a reasonable period of time and then, STOP. Trust your gut. Accept that there are no sure things, no perfect solutions. There are always risks of negative outcomes BUT more information and analysis does not always mean a higher likelihood of a good result.

I am not advocating against quiet time (last week’s point). Rather I am suggesting that we all put an outside line on our contemplation, our analysis, our efforts to find logic in the world – and then, well just jump.

Jim Randel is the founder of The Skinny On book series, and the author of The Skinny On Success: Why not You? & The Skinny On Willpower: How to Develop Self-Discipline. See www.TheSkinnyOn.com.

The Game is Won in Quiet

Jim Randel (RAND Media Co) — Mon, 01 Mar 2010 12:18:01 -0800

One of the biggest challenges we all face is the need to find quiet time. Time when we are reflective, not reactive. Time when we can calmly and dispassionately analyze all the facts we have and make decisions without pressure or tumult. Time when we can collect and prepare ourselves for the chaos right outside the door.

In my judgment, whatever activity we pursue, the quiet time is when the game is won.

Most of us are constantly fighting battles, putting out fires. We live from
emergency to emergency and rarely just sit back and THINK. There are two reasons:

1. Given the complexity and speed of a 21st century existence, the demands on our time and attention are off-the-charts. Every single day each of us is deluged with thousands of pulls and propositions – verbal, digital, in print. No matter how hard we run, we can never process all that comes at us. Still, we try – leaving little bandwidth for contemplation.

2. Reaction is easier than reflection. The thing about reaction is that the need creates the road map. When there is a problem with _____, we know we have to address ______.

Contrast the quiet time needed to analyze where you business (or life) is headed over say the next 12 months. Obviously that question requires serious contemplation which can be painful, difficult and at best guess-work. And so, we let urgencies take us over – because they do not usually require the same degree of introspection, analysis and extrapolation.

Next week I am giving a speech to Connecticut real estate professionals looking for guidance as to how to deal with a difficult market. Here are three points I will propose:

1. Ignore the pundits (a little ironic, I admit). No one knows for sure where the real estate market is headed – find strength in your own gut assessments.

2. Look for historical patterns – if “the past is prologue,” what were the lessons of the last such crisis period?

3. Force yourself to find quiet time for reflection and contemplation. When you strip away all the noise, where do you see glimmers of opportunity? Knowing that nothing is certain, what’s the most likely direction of the market in the next 12 months? What do you do to intersect with that direction … to get ahead of the curve?

I do not have a better sense of what is around the bend than the next person. BUT, what I do have is a commitment to thinking about it … to doing my best to find time to pull away from the stress, the confusion and the demands. Because I believe that ultimately, the game is won in those times of quiet reflection when we try to find a pattern in the fireworks.

Jim Randel is the founder of The Skinny On book series, and the author of The Skinny On Success: Why not You? & The Skinny On Willpower: How to Develop Self-Discipline. See www.TheSkinnyOn.com.

Bode Miller’s Comeback

Jim Randel (RAND Media Co) — Mon, 22 Feb 2010 10:57:56 -0800

Last night I watched the Olympics on TV. And I saw U.S. downhill skier Bode Miller win a gold medal. I had some faint recollection of Miller from the 2006 Olympics. I did some homework: although he entered those Olympics as America’s great male hope, he had a very poor week: no medals, two DNF’s (did not finish) and one disqualification.

In 2007 and 2008 Miller won some races, but in 2009 he had a dismal season – not winning one race. He did however make the U.S. Olympic team late in the year.

And now it’s 2010 and he has already won three medals – a bronze, silver and as of yesterday a gold.

At first I was thinking I would write this column about Miller’s amazing comeback. I mean he fell flat (no pun intended) in front of the whole world four years ago, and today he is standing on the podium with a gold medal. But then it occurred to me, no rational person would keep skiing if his motivation was to win an Olympic medal, let alone a gold medal. Rather, what I take from Miller’s success is that his gold medal was just the offshoot of a talented guy doing what he was passionate about.

