Welcome to Chez Cliff!

I received a check for $72,850!

As is my custom, I begin every day by taking a few minutes to myself in the morning.  Armed with my espresso, I open my mail, sort by category, and weed out the junk mail.

This morning, I saw that I had a letter from my lending bank.  It stated "IMPORTANT:  Information about your loan."  I was puzzled because I didn’t think my refi would go through until at least January.  I opened the large envelope and there was a check for $72,850 staring me in the face.

Rather than call my place of employment and scream "Screw you!  I’m going to Disney land!!", I decided to read on.

This letter was just another loan organization, trying to get me to rip into the equity of my house.  Amazing.  My lender’s name was printed on the outside of the envelope by prefaced with a "RE:".  Clever.  They write my name on the envelope, knowing that I just give it a cursery glance before opening it.

Based on the rates in which my area is going up in value, the loan company estimated that I would qualify for $72,850.  But, of course, I’d have to go through some kind of approval process.  But at a minimum, I’d get $20,000.  At a maximum, I’d get $200,000.

I received three ‘credit cards’ over the past month that would link directly into the equity of my house.  Like this loan, all I had to do was sign on the "dotted line" and I’d be on my way to spending heaven!!

All three of those cards wound up sharing the same fate:  My Shredder, the Monster!

It occurred to me, as I woke up the Monster, that this company must have had success with other people.  They were sending our mailers and that alone costs money.  I can’t drive 5 minutes on the freeway without seeing a billboard with the words "Broke?  Refinance now!"

"Feed me!" came the demonic growl of the Monster.

As my check for $72,850 was sadistically torn into thousands of unrecognizable pieces, I thought about the number of people that took that equity and bought a boat.  Or a car.  Or that trip to Europe.  I wonder how many people thought about taking their equity and buying a real asset?  I bet you the number of people that chose the last course are rare.

To each his own.

Burp!

Good boy.

Random Act:  Now you too can be a ninja.

In high school, I was visiting a aviation/aerospace university.  I wanted to be an "Aerospace Engineer" and I found this university through a mailer.  My parents indulged me with a trip to this school during the break.

We were taking a tour and were standing in the cafeteria.  Suddenly, students started piling out of the cafeteria and into the courtyard.  The tour guide told me that the Space Shuttle was taking off and the students were going outside to watch it.

The doors burst open in front of me as I went into the courtyard.  There, I could see what I considered to be one of the greatest achievements that man has ever done.  The Space Shuttle Discovery was sailing upwards and my imagination with it.

As I looked around at the other students, I realized that I had come home.  I was a lost space geek that had found his home among thousands of other space geeks.

Yep, I had found my college.

There is no doubt this directly impacted my success at getting my degree.  Being faced every day with other students who were just as jazzed as I was about space, it was impossible not to stay motivated.

Several years ago, I was asked to make a list.  This list was to contain the names of six people that I hang around with the most.  My list changed a few times because it was hard to gage which "six" I hung around with the most.  When my list was complete, I anxiously listened to what the speaker would say next.

"This list is your future."

That statement had a direct impact on me.

The people that you spend time with directly affect your future.

The people that were on this list were people that I respected a great deal.  However, they were all working in jobs that they hated.  The "lack of money" was typical for the conversation.  And negative attitudes abounded like crazy.  Everything was viewed with suspicion and fear.  No one did anything to
improve their situation because, for every idea, there were always 10
reasons not to do it.

I have long advocated that my attitude has a bearing on my future.  And I believe this to be typical of everyone.  On my list most of the people were rather negative in nature.  If you have ever tried to remain positive amongst a group of "negative" people, you can see that the positive person quickly becomes negative.  Or the positive person leaves the group.

My list of people that I spend time with has changed.  And it’s nice to know that it consists of people who are positive, helpful and rather successful at what they do.  They aren’t all "rich and wealthy" people.  They won’t be on Robin Leaches "Rich and Famous".  They wake up every day and do what they want to do.  This, I consider, to be successful.  This alone has done more for my self-esteem and ego than anything other "self-help book" could have done.

While I don’t discount someone just because they have an opinion contrary to mine, I do discount someone if everything they say projects negativity, fear or suspicion.  I lived in this environment a good portion of my life and I refuse to live in it now.

