Michael Masterson's Blog

Cuba: Finally...Business May Start to Boom

2008-06-02T11:20:00.000-04:00

Raul Castro, Fidel's brother, is making changes in Cuba. He is lifting bans on buying electronics equipment, on buying and selling homes and cars, on using tourist hotels and is allowing open access to cellphones. Farmers are being allowed to till unused land for a profit. This is a move toward freeing up commercial markets.

It's just a few steps so far, but Raul just took office. If he continues, some economists say, it could spark an explosive growth in the Cuban economy. It's conceivable that it could grow the way China and Russia have been growing lately - which is to say 200 times faster than the U.S.
The New York Times recently said that Raul is following the Chinese model, where economic and commercial freedoms are allowed within a mantle of authoritarian political control. If that's so, that should be plenty of opportunity for enterprising foreigners who want to take advantage of the coming growth.

I spent a week in Cuba during the Carter administration, when travel bans were briefly lifted. I was impressed by how resourceful the Cubans were, how they loved their old American cars, how well they dressed their children, how busy the museums were and how well the different ethnicities seemed to get along. This is a culture that is begging for economic freedom, I thought back then. It looks like that freedom is finally underway. That means that in the next ten years there may be hundreds of million-dollar business opportunities for enterprising Cubans and foreigners who get in while the getting is good. The Chinese are already there and waiting. So too are many European businesses, which have been in Cuba since the U.S. pulled out. Getting in early will be nearly impossible for Americans because of the laws that restrict them from going there or doing business with them (talk about commercial freedom!) are lifted. File under Squashed Opportunities for Now.

Book Review: The Black Swan by Nassim Nicholas Taleb

2008-05-23T09:25:00.002-04:00

For Nassim Nicholas Taleb, a black swan is a social or economic or cultural event that has three characteristics:

1. It is unpredictable

2. It has a massive impact

3. It is explained as being predictable after it surprises everybody

Three things to say about Taleb:

Taleb appears to be a polymath

He has garnered lots of good reviews

He is more style than substance

One thing to remember about the book: Taleb's fundamental thesis - that the most important social or even personal events are unpredictable - is just plain wrong. The truth is that most progress occurs when people follow their experience-based instincts which are confirmed by facts. That's how science works. That's why wealthy people keep on getting wealthy.

Taleb's logic is this: If a great negative event, like 9/11, could have been predicted it would have been prevented. But the facts contradict Taleb's logic. Pearl Harbor was predicted. So, actually, was 9/11. So were all the stock market crashes he claims were unpredictable. Each of these events was foreseen by people using a combination of insight and common sense to draw conclusions about the future. But these people were ignored.

So the question is not why can't we predict "surprising major events" but why do we ignore warnings when they are given?

Taleb says, "What you don't know is far more relevant than what you do know," but this is just seductive poppycock. He cites two examples: September 11 and the "secret recipe to making a killing in the restaurant business." Of the former he says that had we known we would have prevented it; of the latter, "if it were known…then someone next door would have already come up with the idea and it would have become generic. The next killing in the restaurant industry needs to be an idea that is not easily conceived of by the current population of restaurateurs."

Again, reality refutes Taleb's theory: There are, in fact, secrets to running successful restaurants. People who run successful restaurant chains know them. How do you explain the fact that these chain restaurants are successful time and time again in all sorts of different markets? And, in fact, there are different secrets. There is one secret to run a successful Houston's and another to run a successful Applebee's and another to run a successful Don Schula's Steak House. There are universal secrets and particular ones. Each restaurateur knows them. That is why they continue to be successful.

This is not true of the person who opens one restaurant and succeeds. He may or may not understand the secrets he needs to know. So many people who own a single, successful restaurant fail when they try a second. Those people were lucky in their first success. But they don't disprove knowledge or the predictability of knowledge. They merely show what we already know: that sometimes people succeed out of sheer luck.

Redeeming Pleasures: Notwithstanding its critical weakness (that its theme is just plain wrong), the book does have some mitigating pleasures:

It is full of ideas - from every corner of the world of knowledge – and is thus stimulating and challenging, if you want to try to keep up with it.

He tells the story of Umberto Eco's 30,000-book library. When visitors saw it they reacted one of two ways. The great majority said, "Wow, Professor. What a library you have. How many of these books have you read?" A tiny minority got "the point that a library is not an ego-boosting tool but a research tool" and that "unread books are far more valuable than read books."

It is full of itself - the author is a snob but he likes being a snob and that is sort of infectious.

In mentioning Eco, he says, "Eco belongs to that small class of scholars who are encyclopedic, insightful and nondull."

Thoughts and Conclusions about Wealth

2008-05-19T09:30:00.000-04:00

Historically speaking there are three ways wealth was created: plundering, taxation and commerce. The first two involve force. Only the third operates freely.

In ETR Monday, I wrote about some of the wealth-building habits billionaires share. Habits anyone can develop. Here is some interesting background on five of the U.S.'s wealthiest:

1. John D. Rockefeller (1839 - 1937) was the wealthiest American who ever lived. He started off in the grocery business in Cleveland, sold his operation and went into the emerging industry of oil. Along with his partner, Henry Flagler, he started Standard Oil. His great success came from developing his business monopolistically by controlling the railroads, production and refinement as well as exploration. In today's dollars, Rockefeller was worth around $318 billion.

2. Andrew Carnegie (1835 -1919) began as a bobbin boy in a textile mill in Pennsylvania. He became rich by working his way up the iron and steel business in order to build railroads. He understood very early that the industrial revolution was going to change everything in America. He was quick to recognize that steel was a better product than iron and invested in steel. He put his steel company to work building railroads and then as the railroad expansion was coming to an end he started promoting and selling steel beams for city skyscrapers. In today's dollars, Carnegie was worth just shy of $300 billion.

3. Cornelius Vanderbilt (1794 -1877) built steamboats to ferry people and goods along rivers and the coastline of northeastern America. He was also a railroad builder and at one time owned the route between New York and Chicago. Like Rockefeller and Astor, Vanderbilt was skillful at controlling all the major aspects that affected his core business. He didn't want to be dependent on suppliers and so developed his own supply companies to control price and supply. His net worth in today's dollars would be nearly $170 billion.

4. John Jacob Astor (1763 -1848) was America's first millionaire. By today's standards he was worth $115 billion. He made his money as a trader - first of fur and then of liquor, opium, and tea - from the end of the American Revolution until the middle of the nineteenth century. His skill: he was a great investor in businesses, diversifying his interests and getting in and out of businesses when economics mandated.

5. Warren Buffett (1930), CEO of Berkshire Hathaway, made his money as a stock market investor. Just this year - with a net worth of about $62 billion - he surpassed Bill Gates as the richest person in the world. According to Forbes, Buffett filed his first tax return as a 13-year-old. He has since adhered to value investing principles, sticking with companies that have good fundamentals. That means he thinks in the long term and doesn't get caught up in the "hot" trend. In 1955, Buffett took over Berkshire Hathaway - originally a textile firm - and has built it into a major holding company with investments in insurance, food, jewelry, utilities, and more.

Impressions of Holland

2008-05-09T16:41:00.002-04:00

The first time I visited Amsterdam was in 1977, just after I had spent two years in Chad as a Peace Corps volunteer. I hadn't been there since. What impressions I had from my first trip were small: clean, orderly streets; handsome people; good food and the astonishing sight of ladies in underwear in the red light district.

Nothing I experienced on my most recent trip (just last month) contradicted those impressions: Amsterdam is one of the cleanest and most orderly in the world. The food, though not gourmet, is amenable to US tastes. The red light district is just as amazing as it ever was and a refutation to those who believe that prostitution demoralizes culture.

Other impressions:

The security system in the Amsterdam Airport is better than any in the USA. The screening goes on at the gates. There are one or two stations at each gate. This reduces waiting considerably and eliminates any chance of missing a flight because of security delays.

The security personnel are intelligent, dutiful and courteous. They view themselves as professionals. The US should fire all the hoodlums and misfits that populate our security checkpoints and replace them with workers from Holland.

Although the Dutch are famous for their chocolate you don't find much chocolate on the dessert menus.

The Dutch people are almost universally handsome but rarely beautiful. They are taller than North Americans. I have no idea why.

English is spoken as a second language in Amsterdam and throughout most of Holland. Dutch is a difficult language to grasp quickly. The sounds are different. The spelling is unusual. The vocabulary is unfamiliar

The Euro is the currency of Holland. That means that almost everything is comparatively expensive for US citizens today. What would cost $5 in America (a hamburger and coke, for example) would cost five Euros in Holland. Trouble is that five Euros equals nearly eight bucks.

If you convert all Euro-based prices into dollars you will not be able to buy anything. The pragmatic strategy is to pretend that the dollar has equal value (the way it used to) and spend accordingly.

Like everything else in Amsterdam the canals are relatively unpolluted. Traveling around in this city of canals is challenging at first - just as it is in Florence. But once you understand the layout you can get around quite easily - almost as easily as you can in Rome.

Using public restrooms in Holland is not the horrifying, health-threatening experience that it is in the US. Rest rooms are almost all regularly staffed by competent workers. Toilets were all very clean.

Walking down the city streets at night, you never feel in any danger. People are quieter and better behaved than they are in the US or England. The only noisy people we encountered were from England or America.

