How to Deal With Manipulative People

(By Ryan Murdoch, extracted from a two-part article first published in Early To Rise at the following website:
Part One - http://www.earlytorise.com/how-to-deal-with-manipulative-people/
Part Two - http://www.earlytorise.com/how-to-deal-with-manipulative-people%E2%80%93part-two/)

How to Deal With Manipulative People–Part One

Following your life's purpose with single-minded devotion is a challenging task at the best of times. But it's even harder when faced with people who try to impose their priorities on you in an effort to benefit from your work.

In a prior Early to Rise article about Simplifying Your Life, I talked about removing those things from your life that pull you off track and prevent you from working toward your goals. That includes those people who drag you down, who you spend time with out of sheer obligation, who prey on your good nature, or who pull you back into bad habits when you're trying to change.

You're going to need that support as you go forward on your journey, because not everyone has your best interests at heart. I must warn you, today's topic is a dark one. And I'm going to be very blunt about it.

There's another obstacle in the path to your success that can be much more difficult to deal with...

Today I want to talk about a personality type I call The Manipulator. I'm sure you've encountered this character before. Not content to pursue their own path while you pursue yours, The Manipulator imposes on your time and resources to serve their own ends. They co-opt your labor, play on your emotions and try to impose their worldview and philosophy on you.

We'll look at several common examples of The Manipulator. And I'll give you a few strategies you can use to keep them out of your life.

So who are these shadowy figures that hide in plain sight?

If you've ever worked in a company or an office, you know the type. It starts with "I need to talk to you. It won't take long." And it usually concludes with an "urgent" request for you to do something to help them out. Something that imposes on your time, that takes you away from your own work, that they need you to do right now, and that adds a burden while giving you nothing in return.

This is not the same as asking a favor of a friend. We help our friends out of a genuine desire to do something good for that person. And when we ask a friend for help, we're reaching out to someone we know is looking out for our best interests. It's mutual and it's genuine.

The Manipulator's "requests" are very different from this. They involve coercion. And with The Manipulator, if you give in you send a signal that you're willing to do more of the same.

Before you know it, you're working weekends and staying after hours, putting in time to further someone else's agenda while totally neglecting your own purpose and goals. Step by step, these people take over your life. You're especially at risk if you have a strong work ethic and sense of responsibility, or if you hate seeing work left undone.

Another major area where manipulation has been raised to an art form is, of course, the family. I'm not suggesting that all families involve such power struggles, of course. It's just a typical pattern when things go wrong.

The family is often the realm of the Passive-Aggressive Manipulator. This type masters such tactics as The Sulk, The Huff, and above all, Poor Me.

They browbeat you into submission by making it easier for you to give in to their demands than put up with their constant level of low-grade psychological warfare.

If you've ever heard a phrase like, "I'll never have any grandchildren and I'm gonna die alone!" then you've seen this tactic at work. Or how about, "If you loved me you wouldn't make such a big deal of helping me with this" —immediately placing refusal on the side of not loving or caring about this person. Okay, the first example was a bit of a joke and an imitation of my mother at Christmas dinner. But how many unhappy couples have you seen playing out some variation of the second example?

Unfortunately, there's no arguing or reasoning with a Passive-Aggressive Manipulator. They don't respond to logic, and they change sides and arguments at the drop of a hat. Their chief goal is to get you embroiled in conflict in the first place. Swallow your reply, nod politely, and go about your work. Oh, and good music and headphones help to block out the huffs ;)

There are other types of Manipulator too, but they all have a few things in common. They use emotion to lure you in. They play on your sense of obligation or duty. They're experts at guilt. And they all have an agenda that involves you doing something for them. Once they've drawn you into their world, it's very difficult to put things in perspective and see the relationship for what it is.

If you're reading Early to Rise, then you don't have time to waste on these sorts of games. You've got dreams to fulfill, projects to complete, and exciting visions to bring to reality. And unlike the manipulators, you're doing it through the sweat of your own brow–and with the help of others who pitch in because you're adding value to their lives.

So how do you smoke out these sneaky time wasters?

I'll tell you exactly how to spot The Manipulator in Part Two. And I'll give you a set of strategies you can use to protect yourself and your business. Stay tuned...