Today, I had a negative question tossed my way.  It completely deflated me.  After having a great couple of months, one person completely brought me down.  That pained me to the core of my soul.  You would think that after all this time, I would have a good grip on what’s going on around me.  In this blog, I write everything that is going on and everything that I’m feeling.  I write the good with the bad.  If this blog seems like nothing but "good news" then maybe that’s because that’s all there is in my life.  I don’t lay awake at night, wondering if I’m going to succeed.  I don’t cringe when bills come.  I don’t pass-out when the mortgage statement comes.  Actually I’m happy because that’s one less tedious activity I have to do.

But this person projected their doubts and fears on me.

The good news is that the feeling of "hurt" did not last but a couple of minutes.  Before long, I was focused on my list of tasks to complete and thinking about what was coming next.  And this got me excited and fired up.  Before long, I was back to my normal self.

Speaking of positive attitudes, I will say "Thanks!" to those emails I got about yesterday’s blog entry.  I don’t consider it to be my best writing but I do thank YOU not only for taking the time to read it but for letting me know that you enjoyed reading it.

he Year 1984:  I was in junior high when this movie called "The Last Starfighter" was released.  I was captivated by this film.  Absolutely captivated.

There’s a scene in the film that is permanently written on my memory.  The hero of the movie, Alex, became the reluctant hero from "present day" Earth to save the galaxy.  He was tricked by this alien, Centauri, into flying a space ship against 100’s of alien ships.  At the last minute, Alex changed his mind and Centauri brought him back to earth.  Centauri was disgusted with Alex for wimping out.

On earth, Alex was walking away from Centauri.  Alex was trying to justify why he couldn’t go into outer space and fight the aliens.

Alex:  Centauri, I can’t go out and save the galaxy!  I’m just a kid from a trailer park!
Centauri:  If that’s what you think then that’s all you’ll ever be.

Present Day:  "I can’t believe the size of this house!" Oakley Girl exclaimed.  "And this ocean view is incredible!"

"That’s why I picked this real estate agent," I said, staring out the 8 foot tall window.  My view of the ocean was unobstructed.  The moon shined brightly and it light up the Queen Mary.  "I wanted someone who has done what I want to do."

Saturday night was the real estate agent’s annual Christmas party.  Every year, he turns his house into a mini-Christmas wonderland and invites every single one of his clients.  When I received my invitation, I was ecstatic because this was going to be my chance to dress up.  And I just love to get dressed up!!

I look damn sexy in a tie.

I invited Engineer X and Oakley Girl to go with me.  Engineer X had already met the real estate agent but not Oakley Girl.  That was ok because the real estate agent loves everyone!

There were about 200 people there.  His house was completely covered with all kinds of Christmas decorations.  Everything was catered with servers bringing around some of the best stuff mushrooms I had ever tasted.  Yeah, this was going to be a good night.

Upon entering the main foyer, I saw my mentor sitting in a chair.  I was shocked!  I had introduced him to my real estate agent a month or so ago.  But I didn’t know that he was actually invited.  I hadn’t seen my mentor since before Thanksgiving.  Without hesitation I walked right up to him and shook his hand.

What was really touching was that he gave me a hard time because I hadn’t called him lately.  He was disappointed by that.  Me, I was flattered by this.  I normally don’t like to bug him because he is a busy man.  Every couple of minutes he can grant me, I take advantage of and I don’t ask for more.  But now he’s giving me a hard time because I’m not calling him?  Excellent!

The lady who did my loan was there.  Of course we talked about "business" . . . IE my refi.  In case you’re wondering, the lady who did my loan has many investment properties and is very well off as well.  Another good sign when looking for people to deal with.

My party and I, along with my mentor and his fiance, decided to take the 50 cent tour of the real estate agents house.  The house is 6,000 square feet and it’s two story.  We started our tour on the second floor.

The first room we entered was the master bedroom.  With an unobstructed view of the ocean, this "European style bedroom" just screamed of royalty.  The 8 foot tall fireplace was burning.  Large muriels hung from the walls.  This was definitely a great bedroom and would impress anyone.

We continued our tour through the balance of the house.  He has several guest rooms, a game room, exercise room . . . of course full size gourmet kitchen along with an outside patio area with swimming pool.  I guess no home in California is complete without a swimming pool.