The Dutch economy seems stronger than the US economy. I saw no bums, no beggars and no one who seemed poor. A cab driver told me that the "regular" people don't live as well as the people of Amsterdam. A bartender told me there was a growing problem with immigrants from North Africa who are a drain on the economy. But I saw none of that. The local papers report that the Dutch economy is declining and that real estate prices are dropping. Talking to merchants it seemed clear that most tourism-related businesses (including taxies, hotels and most retail stores) are suffering because Americans are spending less. But generally speaking, Holland seemed better off than the US.

Amsterdam is a city of young people. The average age of age of the restaurant goers we saw was about 25. In New York it's more like 35. In Delray Beach it is older than that.

The history of Holland is informative. They became a major economic power in the second half of the 16th century. By the middle of the 17th century they were the world's biggest bankers and most successful international traders. The Dutch government was decentralized during this Golden era. Individual states were clustered in a federation through representatives but had a good deal of local power. Wars were fought mostly through private trading companies and mostly to secure economic interests in India and the New World. Eventually Spain and England came to dominate world trade, but the Dutch settled comfortably into a secondary but important position as merchant bankers and stockholders of international companies.

Although the Dutch covet personal economic, social, and personal freedom (which is why prostitution and drugs are legal) their culture is fundamentally conservative.

You can smoke pot or hash in coffee shops throughout Amsterdam. Despite the availability and legality of drug use, drug use seems relatively modest and there is no appearance of a drug problem in the city. You don't see addicts lying in door portals or in alleyways. You aren't accosted by them on street corners. If there are drug addicts in Holland, they aren't noticeable and don't appear to be bothering people. As with prostitution, Amsterdam proves that we have nothing to fear from making these vices (if they are vices) legal.

How Much Editing Is Needed? Is Publishing a Ready, Fire, Aim Endeavor?

2008-04-24T16:02:00.003-04:00

I sent a note to Charlie Byrne and Jason Holland about installing more layers of editing in ETR's books and courses.

Here's what ETR's editorial protocol for its daily e-zine looks like: Every essay and article is reviewed and critiqued at least twice: first by Charlie and Suzanne Richardson who look for weaknesses in the "big idea" and then by Judith Strauss who edits for style and usage. Sometimes Charlie asks for my thoughts as well.

But because we are pressed for time, we often do less editing when we publish books and courses. In fact, we need to do more.

This thought occurred to me recently. A few weeks ago, we published an essay on "my early morning routine," (which is meant to be a chapter of a new book I'm writing: How to Master Plan Your New Life. By Wednesday of that week, we had a half dozen letters from readers who had questions and objections to what I'd said. I answered those questions and we're running the responses in ETR. But I realized that we should also include the questions and answers in the book or emend that chapter to include them - or otherwise we will leave our book readers unsatisfied.

So I emailed a note to the editorial team, saying:

Guys: We should talk about the editorial process in general...there are two kinds of editing all our stuff should have...maybe three...

Draft 1: Critical review of the big idea by someone smart....and knowledgeable...maybe Charlie

Draft 2: Review for quality of content by an expert

Draft 2 or 3: CUBA review (Confusing, Unbelievable, Boring, Awkward)

Draft 3 or 4: Spelling, punctuation, grammar

Our products would benefit from a better editing system

Michael

It occurs to me that some people might look at what I'm doing and say: "By adding these extra layers of editing, you are going to make publishing too expensive and slow. You are the king of ready, fire, aim. Why are you advocating so much aiming?"

Fair question. I'm asking it of myself as I write this.

But I can think of two quick responses. First, at ETR our writing is our product. To stay ahead of the competition we have to continuously improve our products. There is no contradiction between ready, fire, aim and continuously improving products. In fact, I talk about the need for this continuous improvement in my book Ready, Fire, Aim.

Ready, fire, aim is about priorities and cash flow in starting and growing a small business. Incremental product augmentation is a perfectly compliant principle with ready, fire, aim.

That's one response. The other is this: In devising these extra editorial processes, we need to find a way to make them inexpensive and fast. Because when it comes to creative production, speed is a critical component. (Another principle explained in detail in Ready, Fire, Aim.)

I can think of ways of streamlining these procedures and making them less costly.

The first review focuses on the "lead" paragraphs of every chapter or lesson. That is, on the big idea. This could be done even before the chapter was written. Charlie could ask for a precis of each chapter be written - 200 words or so - that articulates the "big idea." He could review and comment on those very quickly - 15 minutes per chapter. By critiquing the big idea early - before the chapter/lesson is actually written, we reduce the amount of time it will take them to write each chapter/lesson.

The expert review could be shortened and made less expensive by sending out the chapter with a simple questionnaire: we could figure out three or four key questions that would identify whether anything big was wrong or missing.

The CUBA process - pinpointing copy that is confusing, unbelievable, boring, or awkward - is already efficient. (And this will be carefully explained in the book I'm doing on editing copy with Mike Palmer.)

The final editing process is already very efficient. Judith's job should be easier in the future because the editorial will be stronger.

These are my preliminary thoughts on the subject. Charlie and Jason will have their ideas. As will MaryEllen. At the end I'm sure we will come up with something that ensures that all ETR courses, programs, and books are better edited than anything else in the marketplace.

The Recession: How Long and How Strong?

2008-04-17T17:13:00.001-04:00

We were at a patisserie in Tribecca. It's me, AS (a restaurateur), JF and ES (executives with large companies), and AE (an attorney). We were talking about the recession, comparing it to other recent recessions.

"The last recession, in 2002, was relatively mild," AS pointed out.

"But that was before the real estate market fell apart," AE said.

"And before the dollar started tumbling," JF added.

"And before inflation reared its head," I said.

"When you think about all that it seems much more ominous. Yet even today in the newspapers half the articles I read were still asking the question: is there a recession at all?"

"It's crazy," I said.

"You can see it even in my restaurant," AS said. "My best customers are coming in less frequently. And overall the tabs are getting smaller."

"The cost of gasoline is making everything more expensive," JF said. "My company is having a tough time holding profit margins at respectable levels. It's getting tougher every day."

"It's inflation. It's debt. And it's the collapse of the dollar," I said. "A triple whammy. It will be hard to imagine that the recession won't get worse."

"I agree," ES said, "Yet nobody in the mainstream press seems too concerned. In fact, lots of people are saying that everything will be fine in a year or two. Nobody agrees, not even the experts. For us, all this disagreement makes it difficult to write business plans and schedule acquisitions."

"Everybody in my industry is worried," JF admitted. "There will be jobs lost. This is not a time you want to be out there looking."

.

"AE doesn't have to worry," AS said. "Lawyers and bankers always make money. The worse things get, the better the lawyers will do."

Nobody argued with that.

"This war has cost us three trillion dollars," AS said. "Three trillion dollars we didn't have to begin with."

"Our competitors, like China and Japan, have been bailing us out," JF said. "They've been buying dollars and getting punished for doing so. But this is only a temporary fix and it's only scratching the surface. I don't know how long it will be before the give up."

"It's true," I said. "It's just a surface fix. I read something the other day that blew my mind. David Walker, the former Comptroller General of the United States, said that the government has incurred a $53 trillion debt for future Social Security and Medicare benefits. He said that figure is up from $20 million at the start of this decade. What's worse is that it is rising by $2 million to $3 million a year."

"Fifty three trillion dollars? Are you sure it wasn't 53 billion?" AS wanted to know.

"I'm sure," I told them, but I could see they didn't believe me.

"One thing is certain," AE said. "It's going to get worse before it gets better. I read that almost 3 million American homeowners were behind on their mortgages at the end of last year. And another million were listed ‘at risk' of imminent foreclosure, according to the Mortgage Bankers Association."

"Most of those people are holding mortgages that are larger than the value of the houses," ES pointed out.

"Which means they have no vested interest in the houses," AS said. "It's cheaper to let them go."

"When you have no skin in the game, it's easy to quit," ES said.

Again, nobody argued with that point.

The Growing Wealth Gap...Incorrigible People and the Arithmetic of Wealth

2008-04-16T15:54:00.004-04:00

Here are some notes from this week's reading. Periodically, I plan on posting similar notes. They are short. They are sometimes cryptic. And they are not fully thought out. But they might provide some useful ideas to the motivated ETR reader. Some of them will emerge as essays, briefs or blogs in the future.

I've been reading a book on wealth and poverty from a man who won the Nobel Prize for his work helping the poor of Bangladesh. His name is Muhammad Yunus. His book is called Creating a World without Poverty. It's a good, quick read. I found myself arguing with it a lot but admiring it too. I recommend it to anyone who wonders about global poverty.

One thing that Yunus said that got me thinking was a reference to the"growing gap between rich and poor." You hear that all the time. Usually - as with Yunus - it is a call to arms. Some parts of the economy may be getting wealthier (or smarter or more Internet savvy or whatever) but the gap between them and the bottom is growing. This is supposed to be very disturbing. And it used to alarm me. But lately I've begun to wonder if this isn't a specious concept. Yes, the economy is expanding. Yes, the poor are getting richer. But what about the gap between the rich and poor? That is getting wider! It's an interesting bit of logic. Very appealing. But fundamentally flawed. I should look into that. It may be that any time an economy improves the poor get richer faster because that is how it naturally happens in a free market. The rich, after all, have more resources: more capital, more intelligence, better connections, better financing, more education, more experience, etc. And on top of all that, they begin as the economic leaders. How could it not be that they would get richer faster? But is that a problem? And if so is it real or relative? You can't eliminate that except by force which ruins the economy. We should not measure the gap but the gap between how poor the poor were and how poor they are now. Compare this thought to the study Alex Green talks about that indicates people would rather have $50 in a $100 distribution than $100 of a $500 one. What does that say about human psychology? It goes a long way to explain why we worry about relative gaps.