How to Deal With Manipulative People–Part Two

In Part One of this article I introduced you to a personality type I call The Manipulator: a covert operator who imposes on your time and resources to serve his or her own ends. If you didn't read Part One I strongly advise you to have a look here.

Today I'm going to tell you exactly how to smoke out these sneaky time stealers.

How to Spot a Manipulator

Here are some common warning signs that will help you spot the manipulators in your life:

– Manipulators use a lot of "I" focused language. "I need you to do this" or "It would really help me if you did this." They rarely consider how to give value back to the person they're asking for favors.

– Manipulators use a collective "we" that really means "I." Try translating what they just said by substituting "I" for "we". If all the benefits that will supposedly help the group, team or community really end up profiting that person alone, you've just spotted an attempt to manipulate you.

– Manipulators "size you up" to assess where you're vulnerable. They use this to determine which tactics to use against you. Strong work ethic? You can be manipulated through your sense of duty. Empathetic? They can make you feel sorry for them. Intensely loyal? They'll use that sense of friendship to their advantage. Just remember, the problem is NOT that you're loyal, caring or a hard worker. The problem is the person who uses that to manipulate your thoughts and actions. Most people don't stop to think that their strengths can also be a weakness. But your strengths and values can be used against you because they make your behavior predictable.

– Manipulators make a big show of talking about how dedicated they are to serving others. According to George K. Simon, author of In Sheep's Clothing, they use the "servant role" to cloak a self–serving agenda in the guise of service to a more noble cause, for example acting in a certain way out of "obedience" and "service" to some authority figure. I've known a few incredibly genuine, spiritual, charitable people in my time. They spoke at great length about those they wanted to help, the needs they were trying to meet, the good works they hoped to do and the resources it would take to accomplish their vision. But I never once heard them talk about themselves or how devoted they were to "service."

– Manipulators often make a great show of their humility, and they take any opportunity to remind you of it. This makes them look harmless, and like they're "only trying to help." Have you ever heard the Dalai Lama talk about how humble he is? Me neither.

– The frustrated Manipulator often drags a history of drama in their wake: broken friendships, failed partnerships, stories of sabotaged projects and detractors lashing out at them from every dark corner. They love to tell you all about these things, sorrowfully and with a pious expression, in order to play on your sympathy. And despite the obvious pattern in these incidents, Manipulators never take responsibility for their behavior. It is never their fault. Someone has always betrayed or taken advantage of them.

– Manipulators rationalize. Their explanations seem to make sense. And you want to believe, because honest people want to believe that others are honest too. But their story never holds up upon further reflection. Up close, it's filled with obvious inconsistencies and holes.

– Manipulators flatter you. They pretend to like the same things you do. To believe the same things you believe. To hold the same values. They ingratiate themselves very subtlety in an effort to win your loyalty, so you'll want to help them. Watch them with a totally different group of people and see them do the same thing. They have a history of swapping beliefs and convictions the way hikers change socks.

– Manipulators make a point of telling you how honest they are–right before they rake you over. Honest people don't need to drone on about their virtues. Their actions and integrity speaks for itself.

This list is not exhaustive, of course. And not every red flag will be present in each case. But it does send a clear warning. If you encounter any of these behaviors, be on your guard.

How to Protect Yourself–And Your Dreams

Unfortunately there's no easy answer to this. Expert manipulators are good at pressing your buttons, and if you have even a shred of compassion you won't be impervious to every form of guilt.

In a work setting, I think the key is to set clear priorities and goals–and stick to them. Master the phrase "I'm not available right now." Defend your territory from the beginning, because once you give in it sends a message that you can be worn down. If you answer the phone on the 15th ring, it doesn't send the message that you're busy and don't want to be bothered. The Manipulator interprets this as "It takes 15 rings to get him to answer."

You must also be very clear about your own personal values. Think about them. Write them down. Stick to them. Having a clearly thought out code of conduct makes on–the–spot decisions much easier. If something conflicts with your code or your purpose, don't do it.