The house was very impressive but the conversations were the most stimulating.  On the patio, I got to spend some great time with my mentor.  During our conversations with various people, he would always introduce me as "This is my partner Cliff.  He’s a real estate investor."  The first time he introduced me this way, I was slightly caught off guard.  Telling people that I’m a "Business Analyst" or an "Engineer" for my company has become second nature.

In talking with people about real estate investing, I was able to keep up with the best of them.  Obviously these people had become wealthy by working with the real estate agent.  But the fact that I could keep up with them impressed me to no end.  It is amazing what one is capable of doing.

Towards the end of the evening, I made a slight overture towards my mentor by saying "It was cool you introduced me as an real estate investor." 

He turned to me and said "Cliff, you are what you say you are.  If you keep saying that you’re an analyst or an engineer then that’s all you’ll ever be."

He’s right.

The entire purpose of writing this blog is to document my journey to the next level.  And Saturday night, I got a taste of that.  Not by impressing people with my knowledge of real estate or the fact that I actually own real estate.  It was that during those few hours I got to be the person who I wanted to be.  I was at that next level.  And I found the confidence to make it happen.  It had nothing to do with how much money was in the bank, what kind of car I was driving, or how many houses I owned.  It was my frame of mind that set the stage.  And I took advantage of every minute of it.

I was absolutely beaming when I left that party.  I couldn’t stop!  I’m surprised I didn’t get pulled over by the police for having this "plastic smile" plastered on my face.  I feel sorry for Engineer X and Oakley girl.  I babbled incessantly the entire ride back to my house.  But I couldn’t help it.

I had a taste.  And I’m hungry for more!

ROAR!

I was told that this would be a slow month.  With the holidays, people aren’t so quick to move.

On westsiderentals.com, I’ve had over 100 people view my ad for my house.  Only a hand full of phone calls.  No one has jumped on it.

I am hesitant to drop the price.  I know I can get the rent that I want for it.

I may have to take this to the next level.

It’s time for a few more bells and whistles.  And time to use craigslist.org to my advantage.

First off, let me say that whomever invented the idea of putting chocolate chips on coffee cake should be shot!  This piece of heaven is going to make me diabetic!!

Since I’m writing this blog about my business dealings, I’m going to share with you the first business venture I ever got involved with.  And what I learned from it.

The names have been changed to protect the incompetent.

"This can’t fail!  I already have a client!" Paul said to me over lunch one day.  I had been in California for only a year and was settling into my new job.  One day, in expressing my urge to make more money, Paul started hitting me up about this idea of being consultants.  At this time, everyone and their brother was starting their own consulting firm.  And because our ego’s were inflated beyond measure, we considered ourselves to be the best of the best.

"Let me get this straight.  We consult for a coffee company in Utah.  They fly us there, we work during the weekend, then we fly back and work our regular jobs." It sounded like the dream of a life time.  Being a high paid consultant and jetting around the US.  I imagined myself in front of the bikini-clad California women saying "Yeah, this weekend I’m jetting to Utah.  I’m consulting for this big coffee company."  And then the women would shower me with kisses and marriage proposals.

Hey, I can dream!

Paul continued with his sales pitch.  "Cliff, this is our chance to tell the man to go screw himself.  We won’t be working for anyone anymore.  We’ll be working for ourselves!"

With a customer already in the pipe, I smiled and said "Let’s do it."  Thus began my first venture into the world of entrepreneurship.

Sure enough, we were jetting off to Utah every other weekend.  From the moment we arrived until the moment we left, we busted our butts.  And we made all kinds of improvements, tweaks, etc.  From simple things like increasing production output to more complicated issues like managing the small work-force.   We definitely had a measurable impact on the company.

The subject of a website came up.  One of the ideas that we launched was that this company would sell their product to the consumer as well as big corporations.  Why?  Profit margins on consumer products is significantly higher than thebulk selling to big corporations.

Since you never say "No" to a customer, I was elected to do the website.  I had the most experience with programming (I had taken one HTML class) so the role fell onto my shoulders.  This started the biggest mistake of my life.  To that point.

I remember the days, blurring into weeks, blurring into months while I worked on this website.  Every single iteration of the website was met with resistance, criticism, and ridicule.  After the fourth iteration was shot down, I announced that I refused to work on another version until all the players involved gave me an exact specification of what they wanted.