In Creating a World of Wealth Yunus admits that free markets create wealth but wants a new sort of World Bank to eliminate poverty. One like his own bank, the Grameen Bank. But what if poverty is not caused by social and economic inequities but by an uneven distribution of intelligence, ambition and tenacity?

Yunus believes that capitalism is insufficient because it is profit based and therefore simplistic. Human beings are more complex than that, he argues. He proffers another model: Social business.

Not everybody can be saved. Not everyone can become a successful entrepreneur. Having worked with some diehard dunderheads over the year, trying bootlessly to motivate and direct them, I must concede: some people lack the mental resources to succeed.

If that is so, then what to do? Leave those people in poverty?

Success is about probabilities: knowing how to use them. Most would-be entrepreneurs make two big mistakes. They start businesses that have a low (20%) chance of success and quit marketing and sales efforts because they don't realize the probabilities of direct response success. The secret to success: start high probability businesses and keep selling till you have taken a sensible amount of chances.

Commuting to Manhattan A Grim Ray of Hope

2008-04-02T16:24:00.002-04:00

My second son works in Manhattan but lives in Brooklyn, about 40 minutes away from his office. He lives so far away because he can't afford the rent downtown. When he was home for Easter, we got to talking about real estate prices in New York. As long as he's been in the city (four years at NYU and now one year on his own) prices have been escalating. From his perspective of five years, he can see nothing but further increases.

Sometimes, when I'm in the city, I feel the same way. Apartments I could buy for a million dollars here in Florida would cost me $5 million there. It's too much to spend but I wonder, "If I don't buy now, will it just get more expensive in the future?"

There are arguments that can be made. New York is a unique city - there is none like it in the world. If Americans can't afford apartments on Madison Avenue or overlooking Central Park, Europeans or Indians or Chinese people will buy them up.

Ultimately, though, Manhattan's real estate market is dependent on New York City's economy and that economy is only marginally affected by overseas investors. What does affect the city's economy strongly is all the financial activity that is based there. All the banks and brokerages and insurance companies and, of course, the stock exchanges.

About a third of the Big Apple's economy is based on Wall Street. That's higher than it's ever been, according to the New York Times. Wall Street's incomes – which are extremely high right now - are likely to be coming down. They are being destabilized by the recent bad news about Bear Stearns. And if the news gets worse, as it likely will, there will be lots of demotions, firings and even massive lay offs...

According to the New York Times, Wall Street incomes escalated from about $250,000 in 2001 to about $390,000 last year. That's enough to buy a pretty fancy apartment. But what will happen when that figure drops down to a more realistic figure? What will happen to the rents then?

"Up to this point in New York City, the material result of the credit crunch hasn't been felt as quickly as people were expecting," Marcia van Wagner, deputy comptroller for the budget of New York City, told the New York Times. "It took a while for the other shoe to drop."

This Bear Stearns bailout is pretty scary on the face of it. But if you look behind the curtain, it is scarier still. To save the financial giant from complete collapse, JP Morgan Chase bought out Bear Stearns stock for just $2 a share. That was barely one tenth the going market price, which meant that all those stockholders were decimated.

But it wasn't really JP Morgan that saved the company. It was the government guarantee that stood behind JP Morgan. According to the deal, JP Morgan assumed the first $1 billion of Bear Stearns' debt. But the government agreed to take on the rest. For the purpose of the deal, that was estimated to be about $30 billion.

Only a fool would think that Bear Stearns is the only big financial company in serious trouble. And only a bigger fool would believe that the government has the resources to keep stepping in at the last moment and saving the day.

It seems inevitable to me that there will be a big financial shakeout coming. And at the end of it, most Wall Street honchos that were making almost $400,000 a year will be unemployed or working for a quarter of what they are making now.

When that happens, real estate values and rent prices will come tumbling down. And that's when my son will be able to move into Manhattan and walk to work.

What Do We Expect from Our Politicians?

2008-03-25T17:08:00.001-04:00

My friends who hated Clinton thought he should have been impeached for lying to Congress. My friends and colleagues who liked him thought the whole investigation into his sexual misconduct was a symptom of what is wrong with America.

The governor of New York had a weakness for high priced prostitutes. The discovery of his indiscretions - which put him out of office - was supposed to have been accidental. Now we find that it was planned by a political opponent.

The Mayor of Detroit, Kwame M. Kilpatrick, has been charged with eight felony accounts - which sounds like he must have been running a cocaine operation. In fact, he is being charged eight times in different ways (perjury, obstruction of justice, conspiracy to obstruct justice, misconduct of office, etc.) for lying about an affair.

These are just three examples that spring to mind. In the past twenty years there have been dozens of high-ranking politicians who have lost their positions because of sex scandals. Most of them were forced out of office not because of the sex itself, but because they lied about it.

Or that's what their accusers would have us believe. "It's not the blow job that bothered me," one colleague said about Clinton at the time. "It's that he lied to the American people about it."

I thought, "Are you kidding?"

What do we Americans want from our politicians? Leadership? Intelligence? Wisdom and good decisions?

Or do we want chastity and truthfulness?

In the old days - and by that I mean the days of my childhood - politicians could expect to keep their private lives private so long as they didn't flaunt their affairs. And even when they did - as John Kennedy did, God bless him - the public took a healthy view of it: You can't expect a guy like him to say no to Marylyn Monroe, could you?

Those were the good old days, it seems to me. The days when politicians vilified their opponents by pointing out weaknesses in their political philosophies. The days when politicians argued about big, scary issues like communism and the end of the world. Those were the days when ideas were important in politics and personal conduct was left to the gossip magazines.

At least that's how it seems to me now, looking back. It seems, too, that the trend toward mudslinging in political debate has paralleled the trend toward muckraking in journalism. With more frequency every decade, reasonably good public servants have been done away by this new process. It is lots of fun to read about… but it makes you wonder if we are a better or a weaker nation because of it.

When it comes to secret sex and lying about it, it doesn't seem to make any difference what faith or party you belong too. Republicans rank right up there with Democrats and Libertarians. Born-again Christians probably top the religious charts, but who's counting?

We live in an America where our President is allowed to lie to us about why we should start a war but can't lie to us about who he's diddling in the oval office.

Does that make sense?

If the American political system has proven anything in the past 50 years it is that Americans are perfectly happy to select their leaders based on their ability to attack their opponents personally and reject those same leaders later on based on their former opponents' discoveries of their own flawed personal lives.

I don't get it. I never have. That's probably why I've always stayed about as far away from politics as I could get. I've voted only once in a national election.

Imagine if America ran its businesses that way. Imagine if we chose and deposed our business leaders according to what they did in the bedroom instead of the board room. How successful would our businesses be then?

I guess that's the point: the difference between business and politics. In politics we choose our leaders. In business, people who are natural leaders choose us.

Idolatry - How It Can Keep You Safe

2008-03-21T09:32:00.001-04:00

I got a funny letter from Bill R....a copywriter who attended last fall's copywriting boot camp sponsored by AWAI.

At the end of the conference we raffled off these life-sized, cardboard cutouts of the keynote speakers, including yours truly. It was a whacky idea -- would people really pay for replicas of us? Who did we think we were? Rock stars?

I was hoping a beautiful young woman would buy my figure, but it was purchased by a young man - with a sense of humor.

Just last week I was thinking about that. What did that guy do with the cutout? Did he leave it in his hotel room? Or did he bring it on the plane with him?

Then I received this email from him:

All Across the US Home Invasions are on the Rise....

Lucky for you, you have a friend on the inside.... your worries are finally over!
One Look from Michael Masterson and would-be burglars head for the hills!!

Available for the first time in the continental United States, the Michael Masterson Home Invasion Protection Kit has hit the market. Your sleepless nights are over ... no more waking to every snap of a twig or chirp from a cricket.

OK, enough drama....

To make a long story short, during Boot camp 2007 I bid on and won Michael Masterson during the auction of stand-up figures. Recently some degenerates decided to attempt to break into my car. Luckily, I was home and scared them off. Then I wondered what to do when I could not be home? Michael and I sat down and talked about it....... The solution was

simple and I implemented it in no time.

Recently, a neighbor told me that the car thieves showed up again and they ran off when they saw my friend in the window. A neat trick considering that I live alone and the house was empty; empty except for Michael. A few days earlier, I installed a light with a motion detector and made sure that it partially lit up the window where I stood the cut-out of my buddy Michael.

When the wannabe car thieves approached my car, the light came on and there stood Michael Masterson with his menacing "this copy is crap" look and kung-fu grip. My 1970 Lincoln was safe to cruise another day!

Tell Michael I said thanks for keeping the homestead safe and that we need more beer.....

Bill

How to Write Good, Brief Editorials

2008-03-20T10:55:00.003-04:00

We have high standards at Early to Rise. We want our free e-zine to be the best of its kind in the world. We want our readers to benefit from it. We want them to love it and buy products that we advertise.

It all depends on how good the writing is. That's why sometimes, when I see ordinary writing in ETR, I send out a message to the editorial staff, reminding them of our high standards. You might be interested in what I had to say.

First, let me give you the brief so you can decide for yourself how good it was. Then I'll give you my memo.