And that brings us to the next defense. Learn how to say "no." It's healthy to have boundaries and to know what you stand for. If you feel bad about turning someone down, you're a prime target for a manipulative personality. Remember: "I'm already committed, I'm not available right now." Manipulators have no power over you unless you give it to them.

Don't engage, and don't explain. The manipulator will try to call your values into question and put you on the defensive. You have no need to defend yourself, and you've done nothing wrong. You're free to follow whatever path you choose. Don't forget this when the pressure is on.

And what about those manipulators who operate closer to home?

It's a lot more difficult to set clear boundaries when it comes to close personal relationships, because you can't remove yourself from the situation or just stop interacting with them. In my experience, the best thing you can do is communicate your intentions clearly and firmly. And then stay true to your word. You'll have to ride out some flack regardless, but the Passive–Aggressive Manipulator will move on to easier targets if you consistently stick to your guns. 

Above all, never feel guilty when dealing with these people. You never have to apologize for following your dreams and working hard on your goals. You never have to make excuses or justify your decision when you say "no". And you should never feel bad for refusing to drop or postpone your most cherished dream to contribute to someone else's purpose.

And that's what it comes down to in the end. Your best protection against guilt is having a clear, strong sense of your purpose.

I remind myself each day that life is short. That I have only a limited amount of time in which to fulfill my dreams. That time spent on other things is time taken away from the fulfillment of my purpose. I take full responsibility for my life, my choices, and my success. And I keep my eye on the road ahead, and get back to work.

NB: Ryan Murdock is coauthor of the Shapeshifter Body Redesign program. When not helping people rediscover the body of their “glory years,“ Ryan travels the world’s marginal places as Editor-at-Large (Europe) for Outpost magazine. Ryan's work has also appeared in Alo Magazine, the anthologies Traveler's Tales Central America and Traveler's Tales China, and Toronto’s Eye Weekly. His Outpost feature "Taklamakan: The Worst Desert in the World" was nominated for a National Magazine Award in Canada.

Early To Rise: A Self-Made Millionaire's Guide to Dealing with Debt

(By Mark Ford, Editor of The Palm Beach Letter: http://www.palmbeachletter.com/)

I had my first serious run-in with debt when I was 30 years old.

My wife K and I were renting a condominium in Washington, D.C. Our landlady came to us with an exciting opportunity: We could buy the condo for $60,000 with no money down. For just $100 a month more than what we were already paying for rent, we would be paying a mortgage. It sounded like a great deal, so we took it.

What we bought was a negatively amortizing mortgage with a three-year term and an 11% interest rate. That meant, every three years we were paying $19,800 in debt service and another $3,000 in closing costs.

We didn't realize what was going on because our monthly payments were only $550. I was too foolish then to ever ask myself, "What is the cost of this debt?"

I tried to find another bank to take me out of this scam but none would. The mortgage we had signed was not backed by the government (Freddie Mac/Fannie Mae), which meant that no other bank would touch it.

I learned that when banks make it easy to borrow money, it's not because you are a nice, deserving person. I learned that if you can get a loan despite poor credit (as ours was at the time), there is usually a scam involved. It also taught me to always ask the two critical questions about debt, "How much will it cost?" and, "Can I afford it?" It was an expensive lesson.

Many of us view debt as a necessity. We buy homes with it. And cars. And boats, and toys, and vacations. Some use it to buy the basics: clothes, food, and furniture.

Debt is not necessary. It is a luxury. Sometimes debt is useful. Sometimes it is wasteful. But debt is always dangerous.

It is unnecessary because there are always less expensive ways of getting what you want. And it is dangerous because it can sometimes be very expensive.

Let me give you two examples.

Let's say that, like most Americans, you are in the habit of buying things with credit cards. After a while, you notice that you have accumulated $30,000 in total debt. You decide to cut up your cards and repay your debt. You can devote $400 a month to paying it back. How long will it take, and how much will it cost you?

The answer may surprise you. Assuming an interest rate of 10%, it will take you 10 years to pay off the credit card debt. And your total payments will be $47,275. Of that, $17,275 will have been in interest payments.

Or let's take a $150,000 home on which you take a $120,000 loan with a 6.5% interest rate over 20 years. The mortgage payments are $894 a month, which you can afford. But how much will that house really cost you? Including interest payments? You will end up paying $244,725 for that house. Almost 40% of that – $94,725 – will have been to interest payments.