Paul, the president of our two man company, suggested that I take a break from working on the website.  We could get other clients for the time being.

And boy did we get them. 

You have to remember that this was at a time when the popular mentality had it that a business without a website wasn’t a business.  Our daily jobs let us have access to all kinds of "small business owner’s" who didn’t know anything about building websites.  Motorcycle specialists, museum volunteers, beauty products, customized golf clubs . . . you name it and we had access to it.

So they came.  They came and came and came.  I couldn’t keep up.  It seemed as if daily, I was meeting with a new customer.  Paul would find them and set me up to meet with them.  Then I’d gather their website requirements and I’d work on building the website.  The only problem was that the last two items never happened.  Why?  Paul was setting up so many meetings for me that I never had a chance to build any websites.

One day, I screamed that enough was enough.  It was time to take care of our current customers instead of bagging every single customer that came through the door.  Paul didn’t see it that way.  Every customer that we had was another notch in his belt.

Furthermore, it was I who was doing all the work.  Paul would find them but it was I who actually sat down, determined what they needed, negotiated the price, then built their website.

A month or so later, Paul announced that the coffee company was back on and that their website was top priority.  He had a partnership with the coffee company and instead of getting paid little by little, we were now going to get a chunk of the profits. 

I was extremely irritated.  I was in the middle of several websites and several negotiations at the time.  We were turning down money in exchange for a percentage of a company that was struggling as is.  Now I had to tell all these customers that we were going to leave them high and dry.  Why?  Paul wasn’t going to do it.  Someone had to.

The vice-president of the coffee company was not very happy with me.  He knew I was irritated by losing our paying customers.  He also knew that I was working pretty much solo.  Paul spent his evenings and weekends, chauffeuring his girlfriend around while I sat in the apartment and had a relationship with the computer.  But the VP didn’t care.  He wanted results.  He wanted his website.  Not another mutiny like last time.

Again, I refused to build their website until they told me exactly what they wanted.  My days of guessing were over.  Certainly I could program their website, give them all the bells and whistles.  But the content, the marketing, the advertising . . . the copyright . . . all were concepts beyond my reach.  Yet I was told that I would do them.

I once again refused.

The VP and I got into a pretty heated fight.  The last words he spoke to me were the last words of our fight.  "Cliff, I think you’re forgetting who you work for."  I realized that I had done nothing but exchange one version of hell for another.  And I wasn’t getting paid for it.

Without delay, I entered Paul’s office and said "I’m out." and left.

A year of my life had evaporated.  The last six months had disappeared in a maze of computer monitor light.  I discovered that the sun was still in the sky.  Imagine that!

While I like to believe that the President of any company doesn’t get his hands dirty, when in a smaller business he doesn’t have that option.  If the workers are clearly overstressed, this breeds nothing but contempt and resent for those that aren’t doing anything, including the CEO of a company.  Do you want to motivate your employees?  Get into the thick of it with them.  Let them know that they’re not alone.  Show an active interest in what they’re doing and if you can help then do it.

I also learned that taking care of customers is important.  Every economics professor will tell you that there’s some magical point out there where you customers go from being happy to being irritated because you cannot support them anymore under your current conditions.  And irritated customers don’t equate into repeat customers.

One question posed of me:  Why didn’t you hire more programmers?  At that time, programmers were commanding $80k plus salaries.  There was no way a programmer was going to work on our websites for what we were willing to pay.  The only way to get these small businesses was to negotiate reduced pricing.  The cost of labor in this case clearly outweighed any potential money coming in.  The results would have been disastrous.

Oh, and the "big money" I was making?  On a good weekend, I barely cleared $200.  With the 7 or so websites I got involved with, my cut was $1000 out of the $8000.  The last three months, not a dime.  And that was the most intense of my work schedule.  I was at 18 hours a day, seven days a week.  Yes, I was quite the machine.

In the end, what happened?  The coffee company went bust.  Come to find out, the President of the company was deliberately sabotaging it for the write-offs.  The consulting company survived several "rebirths" under various other ideas, none of which involved me.  Last I checked, it had evaporated because after three years of declaring losses, you get audited by the IRS.

End of story.