The Brief:

It's Good to Know: The Pros and Cons of Lead Paint

Lead paint, specifically its use in children's toys, has been in the news lately, with several companies issuing recalls for imported toys covered in the stuff. If ingested, lead paint can cause brain damage and other serious problems. The U.S. government banned its use in children's products, hospitals, and residences in 1978, but it may surprise you to learn that it's still widely - and legally - used. It is on road signs, ships, heavy equipment, bridges, and the like. Why? Because lead paint is cheaper, brighter, and more durable than its less-toxic cousins, and it's also mildew-resistant.

Here's what I sent to the ETR editorial staff:

This brief...it's not up to our standards. It is totally conventional, accepted wisdom...

So much so, that I doubt the truth of it. I'll bet you that in the future studies will show us that all this worry about lead was greatly exaggerated. In fact I read an article that made that point a few years ago. I don't remember the details but I do remember that the writing was GOOD....

It is also a fuzzy idea....it says the good and the bad....This is EXACTLY what magazines do....leave you in emotional limbo by pointing out both sides of every issue....That's good for them because they are in business to sell watches and cars....and people need to be emotionally neutral to buy merchandise like that

But we are in the business of selling cutting edge, contrarian ideas...and we aren't wishy-washy about it.

All articles have to be up to our ETR standards....

They have to...

express one GOOD idea

be written cleanly -- i.e. a Flesch-Kincaid grade of 8 or less (the article in question has an FK score of 9.8)
convey an emotion

By GOOD IDEA I mean one that is:

Cutting edge or contrary, not conventional and accepted

Consistent with ETR's view of the world

An idea doesn't always have to be USEFUL to be good, but when it is useful we should point out how to use it.

A Little Bit of Learning Each and Every Day

2008-03-12T10:19:00.000-04:00

I'm going through my "to-read" in-basket. It's piled high with tearsheets from magazines, newspapers, special reports and speeches. There's a stack of research reports Jason found for me on positive thinking. A New York Times article on why taxing with an inflation index is unconstitutional. A report from someone who attended one of Matt Furey's conference on email marketing. I'm sorting through all this good stuff, wondering: "When am I ever going to read this?"

It doesn't do any good to have it sitting in a box on my desk. I need to get it into my head so I can process it and turn it into productive ideas.

There's one easy way: Commit to spending a half hour each day educating myself. I haven't done that in a while. This will be fun.

What I've done is put each of these informative reports into my daily pendaflex folder. (Longtime readers of Early to Rise know that I file documents for future lists in two folders: one divided into months and another divided into 31 days.) I put one report in each day's slot. Before leaving each evening, when I plan my tasks for the following day, I'll allocate 30 minutes to study the report and take notes. I'll use my speed reading techniques to get through the long (30-plus page) reports. The point is to do or learn one useful thing every day.

How Important Are Resumes? And MBAs?

2008-03-11T16:44:00.000-04:00

PS sent this comment from Warren Buffet:

"Susan came to Borsheims 25 years ago as a $4-an-hour
saleswoman. Though she lacked a managerial background, I did not hesitate
to make her CEO in 1994. She's smart, she loves the business, and she loves
her associates. That beats having an MBA degree any time...Charlie and I
are not big fans of resumes. Instead, we focus on brains, passion and
integrity. Another of our great managers is Cathy Baron Tamraz, who has
significantly increased Business Wire's earnings since we purchased it early in
2006. She is an owner's dream. It is positively dangerous to stand between
Cathy and a business prospect. Cathy, it should be noted, began her career
as a cab driver."

Reading More Good Books: How I Can Enrich My Life Cheaply

2008-03-05T11:44:00.002-05:00

A colleague copied me on an email he wrote recently asking for reading recommendations. "I'd prefer non-fiction," he wrote. "Something that might have challenged your thinking or surprised you in some way. I'm sending this note to just a few, select people. Most of the time when people recommend books to me I find that they are idiotic."

I wrote back saying, "I appreciate the vote of confidence but I'm worried that if I send you a recommendation this year and don't get a letter from you next, I'll have been put on your list of idiots."

But I thought it was a good idea: asking friends or colleagues for book recommendations. And I thought about the non-fiction books I'd read this year. Which, if any, could I recommend?

Most of the most memorable books I read in 2007 were works of fiction: The Road by Cormac McCarthy, Blindness by Jose Saramago, Saturday by Ian McEwan. I was disappointed in rereading Hemingway's The Sun Also Rises.

I could barely remember the non-fiction books I read. Still in my mind were the most recent books I had read while K and I were touring Delhi, Agra, Jaipur and Udaipur and while I was in Mumbai two weeks later on business. These were smallish books on history, religion, art, and architecture - not the "big idea" kind of book that my friend was looking for.

He was looking for recommendations for books like The Tipping Point by Malcolm Gladwell or The Long Tail by Chris Anderson These were books that helped me rethink the way I was doing business. They sped up some thoughts I had been developing. They provided, eventually, some very practical value. They made my life simpler and richer.

There was Bill Bonner's book, Mobs, Messiahs, and Markets, which had a big idea and was well written. But I have not yet finished that yet and more importantly I am sure my friend has already devoured it.

Finally, I decided to recommend Christopher Hitchen's God is Not Great. I sent my friend an email saying, "I can't say this changed my thinking. In fact, it reinforced my intellectual prejudices. But I completely enjoyed the book. I found it endlessly interesting. I learned from it. I luxuriated in Hitchen's good prose. And I relished little gems such as:

The Buddhist walks up to the hot dog vendor and says, "Make me one with everything." The hot dog vendor takes a hot dog from his bin and slathers on pickles and onions and mustard and ketchup and hands it to the Buddhist. The Buddhist hands him a twenty dollar bill. The hot dog vendor takes it and puts it in his pocket. The Buddhist stands there, munching his hot dog. Finally he says, "Where's my change?" "Change comes from within," the hot dog vendor says.

Searching for a recommendation-worthy book got me thinking about reading. I am reading more than ever these days. I'm not sure why. But part of the reason is that I've become a better reader. And the benefit is that I am enjoying more books.

I would like to read more books this year. Why? Because doing so will make my life richer. A richer life is a better life. And there is no reason why life shouldn't get better. Not, at least, that part of life which one I can control: the life of my mind.

Right now, I am reading The Ginger Man (a novel banned for obscenity in the U.S. when first published in 1955) and a book about Hindu art and architecture, and rereading Gene Schwartz's Breakthrough Advertising.

The Ginger Man has already made me realize that I need to revise the novel I am writing. I need better, terser language. J.P. Donleavy writes so impressively.

A chapter in Breakthrough Advertising is a key part of a system I've developed for writing good leads. John Forde and I will be writing it together this year. It will be published by AWAI and some other publisher. It should be very good. I'm excited about it.

Since one of my clients has a new office in India, and since I'll be traveling there to visit that office at least once a year, I'll benefit from knowing more about the culture. It will also help me acquire Indian art and crafts more successfully.

I am also reading through the lyrics of Bob Dylan and the poetry of Walt Whitman to stimulate ideas for poems. Last year I wrote a poem every day. 365 poems in 365 days. This year I will write one big poem about America. Dylan and Whitman should be helpful there. Also The National Enquirer, People magazine, etc. On my to-read book list right now are:

The Intelligent Investor by Ben Graham

Value Investing by Martin J. Whitman

The Lexus and the Olive Tree: Understanding Globalization by Thomas L. Friedman

A History of the American People by Paul Johnson

What Works on Wall Street by James P. O'Shaughnessy

What Has Government Done to Our Money? by Murray N. Rothbard

Out Stealing Horses by Per Petterson

Then We Came to the End by Joshua Ferris

The Nine: Inside the Secret World of the Supreme Court by Jeffrey Toobin

The Rest is Noise: Listening to the Twentieth Century by Alex Ross

Kafka on the Shore by Haruki Murakami

On Beauty by Zadie Smith

De Kooning : An American Master by Mark Stevens

Postwar : A History of Europe Since 1945 by Tony Judt

Runaway by Alice Munro

Snow by Orhan Pamuk

War Trash : A Novel by Ha Jin

Will in the World: How Shakespeare Became Shakespeare by Stephen Greenblatt

Chronicles: Volume 1 by Bob Dylan

Drop City by T.C. Boyle

The Metaphysical Club: A Story of Ideas in America by Louis Menand

True History of the Kelly Gang by Peter Carey

Coleridge Darker Reflections 1834 by Richard Holmes

Disgrace by J. M. Coetzee

The Feeling of What Happens: Body and Emotion in the Making of Consciousness by Antonio Damasio

Headlong: A Novel by Michael Frayn

Morgan : American Financier by Jean Strouse

Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow

What are you reading? What have you read recently that was worthwhile?

Do You Have a Home Office? Would You Like to Have One?

2008-02-27T14:03:00.002-05:00

In the early '90s, the New York Times recalls, the term home office meant the headquarters of a company. "Back then," the newspaper says, "the very idea of working at home had a certain stigma, except in a few vocations like freelance writing. In the popular imagination, people who worked at home were usually laid off or couldn't hold down a job or were peripheral to the work force.

"But by 2006, according to data collected by the Dieringer Research Group (Brookfield, Wis.) more than 28 million Americans were working from home at least part time." More startling, perhaps -- this was an increase of 10 percent from the year before.

According to the American Homes Furnishings Alliance, 7 in 10 Americans now have offices or designated workstations in their homes, a 112 percent increase since 2000. And a recent survey by the National Association of Home Builders found that home office ranked as the fourth most important feature in a new upscale home.