The commercial community (bankers and manufacturers) doesn't want you to be afraid of debt. And neither does the government. These institutions want you to like debt. They want you to use it. They want you to go into debt because it is good for them.

When you take out a mortgage to buy a home, or sign a lease on a car, or use credit cards to pay for your lifestyle expenses, the commercial community profits. The manufacturers make money on products you may or may not need. And the banks make money on your debt.

The mainstream financial media rarely talks about the dangers of debt. That's because they make their profits from the financial institutions and manufacturers whose advertisements support their publications.

And the government actually encourages its citizens to take on debt. This was the recommended strategy for getting us out of the Great Recession that the (second) Bush administration (and the Federal Reserve) advocated and it's the same scheme that Obama's people are advocating today.

Here's what you should know about debt:

As a general rule, you should live without it. You should find less expensive ways to acquire the things you need.

Unless you are wealthy, don't lease your car. Buy it. Buy the car you can afford, not the car you believe will make you happy. Any non-appreciating asset (such as a car) will never make you happy if you have to pay its debt service. I didn't buy my first luxury car until I was a multimillionaire.

Don't buy anything with a credit card. Keep only one credit card for renting cars. Use a debit card to buy clothes and groceries. If you don't have enough money in your bank account to use your debit card on a purchase, don't buy it. If you don't have enough money in the bank to buy something, it means you can't afford it.

If you can't afford the debt on your house, sell it (if you can) and buy something cheaper. In any case, start paying off the principle balance of your house (the amount you owe, not the interest you will owe) as fast as you can. Make it a goal to own your house free and clear as soon as possible.

If you have debt, pay it off as fast as you can, but not before you have filled up your bucket for emergency savings. By emergency savings, I mean money you will need to pay your bills if you lose your job. Six months' income is what some financial advisors recommend. I'd recommend a year. It may take you that long to replace your lost income.

Pay off your debt even if the interest rate is low. In theory, you should put your extra money elsewhere if you can earn more on it than you are paying in interest. If, for example, you can get 4% in municipal bonds and you have a student loan at 2%, it makes more sense to buy municipals bonds and pay your student loan off slowly. But in reality, the extra 2% you are earning on the spread is not worth the risk in carrying the debt.

When I started earning money, the first thing I did was get rid of that terrible loan on the condominium I told you about earlier.

The next thing I did was pay off the mortgage I took on a home. I paid it off in two or three years, even though it was a 30-year mortgage. I loved the idea of owning my home free and clear. So I put every extra dollar I had toward paying down that mortgage. The bank didn't like it, but the day I tore up that mortgage... I felt like I had been emancipated from financial slavery.

Finally, if you are troubled by debt, know this: you can get out of it just as I did.

Early To Rise - Winner Take All? The Yin and Yang of Negotiating

(By Michael Masterson)

Sid had done it. He had convinced the IRS agent to forgive the mistake my partner Joel and I had made. He had spent three weeks with the guy, working mornings, golfing with him in the afternoon, and taking him out to dinner.

If the IRS had stuck to their ridiculous position, it would have cost us $10 million. But Sid's logic and diligence and charm had persuaded one of its bulldogs to do the right thing.

A month later, Sid's bill crossed my desk. It was for $85,000. "That's odd," I thought. "I could have sworn Sid was billing us by the hour."

Had he done so, the bill would probably not have exceeded $15,000. Still, $85,000 was a small price to pay for the service he had provided. I signed the invoice and sent it on to my partner.

The next day, Joel called me into his office.

"You saw his bill."

"Yes, I signed it."

"I saw that. But you know he was supposed to bill us by the hour."

"Yes, I know. But what he did was worth a lot more than eighty-five grand."

"Maybe so, but that wasn't our deal."

I shrugged.

"We have to bring him in and negotiate his bill."

"Okay."

"But we have to plan this thing. We have to rehearse."

"Plan? Rehearse? I don't get it. You are the best negotiator I know. Everyone in the business is afraid to negotiate with you. Why do we need to plan for Sid?"

He shook his head. "You don't know Sid," he said. "He taught me to negotiate."