I am friendly with a guy named Dwight Stones. Dwight, a high jumper, was a ten-time world record holder who never won a gold medal (he won two bronzes). When he was at the height of his career (1980), President Jimmy Carter would not allow the U.S. team to participate in the Olympics (being held in Moscow) because Russia had invaded Afghanistan.

Dwight was a huge favorite to win Olympic gold that year. He was the king of the high jump. But, no Olympics, no gold medal. Although bitterly disappointed, Dwight kept jumping.

Did he keep at it because he wanted another shot at Olympic gold? Well, that was in the back of his mind but no, that was not the driving force. I mean think about it: what if you could only really excel in your business or activity once every four years? What if your only real success was highly dependent on serendipity (no injuries or boycotts) and was decided in fractions of seconds (Bode Miller) or quarter inches (Dwight Stones)? What propelled Stones forward was his unadulterated love for what he was doing.

Hey, medals in whatever form the appear are great. But the real lesson from Bode Miller’s comeback is for me that the only way you ever stand on a podium is by finding something you really love doing, do it as well as you can, and then hope for the best. And if there is never an Olympic medal, so what? You’ve spent your life engaged in something you are passionate about … you’ve experienced the feeling of pushing yourself to the edges of your ability … and you’ve learned the strength that comes from accepting “what will be, will be.” That, to me, is what champions are all about.

Jim Randel is the founder of The Skinny On book series, and the author of The Skinny On Success: Why not You? & The Skinny On Willpower: How to Develop Self-Discipline. See www.TheSkinnyOn.com.

The Disconnect Between Promise and Delivery

Jim Randel (RAND Media Co) — Tue, 16 Feb 2010 11:44:32 -0800

In 2000 Jet Blue took to the air with its first flight. Founder David Neeleman, had a precise prescription for success: “The right mix of a strong business plan, an experienced management team, dedicated employees, a great product and service, service, service.”

In the last decade Jet Blue went from start-up to major carrier. Neeleman is out and outstanding customer service is no longer critical for survival.

While Jet Blue still touts itself as “#1 in customer satisfaction,” I am not sure what that means. Tried to change a Jet Blue flight online lately? How about print a boarding pass?

Last week I took a Jet Blue evening flight. My overhead light did not work and so I could not read. I asked the flight attendant if she could help. Her response: “yes … I can notify engineering when we land.” And she walked away. (There were no vacant seats.) How about a free drink? Or some kind of voucher? Not exactly outstanding customer service.

Perhaps Jet Blue knows exactly what it is doing. Perhaps because it is now a large airline customer service is less of a priority than cost cutting and profitability. I mean being #1 in customer satisfaction is not that big a deal when compared to all the other airlines. But, maybe they should tell the truth and say “we’re the least bad.”

I don’t mean to pick on Jet Blue. My bank advertises itself as “America’s most convenient.” Last week when I tried to send a wire, I needed to go to the bank and sit for 15 minutes while a trainee learned how to send wires. That’s convenience?

Here’s what I really care about: big companies who think they can fool people with clever marketing, need to just stop it. Stop telling the world you are the most this or the most that, and either actually do what you say you will or, and just tell people what you can realistically deliver on.

I happen to think Ryanair, an Irish airline, has the right idea. Their promise: “we will get you from Point A to Point B as cheaply as possible. If you want anything resembling customer service, go elsewhere.” Recently they were thinking of charging people to use the restrooms – not sure where that came out.

I think people will put up with anything if they are treated honestly. It is the gap between promise and delivery than can drive people nuts. And, unfortunately, when a company goes from entrepreneur to small to big, the gap sometimes becomes a chasm.

Jim Randel is the founder of The Skinny On book series. His latest book, The Skinny on Success: Why Not You? has been endorsed by a wide-range of business executives. The Skinny on Persuasion will be available in April 2010.