Another article in the same issue profiled a New York couple who had to find a bigger apartment when they both decided to work from home. The apartment that they lived in was fine for one of them to work but not both at the same time. "He kept talking to me about his work, which is very interesting, but it was really taking time out of my workday," the young woman said. "And when I was alone there was a sense of loneliness and procrastination."

Do you have a home office? Have you thought about getting one?

I didn't used to. But I do now. In the old days I was happy getting to work two hours before anyone else and doing my important-but-not-urgent work in the quiet of an empty office. But since Early to Rise has grown up around my office, that has become impossible. Spurred by our constant "early to rise" preaching, half the company's employees are getting in at the crack of dawn. Which means that some of them were finding their way to my office.

The solution for me was to build a writing studio on top of my garage. It is a single room with a small bathroom, big enough for a writing table, two chairs, some bookshelves and a cigar box. That cigar box is a bonus that came with the room. Nowhere else on the Masterson premises am I allowed to smoke indoors.

Since that writing studio was completed, I've been climbing up to work there at 7:30 every morning. After sprinting and stretching on the beach, I take a big cup of coffee and turn on my computer. The first thing I do every morning is to start my journal. I document the state of my psychology: whether I'm motivated, depressed or hung over. And then I start writing.

Since I've been using a home office, my productivity has increased. The biggest change has been the amount of fiction and poetry I have been able to write. In the old days I felt guilty about writing personal stuff in the office. I have no such feelings about my little writing studio at home. It's there for my personal use. So that's what I'll do there!

My requirements for a good home office are simple and few:

A good chair that is not too comfortable

A window with a view that is not too great

A docking station for my laptop computer

Books for inspiration

And the aforementioned cigar box

Those who have written me chastising me for smoking will be happy to hear that I seldom actually smoke there. (If I do smoke, it is usually a short cigar once a day after lunch.) Although I do believe it is better that I smoke less, I'm happy to know that there is a box of Nicaraguans waiting for me should I weaken my resolve.

I am writing this in the late afternoon at my office office. I have just completed two very productive meetings and a handful of phone calls. I will do my emails after I'm through writing this and then I'll do more work for the afternoon and evening. But tomorrow morning, after my run, I'll be up there again in my little hideaway chipping away at my dream of being a writer of fiction, one paragraph at a time.

Ready, Fire, Aim Hits #11 on the New York Times Bestseller List!

2008-02-19T09:32:00.005-05:00

Any time you get an e-mail from a colleague with a subject line in all caps with three exclamation points it's got to be something good. When you open the message and you read, "Yuuhooooooo! NY Times Bestseller!" that's even better.

That's right. My new book, Ready, Fire, Aim: Zero to $100 Million in No Time Flat, just hit #11 on the New York Times Business Best Sellers list. Even though the book hit #1 on Amazon right after the New Year and then #7 on the Wall Street Journal's list a month ago, I'm still very proud of this accomplishment. It means that many weeks after our biggest marketing efforts have faded, people are still buying the book, and in great numbers.

They're reading about it online, seeing reviews in print publications, hearing about it from friends and business partners, and then going out and buying a copy. If you are one of them, I thank you. And from the reviews I've seen on Amazon and the many we've received directly from readers at Early to Rise, very few people are disappointed with their purchase. Here is one of my favorites:

"Michael has written a power-packed book which will surely ignite both the
aspiring entrepreneurs along with the seasoned entrepreneurs. I have been a
serial entrepreneur since high school and have learned a lot along the way and this book will now be part of my recommended required reading. To sum it up, Ready, Fire, Aim is an energy-filled book which shares some proven and
effective strategies on how to be a successful entrepreneur. This book is an
authentic, to-the-point guide that will surely be a helpful tool for all
entrepreneurs, everywhere!"
Adam Toren
Co-founder/President
http://www.youngentrepreneur.com/

I'm glad to read that Adam is benefiting so much from reading Ready, Fire, Aim. And that's what it's all about really. The prestige from being on all the best seller lists is great, but changing how people do business and teaching them how to be successful is much more rewarding.

Mountains Beyond Mountains

2008-02-13T08:56:00.008-05:00

One of the benefits of participating in a book club is reading books you would not have selected on your own. Sometimes those books can be provocative and rewarding.

February's book club selection, Mountains Beyond Mountains, was both. A New York Times "Notable book" and Reader's Circle selection, this 304-page nonfiction narrative by Tracy Kidder is the kind of book that will have you thinking about its ideas for weeks or months after you finish it.

(CAUTION: POTENTIAL SPOILERS AHEAD)

It is a profile of Dr. Paul Farmer, a Harvard trained tuberculosis specialist who has spent his life bringing first-world medical treatment to some of the earth's poorest people. Tracy Kidder does a good job presenting this story. Although he seems too smitten by the doctor at the book's beginning, he gains perspective as the narrative goes on. By the end of the book the reader has a nuanced view of this impressive and complicated healer. It is the view that Kidder seems to have. And that's okay. Because Kidder, we realize, is more like us than Dr. Farmer is.

Dr. Paul Farmer is a very unusual doctor. Completely dedicated to his patients, he is happy to travel miles and miles in rural Haiti to visit patients that can't come to him. He works tirelessly, lives frugally, writes books, makes speeches, argues his cause and travels more than 250,000 miles a year to raise money and public awareness for people who can't afford the kind of medical care that most first-world citizens consider normal.

Starting with nothing but a few thousand dollars and an indomitable will, he flew to Haiti as a young medical student. He established a small clinic in Cange, a rural area that had no access to doctors. From that meager beginning he went on to develop several other successful clinics in other parts of the world. He also developed a method of treating tuberculosis patients who were resistant to the most common forms of treatment. In pursuing his career, he attracted apostles - a wealthy man who was happy to "get rid" of his fortune by donating to the doctor's mission as well as dozens of doctors, nurses and volunteer workers who believed, as he did, that the poor deserve the same medical treatment as the rich.

This is particularly true, Dr. Farmer believes, when the patient is suffering from a life-threatening disease (such as tuberculosis) that can be cured. In an interesting passage about the concept of triage - the medical term for deciding which patients gets treated first and/or treated at all and which patients get treated later and/or ignored completely - the reader is presented with the fundamental moral issue that permeates the book:

A woman from the city of Hinche, "eschewing the dreadful public hospital there," brought her son John to Farmer's clinic. The boy had swelling in his neck and a high white cell count. One of Farmer's doctors decided he needed emergency treatment, but the kind that could only be given in a first-world hospital. She found an oncologist at Massachusetts General Hospital who agreed to diagnose the boy for free. She took tissue and blood samples and Farmer flew them with him to Boston. The diagnosis was bad. John had nasopharyngeal carcinoma, a very rare and deadly cancer. If caught early, however, it had a 60% to 70% cure rate.

At first Farmer thought the boy could be treated in Haiti, but as time passed he got quickly worse. The only chance to save his life was to fly him to Boston and have the procedure done there. Since commercial airlines would not carry someone looking as dreadful as John did, they decided to medieac him there - transportation that cost the clinic $20,000. The account of taking him to Port-au-Prince where the Lear jet waited was harrowing. A storm was raging. The ambulance broke down several times. And the machine that was keeping John breathing was hooked up to the cigarette lighter. By sheer force of will, they got John to the jet and from there everything went smoothly.

Everything except the outcome. His disease had spread too far. In a few short weeks, he was dead.

The $20,000 spent on John did not save his life. Yet it would have saved several lives - possibly dozens - if it had been used locally, to treat Haitians whose ailments were less advanced.

Thus the question of triage: given limited resources, what is the most humane way of helping the sick and the poor?

Does everybody have an equal right to the best medicine money can buy? Farmer thinks so. When there is a chance to cure someone, as there was with John, there is also a moral imperative to do everything you could. He has a term for this. He calls it an AMC - an area of moral clarity.

Other health practitioners - most health practitioners in fact - have a different idea. They advocate triage -- using what resources you have to help the most people you possibly can. It is morally better, they would argue, to let John die - even if he might have been cured - if the money spent on John could cure several Johns who didn't need to be medevaced to the United States.

Dr. Farmer spends a good deal of his time arguing this issue when he attends medical forums or meets with international aid groups or courts wealthy people and organizations for funds. His view is that everybody should do what he does: abandon the desire for personal gain and safety. Commit to the notion that we should treat everyone and anyone with the same care and giving that we would give ourselves or our own children.

Dr. Farmer doesn't have a good answer for the economic criticism of his mission: that what he is doing can't be done universally. By spending so much on one dying child, you deprive others of their right to live.

He doesn't have an answer but he is sure he is doing the right thing. He feels it most convincingly when he is hiking miles, mountain over mountain, to help his poor patients. He feels it as a moral certainty then. So he keeps pushing, even though he knows that at some level his mission (of eradicating unnecessary death among the poor) cannot succeed.

Kidder's depiction of Dr. Farmer shows him to be a complicated man: caring but myopic, intelligent but naive, idealistic and zealous, moral and arrogant. But despite his flaws, Dr. Farmer presents a challenge to the thoughtful reader: What is my moral responsibility? How much should I do?

The president of my book club was so inspired by this account that he decided to establish some sort of medical or anti-poverty program in Latin America. He didn't want to simply give money to existing programs. He wanted to get involved, like Dr. Farmer, and see what kind of difference he could make.