Three or four times over the following week, Joel and I rehearsed our lines. Joel was going to take the strong line. I was going to be the objective outsider.

When the day arrived, Joel had a small wooden stool placed in front of his desk.

"That's where he'll sit," he told me.

The only thing missing was a spotlight.

Sid, 75 years old and about 110 pounds at the time, sauntered in wearing his tennis togs. His bony knees and skinny calves almost broke my heart.

"Have a seat," Joel, said, motioning to the wooden stool.

Sid sat. And then we began our practiced pitch. First Joel. Then me. Then back to Joel again. All the while, Sid sat there like a deer caught in the headlights. His eyes were wide. His flesh was white. His hands seemed to tremble.

Surely we were killing the old man, I thought. This was the cruelest thing I had ever done. Surely I would burn in hell.

But we persisted. And Sid said nothing.

When it was all over, he just stared at us for a full 30 seconds. And then he said, "I have only one question for you, boys."

We said, "What is that?"

And he said, "Did you think $85,000 was the entire bill?!"

I swear. That's what he said.

We spent the next 45 minutes negotiating. And we settled at $115,000.

Sid taught Joel to negotiate and Joel taught me. Sid and Joel viewed negotiating as a contest of power. The object was to gain as much of an advantage as you could by using every means at your disposal.

And Then I Met Bill

I've read many books on negotiating that advocated that same approach. But it never felt comfortable to me. I didn't understood why until I became a colleague of Bill Bonner.

Bill Bonner, as you probably know, is the founder and CEO of Agora Publishing.

Agora has been my primary client now for more than 15 years. During that time, I've seen it grow from a handful of employees with revenues of $8 million to a worldwide publishing powerhouse with nearly a thousand employees and revenues in the $400 million range.

I have witnessed Bill negotiating at least two dozen times. But I have never seen him do any of the clever things Joel taught me. When you negotiate with Bill, you have one of two conversations:

Conversation One:

Bill: Well, Frank, How much do you want for it?

Frank: Oh, I figure it's worth about $X million.

Bill: Well, Frank, that seems reasonable to me.

Conversation Two:

Bill: Well, Frank, How much do you want for it?

Frank: Oh, I figure it's worth about $X million.

Bill: Gee, Frank. I'm sorry but I don't think I can pay that much.

End of conversation.

I'm not kidding.

The amazing thing about Bill's low-key approach to negotiating is how well it works. People in the industry know that (a) he will never bully them, (b) he will never cheat them, and (c) he isn't a fool.

The difference between Bill's way and Joel's way is the difference between yin and yang.

The Yin Negotiator wants to achieve a mutually beneficial relationship. He is looking for a long-term partner so he doesn't care about short-term advantages.

The Yang Negotiator is not interested in the long-term. He sees his negotiating counterpart as an opponent, and believes that success comes one victory at a time.

How Much Yin and How Much Yang?

When negotiating a deal, how hard should you push for an advantage?

Should you play the competition game and get as much as you can? Or should you take a softer approach and "take care of" the other guy, even if he isn't taking care of himself?

What should you do if you discover a benefit or cost in the deal that the other guy isn't aware of? Do you bring it up? Or figure "If he's too stupid to notice, he doesn't deserve to know."

Let's answer these questions today.

When you think of business as a war and arm yourself accordingly, you can win plenty of battles. But as the years roll by and the battlefields change along with technology, all military approaches - however clever or powerful - fail.

Yes, you can fight your way to the top of the mountain when you are young and strong. But nobody stays on top forever.

Remember that old saw: Be nice to the people you meet on the way up, because they will be the same ones you meet on the way down.

So long as you maintain an edge, you can take advantage of it. But the minute you lose ground, you will slide onto a slippery downhill slope - greased by the bitterness of the many people who secretly resent you for past transgressions.


More important, perhaps, it takes a great deal of energy and cunning to do business as a Yang Negotiator. You must work just as hard for the next deal as you did for the last. However, when you negotiate with yin principles, you create trust. And trust makes it much easier to do good deals as time goes by.