I would not have read this book if it had not been mandated by my book club. Yet I'm glad I did. It has already given me some interesting thoughts:

My friend Ella, who believes that all "overly wealthy people" should give up their "extra" money to the poor. What is an "overly wealthy" person to Ella? Anyone who is wealthier than she. She considers her personal fortune, about $2 million as near as I can guess, to be adequate but also necessary. When she makes her point I can't help but think that the money she wants to give away is mine, not hers.
Should a rich man stop working and spend his life administering to the poor? Or does it do more good to keep working and thus be able to contribute large sums of money to those, like Dr. Farmer, who need money to do their work?
Are areas of moral clarity real? Or are they selfish, smug delusions? I have had moments when I was sure that what I was doing was good. Some of those moments involved giving large sums of money to people in need. About half of the time that money didn't help matters. That left me wondering whether I shouldn't have triaged it better by giving it out, in smaller doses, to people who might have used it better.
At one point in the book Dr. Farmer finds himself crying over the fate of a young patient. He realizes that he got so emotional because he saw his own daughter in that little girl. To Dr. Farmer, this is a flaw in his character. He wants to care as much for "The least of his brethren" that he does for "the most." But nature mandates that we care more for our offspring than we do for anything else. That is an instinct that preserves our species. Can something so fundamental to our nature be wrong, as Dr. Farmer thinks? I am not sure. I do believe that civility, if not civilization, is advanced by expanding one's selfish instinct to preserve his lineage. But I also think that there is something healthy about that too.
On the one hand, Dr. Farmer's strategy is obviously impossible to execute globally. There is simply not enough money in the world to do what he does. On the other hand, it seems to an outside observer (not just to him) that he is doing something good and should be admired for it. What, if anything, does this mean?
Nothing works against poverty and disease. Despite all our efforts - including the efforts of the Dr. Farmers in the world, these human scourges persist.
One of the reasons that it is impossible to eradicate poverty is because we don't really understand what it is. We see it as something fixed and static. We think, "There are a hundred trillion dollars worth of poverty in the world and two hundred trillion dollars of wealth." If we can redistribute that wealth then poverty would be gone. But what if poverty, like wealth, was not something fixed and static? What if poverty was a result or a product instead? What if poverty can be produced just as readily as wealth? Then it would be obvious that it can't be eliminated. Even if we got rid of whatever existed today, there would be more poverty tomorrow. (This last is a thought I think I should expand on.)
Even if it is impossible to eliminate poverty, our instinct to fight it seems natural, even instinctive. The impulse to help the poor is just as fundamental as the impulse to make ourselves rich.

A Book You May Want to Add to Your Bookshelves

2008-02-05T14:08:00.000-05:00

The last book we read for our book club was A General Theory of Love.

I've been recommending it strongly.

I had read a good review of it in The New York Review of Books. It was about neuroscience - something I had heard of but never really understood. I thought it would be a good chance to find out why this is such a hot subject.

It turns out that neuroscience is about how the brain works. A General Theory of Love is a book about the biology of emotion.

Despite a tendency toward ornate prose, the book was terrific. It was chock full of interesting facts, figures, stories, studies and conclusions. It clarified and advanced my thinking about many things, including:

The anatomy and functionality of the brain

Where emotion and thinking reside

The causes of anxiety and depression

How much motherly attachment is good

Why Freud and psychotherapy are so bad

Why dogs are better friends than cats

When animals regress in evolutionary progress

Why some people stand too close to you when they speak

Why repressed memory syndrome is a hoax

How false memories land innocent people in jail

Why babies should be allowed to sleep with their parents

The important difference between loving and being "in love"

Here are some of my notes on the book:

Problems and Questions:

Page 23: The authors don't want to locate love in the reptilian brain, but they will assign gang violence to it, even though they admit that reptiles display both aggression and courtship rituals.

Page 173: Feeling like you are being treated can help you recover because of the connectivity. The limbic brain is healed. Could this account for the placebo effect?

Page 190 - End: The last part of the book does two things: First it discusses the difference between loving...which happens in the limbic brain and is based on mutuality and involves reciprocal physiological connection...and being in love...which requires only a brief connection. This is very good. It harkens to F. Scott Peck's distinction between Romantic love and loving. The second major theme of the back of the book makes the argument that "some cultures encourage emotional health while others do not." The authors criticize America particularly. This was the weakest part of the book.

Differences between Mammals and Reptiles

Mammals bear their young live. Reptiles lay eggs.

Mammals nurse, defend and rear their offspring. Reptiles ignore and often abandon them after they hatch.

Mammals form close-knit, mutually nurturing social groups (families). Reptiles live solitary lives.

Mammals communicate with their children. Reptiles do not. (After limbic ablation adult hamsters ignored the calls and cries of their young, pups would stop over their mates)

Mammals play with one another. (A man tugs a toy with a dog.) Reptiles do not.

Interesting Facts and/or Statements

If the Wernicke part of the left brain is damaged you cannot understand what people are saying to you but you can speak perfectly well. (58)

If the Broca part of the left brain is damaged you can comprehend but not express yourself. (58)

Damage to the right brain can result in Aprosodia, an inability to either discern or to or deliver the emotional nuances (verbal inflections) of the spoken language. (58)

Animals with little neocortical brains - dogs, cats, opossums - have emotions. (60)

Babies look to the expression on their mother's faces to detect danger. (61)

The limbic brain is very sophisticated at detecting the internal states of other mammals. (62)

Because of the connectivity of the limbic brain, emotions are contagious whereas thoughts can easily be rejected. (64)

Take a puppy away from his mother and he will bark and whine for a while.

Reunite it with his mother and he will quiet down. Separate him for a very long time and he will become ill tempered and despairing. (74)

Prolonged detachment creates a host of somatic symptoms. (82)

Detachment from individual motherly parts produces individual symptoms of despair. For example, detachment from the mother's bodily warmth slows bodily activity while detachment from the mother's milk produces sleep problems. (82)

It used to be thought that the limbic system was determined entirely by the DNA. Now we know it is subject to crucial early growth experiences, such as those provided by the mother. (89)

Sometimes animals abandon evolutionary traits to survive. Pandas, for example, don't need the attachment to the mother that other mammals do. This is probably because nature has forced them to live alone even from a young age. (90)

When people have trouble with their emotions they often want science to pinpoint an offending neurotransmitter, but the brain doesn't work that way. (92)

The limbic brain has neurotransmitters that produce pain and also assuage pain: opiates. (95)

There are two types of memory: explicit memory and implicit memory. Explicit memory records perception: i.e., events. Recent scanning studies show that this part of the brain controls imagination as well. Thus explicit memory is totally fallible. The explicit memory function of the brain cannot distinguish between real and imagined events. (104)

Implicit memory allows us to learn languages and skills. (108)

Implicit memory is active at birth. Explicit memory begins after infancy. (112)

Reasoning has little or no effect on the limbic brain and that is where all the perceptions and emotions are contained. (118)

We learn by neural networks that are inscribed by experience, most especially the experience of early attachments. (120 - 140)

A limbic connection can steady a person whose emotions are tumbling out of control. (172)

Medications can sometimes steer emotions where attachment cannot. (172)

Throughout history man has regulated his limbic brain with alcohol, opium, cocaine, etc. (176)

You cannot control the limbic brain with the neocortical brain. You cannot easily control your perceptions by thinking about them. Self help gurus that say you can feel more positively by making statements in the mirror are probably mistaken. (177)

Nothing kills therapy faster than a therapist who follows Freud's dictum to be "opaque to the patient." (184)

Recent studies show that human babies are meant to sleep with their parents and that dying from sudden death syndrome is more likely to happen when they are alone than when they are with their parents. (196)

Loving relationships are, by definition, based on mutual interest. This is how the limbic brain works. Selfish relationships cannot produce that loving feeling. (208)

These are just a small portion of the notes I took on this book. Check it out yourself and let me know what you think.

Ready...Fire...Aim! Gets Its First Negative Review

2008-01-31T08:41:00.000-05:00

My new book, Ready, Fire, Aim: Zero to $100 Million in No Time Flat has been getting great reviews. First from colleagues in the industry. And then from critics. And then from readers.

So far RFA has received 18 reviews on Amazon. I was pleased to see that most of them were real people using real names. 17 of the 18 reviews were raves and rated 5 out of 5 stars. One was a panning...at one star.

G Treese - the one-star critic - provided a very different critique. Apparently, he (she?) didn't like it at all. I wanted to know why. So I read his critique very carefully. Here is what he said:

1. "Masterson should just launch an infomercial so he can be like Kevin Trudeau, but he doesn't because it is far less expensive to do viral marketing via the web."

Wrong. First, I don't want to be like Mr. Trudeau. I don't want to run his kind of business. And I don't want to promote myself on TV. I value my privacy. That's why I use a pseudonym.

2. "Look at his reviews for the book yourself; Most of them are very complimentary, yes, but several are from Agora, the publishing company that Masterson owns."

Wrong, again. I don't own Agora. I am happy to be a consultant for them. They keep me on only if I am helpful in growing their business. The year before I went to work for them they had revenues of $8 million. Last year they exceeded $300 million. This year they will top that.

Since Mr. Treese is confused about my relationship with Agora, he makes a statement that slanders those Agora publishers who gave the book good reviews. He implies that they are doing so to flatter their "boss." But they are my bosses. If I provided one of them with a flattering review, this charge - though false - could be made. I am very happy and flattered by the praise my clients gave the book. These are very independently minded people. They don't always give me five-star ratings.

3. "Further, the reviews from those who say they have 'worked' with Masterson are likely people who have paid Masterson to attend his workshops that cost in the thousands of dollars. I could be wrong here, but I searched the reviews and cannot find one that says, 'Masterson worked for me and did a great job.' For someone who is supposed to write outstanding copy and be a high priced expert consultant, it seems odd that there would not be a review from a satisfied employer."

Now Mr. Treese seems to be objecting to what he just criticized: that there are not enough testimonials from my clients. I thought this was an odd criticism... how would he know who my clients are? In any case, I looked at it again today and found that there were in fact several recommendations from clients, two of which are reprinted below.

"As a mentor and now consultant to my company, I have seen first hand how Michael Masterson can grow a business.

"Reading Ready, Fire, Aim was like a flashback to all the advice Michael has given me over the years. I know that advice is the only reason my company survived the initial startup and now has annual sales over $10 million. Now all that knowledge, experience and advice is put together in Michael's latest book. I highly recommend this book to anyone starting their own business, or for that matter, anyone who owns a business of any size.

"Fantastic!"
-Brian Sodi Delray Beach, Florida

"I recently read Ready, Fire, Aim: Zero to $100 Million in No Time Flat. I have to say that it actually surpassed my high expectations. To me, the thing that separates this book from other similar publications is that it's written by someone that has used these principles over and over to make a fortune. The book explains in crystal clear terms how to take specific actions to become rich. And I know that Michael Masterson knows what he's talking about. He's been a consultant for my business for only a month and sales have already doubled following his strategies. This book is a "must buy" for any serious entrepreneur."

-Paul LawrenceFt. Lauderdale, Florida

4. "Lastly, the biggest thorn in the side of a copy writing business (other than losing the reader's attention) are typos. If you read Masterson's self aggrandizing posts, under the heading 'A Good Way to Start the Day' dated 4 January 2008, second sentence. 'He thanked "me for sending me" a copy of Ready Fire Aim…"

I love this last criticism. First of all, it's clear to me that Mr. Treese hasn't read the book. Ready, Fire, Aim is not about copywriting. Neither are any of my other books. They are about starting and developing businesses and building wealth. I do teach copywriters how to write better copy. But I haven't published anything on that subject. When I do, I hope Mr. Treese buys one of the books and actually reads it. If he does, he will discover that typos are not, as he claims, the second biggest problem that copywriters face. In fact, I would not put typos among the top 100 problems.

But I love the fact that his last criticism of the book is a criticism of a single typo that he found among the thousands of articles I have written since ETR began publishing. A single typo! That's great.

But what is better is Mr. Treese's own writing. Notwithstanding the logical and factual mistakes that are so abundant in his critique, there are the following mistakes in punctuation, spelling and grammar:

- There is no need for a comma after Kevin Trudeau.
- There should be a colon, not a semi colon, after "Look at the reviews for this book yourself;"
- The use of the word "yourself" in that sentence is redundant. It should be deleted.
- The following sentence is ungrammatical. It is what grammarians call a "run on" sentence. It should be two sentences. And the "yes" should be omitted.
- "Further" should be deleted from the next sentence. It is unnecessary and makes the writing sound academic.
- That sentence is also too long.
- The next sentence is ungrammatical. There is a mistake in tense. Instead of "cannot find" it should be "could not find."
- In the following sentence "high priced" should be hyphenated.
- In the next sentence there is yet another grammatical blunder: "the biggest thorn…are typos."
- And in the same sentence another punctuation mistake: "self aggrandizing" should be hyphenated.
- The same mistake is made in the last sentence, but we are getting tired now. We must leave Mr. Treese alone.

I don't fault Mr. Treese for all his faults. I'm thankful to him for pointing out my failing: a single typo in an essay of more than 1000 words. The fact that he made 11 fairly serious grammatical, punctuation and usage mistakes doesn't make him an ineffective writer. But it does make his criticism difficult to take seriously.

I was not the only one who felt this way. In response to Mr. Treese's critique, Harry Brown said:

"It is quite odd that this reviewer comments more on other reviews than on the actual book... I have none of the above mentioned relationships with Mr. Masterson except that I'm fairly successful in business. And from my experience, no matter what business school you decide to go to, if you don't get up and actually do something with all your ideas... well that's all they'll be, ideas. And that is one of the things this book tries to pass across to the reader. Stop waiting for the perfect moment to come... ACT NOW!"

"Aspiring Wealth Builder" said:

"I agree with Harry Brown. This reviewer seems confused. Perhaps it's just me, but is she seriously suggesting that instead of spending $20 and a few hours with this book, you're better off spending $100,000+ and 2 years going to business school? Hmmm. that doesn't seem to make good business sense to me."

And "W. Fan" said:

"Masterson has the goods to back up his book, having built more than one significant business. Just my opinion but the price of the book seems an inexpensive way to access his insights given his accomplishments. On B-school, not that B-school has no value but if wealth and success are the goals here, how many of today's Fortune rich list completed B-school or even undergrad studies? If it were me, I'd spend the $20, take some action on Masterson's ideas and pay my way through B-school in cash instead of racking up the debt like most students end up doing."

After reading Mr. Treese's review, I am convinced that he hasn't read the book. Besides the major mistake of missing the book's good advice, he thinks the book is about copywriting. I guess he mistakenly assumed the book was about that. As I said earlier, I've never written a book on copywriting. (However, I am writing three of them now...) Some of my ideas are included in AWAI's programs, but I've never actually written a book on that important subject before. Ready, Fire, Aim is about entrepreneurship - about starting and growing small businesses. It contains most of the best ideas I have on the subject and highlights the most important principles and strategies I've used these past 25 years to help start and grow so many successful companies.

Ready, Fire, Aim Hits #7 in the Wall Street Journal

2008-01-22T11:30:00.000-05:00

I just got an email from my publisher with some great news about Ready, Fire, Aim: Zero to $100 Million in No Time Flat. I'm out of the country traveling on business, and I haven't had a chance to hit the newsstand yet. But apparently my new book is #7 on this week's Wall Street Journal business book bestseller list.

If you were one of the thousands who bought Ready, Fire, Aim... thanks. If you took the time to post a review on Amazon.com or highlighted the book in your blog, website, or e-zine, I thank you as well.

I'm very pleased the book is selling well. I know my publisher is. I truly think this is the best book I've ever written. It collects most, if not all, of the ideas about starting and running entrepreneurial businesses that I've developed during my decades in business. So it's gratifying that so many people are interested in learning from my experience. I expect many more will pick up a copy after seeing it in the Journal.

Yes, hitting #1 on Amazon last week was great. But there is a different feeling from making one of these "big" lists. It's a weekly list, not daily or hourly, so it's much harder to secure a spot. It's definitely more prestigious. This is going to give the book national and even international attention.

I have been on bestseller lists before. Seven Years to Seven Figures was on the New York Times list a couple of years ago, but it still feels just as good this time as it did then.

An Eater's Manifesto

2008-01-22T08:11:00.000-05:00

A New York Times ad for Michael Pollan's new book, In Defense of Food: An Eater's Manifesto, had a good subtitle for the book's January third release: "A New Way to Eat in the New Year." The ad then listed 12 rules from the book, which I will reprint here:

1. Don't eat anything your grandmother wouldn't recognize as food.
2. Avoid foods containing ingredients you can't pronounce.
3. Don't eat anything that won't eventually rot.
4. Avoid food products that carry health claims.
5. Shop the peripheries of the supermarket; stay out of the middle.
6. Better yet, buy food somewhere else - the farmer's market or CSA (Community Supported Agriculture).
7. Pay more, eat less.
8. Eat a wide diversity of species.
9. Eat food from animals that eat grass.
10. Cook and, if you can, grow some of your own food.
11. Eat meals and eat them only at tables.
12. Eat deliberately, with other people whenever possible, and always with pleasure.

Three things that must be said about this ad:
1. The punctuation is excellent. Few people today know how to use a colon and semicolon.
2. The advice is excellent. Longtime Early to Rise readers know these rules.
3. Spelling out all the advice is a risky marketing proposition. I am tempted to read the book because it is clearly a good, smart book. But I have the rules. Do I need the book?

Kudos to Michael Pollan and his publisher.

What's Your Ambitious Goal for 2008?

2008-01-15T10:11:00.000-05:00

Last year at this time I wrote a message to AWAI students and clients, as well as ETR readers. In it I said that I had made a very ambitious writing resolution for 2007. My goal was to write a poem a day for 365 days.

I got the idea from a playwright who had done something very similar: She wrote a play every day for a year.

I liked the boldness of that ambition. It seemed to me that it was the kind of goal that could change a life. It did for the playwright. One of the plays she wrote made her famous.

I have written poetry on and off my whole life, but never seriously. Maybe, I thought, I could improve my skills and even write some good poems this way. There were no guarantees, but I was optimistic that something good would come of it.

In revealing my personal goal, I recommended that AWAI students and clients set an equally ambitious goal related to their careers as future copywriters. I suggested that they read a new promotion every day. Or, if they were really gung ho, write one.

Many people who read that essay probably thought I was dreaming. "What's the point in making a resolution you can't possibly keep?" one person wrote me.

I was concerned - maybe even a little afraid - that the objective was too grandiose. And that I wouldn't follow through.

But I was also hopeful. The cleverness of the idea was the sheer size of it. By setting a super-sized career goal, I thought, maybe one could break through a lifetime of failed smaller objectives. A XXX-Large sized New Year's resolution might be big enough to crash through whatever psychological barriers that were holding one back.

That was the idea. And guess what? It worked for me. I did write 365 poems in 365 days. I skipped a few days when I was busy traveling, but I made up for them when I had spare time. Many of the poems I wrote were only a few lines. (I employed some Japanese stanzas - 3 and 5 lines - when I was far behind.) And many weren't very good. But at the end of the year I had more than 100 poems that were - according to a few editors I sent them to - good enough to publish.

So that's what I'm working on now: publishing them in literary journals and collecting them for my first book of poetry. It feels good to have accomplished this goal. It feels great to have improved my skills as a poet.

This brings us back to you. Did you read that essay? If so, did you set a goal?

If so, I would really like to hear about it. I'd like to know, in particular, how tough it was, how you coped with whatever setbacks you encountered, and what you gained from the experience.

If you took my specific suggestions and set reading or writing goals, tell your fellow blog readers how the experience improved your career. Are you more confident now? Tell us about it.

If you did not make a gargantuan resolution last year, why not make one for this year?

You know how quickly time flies. And with every passing year, it will move more quickly. Seize the day, as they say. Capture the moment. Make 2008 your year for taking a quantum leap forward.

If you missed that little essay, here is a part of it:

How did the playwright do it?

Did she wake up early every morning and get to it and not stop until she was done? Did she work on other projects first (she is also a screenwriter and novelist) and then get to her plays at night?

And how much did she write? According to the article, some of the plays were "only a few pages long" - but that's still an amazing accomplishment. She gave herself an almost unthinkable goal ... and went ahead and accomplished it.

But she did it smart. She didn't put a minimum length on each play. She let each one take its own length. That's a clever way to approach doing something great.

But it can be done by doing what she did: by narrowing the scope of the goal and focusing on quality rather than size.

Here are some other "unthinkably" big goals to consider:

Learn a marketing secret a day.
Read/scan an educational book a day.
Write a story a day.
Study a promotion a day.
Analyze a stock a day.
Make a sale a day.
Contact a potential customer a day.
Recite a poem a day.
Call/write a friend a day.
Practice a speech a day.
Sing a song a day.
Practice a musical piece a day.
Exercise intensely each day.

The Ready, Fire, Aim Buying Frenzy

2008-01-07T15:32:00.000-05:00

When I left work on Friday, my new book Ready, Fire, Aim, had just launched that morning. It was 120,000 on the Barnes and Noble website and placed similarly on the Amazon bestseller list. When I woke up this morning we were #6 overall on Amazon and #1 in the business and investing category. On BN.com the book moved up the list steadily, from #43 on Sunday afternoon to #21 this morning. Apparently we got strong endorsements from two big publishers, the Daily Reckoning on Sunday and CenterPointe on Friday. I'm among the 500,000 subscribers to Daily Reckoning, and I read it every day with great interest. CenterPointe has a unique approach to personal growth, a subject that, as you know, I'm very interested in. So I appreciate that they both felt Ready, Fire, Aim was worthy of their reader's time. I'm certain their help played a major role in this weekend's buying frenzy for my book.

I should also mention that Friday the Early to Rise team started another promotional effort for the book launch. It's a viral video contest in which readers will submit videos featuring the book. They're competing for a business lunch meeting with me and MaryEllen, the superstar CEO of Early to Rise. The Early to Rise team put together a fun video to get things rolling. Visit the events page on my website to see the video and for more details on the contest.

This contest is something we haven't tried before, and I'm very curious to see what will come out of it.

Finally...Ready...Fire...Aim is Out!

2008-01-07T13:37:00.000-05:00

My new book, Ready Fire, Aim: Zero to $100 Million in No Time Flat! is my sixth or seventh book. But it's still exciting - seeing it on the shelves. I hope it sells well. It is a good book, I think. In many ways my best book.

Ready, Fire, Aim contains just about everything I have learned about starting and growing entrepreneurial businesses. It exposes the biggest myths about business, such as:

That successful businesspeople are careful planners

That you need a lot of money to start a multimillion dollar business

That luck is a big factor in success

That having confidence or connections is necessary

There is so much "good" advice out there from business writers and teachers who have never had their own business. There are so many platitudes you hear about business that sound good but don't actually change anything.

Ready, Fire, Aim doesn't have all the answers - no one book could - but it has dozens of proven strategies for going from zero to millions in no time flat. That sounds like marketing copy. Well, it is marketing copy. But it's true.

The book is based on a business retreat I ran last year, in 2007. Thirty successful entrepreneurs, the ETR staff and I got together at the Ritz-Carlton hotel in Manalapan, Florida and talked about how they succeeded, how they failed, what things they would repeat, what things they would do differently. We studied the success of a half-dozen business I had been involved in and compared them to the 30 that were assembled.

What emerged was a new way of looking at entrepreneurial growth: that there are four stages (infancy, childhood, adolescence and adulthood) and that every stage had its own unique problems, challenges, and opportunities.

We figured out what those problems, challenges and opportunities were. And then we tested our new theory against the reality of their actual experience. What we discovered was very exciting: no matter what stage of business you find yourself now, you can propel yourself to the next level by focusing on your biggest problem, dealing with your biggest challenge and seizing your biggest opportunity.

Ready, Fire, Aim explains what those problems, challenges and opportunities are and exactly how you can deal with them.

At the end of the symposium, we received the following comments:

After two and a half days I can tell you I would have paid twice as much to come here. It's really transformed our business.
-Diego Saenz, president of PetPlace.com, a resource for pet health and wellness

I think within the first couple of hours or by the middle of the first day I would say I absolutely got answers to problems that I was dealing with right then and there.
-Hans Johnson, partner in DaniJohnson.com, which provides success and business coaching, as well as seminars

We learned many exciting and profitable methods for contacting and growing our customer base as well as organizing and executing our business plans. It's been a great experience that I would certainly recommend it to anyone who has a business that they want to build beyond their wildest imaginations.
-Richard Frost, founder RE3W.com, an online commercial real estate tool

It was phenomenal. And not just a lot of snobby, intellectuals but people who had heart, people who really shared everything they had. It was just this whole spirit of giving and of sharing your knowledge, your expertise.
-Victoria Taylor, restaurant owner

That was gratifying. But what was much more exciting was when we began hearing back from some of the attendees who were telling us about the progress they were making

Most impressive of all, the ETR team used these secrets to jet stream their progress. In less than nine months, MaryEllen Tribby and her team brought up revenues 300 percent, from $8 million to more than $24 million!

And then we tested out these ideas again, in September at a boot camp in France for Agora Inc's top publishers. Again, the reaction was extremely positive. And since then attendees have reported startling growth...even from businesses that had stalled or were in decline.

Last month the ETR team sent out pre-publication copies of the manuscripts for comments. The response was heartwarming:

Ready, Fire, Aim asks the questions that every entrepreneur should consider prior to starting his or her own company.
-Robert Cox, author of The Billionaire Way

I have read so many "ivory tower" books that really don't give any practical knowledge, they're just rehashed theory. I can honestly and enthusiastically say this book doesn't fall into this category. It is full of practical step-by-step advice that just makes sense.
-Brent Jones, president of Affinity Lifestyles

I just finished reading Ready, Fire, Aim and I'm putting the strategies to work in my business immediately!
-Scott Martineau, founder and CEO of ConsciousOne.com

This is the Michael Masterson I've been waiting for. It will be read by business people 50 years from now.
-Porter Stansberry, founder of Stansberry and Associates

I read it cover to cover without stopping. I am buying a copy for every one of my employees.
-Julia Guth, executive director of The Oxford Club

There will be some people who will object to Ready, Fire, Aim because they find the writing too "enthusiastic" and/or "self-aggrandizing." There will be some who will write reviews saying they know all its secrets. "Tell me something I don't know."

My only response to them is that I hope they are enjoying lots of success in their ventures and I'm happy for them that they don't need my help. I have plenty of budding entrepreneurs who are interested in hearing my ideas and suggestions - people who want to learn what these 30 successful entrepreneurs were happy to pay $10,000 each to learn. And to implement the suggested strategies immediately, if not sooner!

Ready, Fire, Aim is written for them. For people who are already motivated and goal oriented and need only a few good, proven and powerful ideas to get them to the next level.

A Good Way to Start the Day

2008-01-04T16:12:00.000-05:00

The first thing I read today - a handwritten note that was at the top of my inbox - came from Jeffrey J. Fox, the best-selling business author. He thanked me for sending me a copy of Ready, Fire, Aim: Zero to $100 Million in No Time Flat and said he thought it was a "great" book and hoped we would sell "a million of them."

That was a pleasant way to begin the day's work. It made me think: it would be good for the blood if one could start off each day with an upbeat message of some kind. At ETR we receive written compliments all the time. Why not have one of them printed and sent around to our staff first thing each morning? Or at least every Monday morning. Better than an overdue bill.

Back to Jeffrey J. Fox. Ever since I first read How to Become CEO I was hooked on his little books: chock full of good advice that only someone who understands business from the inside could provide. Academy award winners often say that what they like best about the Oscars is that are bestowed by their fellow practitioners. That's how I feel about getting accolades from the likes of Jeffrey J. Fox.

And they are coming in. So far, we've heard very flattering comments from Porter Stansberry, Bill Bonner, Julia Guth, Katie Yeakle, Robert Ringer, Jay Abraham, Joe Vitale, Brian Tracy, Richard Frost, Ron Tucker, Brent Jones, Scott Martineau, among others.