The Yang Negotiator's view of the world is based on at least two fundamentally faulty ideas. One is that power is static: He who is stronger now will be stronger in the future. Another is that wealth is a commodity: It is something limited as opposed to something organic that can grow.

Mother bakes an apple pie. She cuts it into four pieces, one for each of her children. Since Mom has not used a protractor along with her knife, the pieces are not exactly the same. "I will be better off if I get the largest piece," the Yang Negotiator thinks. So he abandons his manners and grabs for it first. He gets the biggest piece but loses the trust of his siblings.

The Yang Negotiator thinks he is smart, but actually he is half-blind.

He doesn't realize that Mom will be making lots more pies. And when she does, the other children will remember that he had the biggest piece the first time. If he is bigger and stronger than they are, he will keep "winning" for a while. But Mother Nature has a surprise in store for him. His peers are going to start to become faster than he is. And then he will get the little piece. Or he might even go hungry.

When I get into a deal, I don't want the other guy to feel as if he's been taken advantage of. I don't want that to happen for three reasons - two of them practical and one philosophical.

First of all, I believe that someone who feels he's been bested by me will quietly assign an emotional marker to my butt that says "You'll get yours one day."

Second, I believe that if I get known as a tough guy to do business with, the number of people who will bring me good deals will diminish and the pool will eventually dry up completely.

And, finally, I think that, in the great scheme of things, everything eventually balances out with interest. If I give you something today, I'll get something back from someone - plus interest - some years hence. If I take something from you now, I'll pay the price for it - with interest - in the future.

If you see things the way I do, you really, really don't want to take advantage of anyone. You'd rather be the one taken advantage of.

From what I've said, you might conclude that I discount what Joel taught me in favor of Bill's way. But the truth is that I have applied lessons from each of them. My overall strategy is definitely yin. But I do sometimes use yang tactics when I believe they will help create a fairer deal (fairer to both of us.)

For example, I never go into a negotiation unprepared. (Joel taught me that.) I always spend time thinking about what I want from the deal. But instead of simply imagining how much I can get, I think long-term. If this deal turns into a lifetime relationship, how much can I get from it?

I also spend as much time - sometimes more - thinking about what the other guy wants. I imagine what he may want in the short-term and what he could get if we had a relationship that lasted many years.

I make a mental note of all these things. Sometimes, when it is complicated, I write them down.

I also spend some time thinking about what would happen if the deal did not take place. I try to visualize it as clearly as I can. I try to imagine how I would feel.

If I sense that I will be very disappointed, I come up with a Plan B. (I've written about Plan Bs many times in the past, including last week.) By devising a Plan B, I can go into the discussion knowing that if we can't agree I won't care. Not caring is the most valuable asset one can have in negotiating. Joel taught me that.

Now back to the questions I posed before:

Question: When negotiating a deal, how hard should you push for an advantage?

Answer: Don't push at all. Make your case as clearly as you can. Show your counterpart how the deal will benefit him. But if he doesn't agree, walk away.

Question: Should you play the competition game and get as much as you can? Or should you take a softer approach and "take care of" the other guy, even if he isn't taking care of himself?

Answer: See above.

Question: What should you do if you discover a benefit or cost in the deal that the other guy isn't aware of? Do you bring it up? Or figure "If he's too stupid to notice, he doesn't deserve to know."

Answer: You are interested in a long-term relationship. Tell him about his oversight. Reap the benefit of the trust that will engender.

Some of my friends tell me that I am too "nice" when it comes to making deals. When they hear that someone I've helped get rich does something chintzy to me, they scold me and tell me to get tough.

But none of these doubters have enjoyed as much success as I've had in business. And none of them have as many longstanding positive business relationships.

There is a way to negotiate well without being a bully. And there is a way to win without seeing the world as a contest over getting the biggest piece of a pie.

By taking a long-term approach to negotiating, wealth and success will come easier and easier. That seems to me to be a smart way to do business. Don't you think?

Early To Rise - Controlling Your Emotions During Tough Markets

(By John Nyaradi)

All year, investors have been fleeing the stock market for the perceived safety of the bond market, letting fear take control of their investing and financial future. But if you can learn to control your emotions, today's equity markets offer enormous opportunity.

Your biggest enemy for successful trading is not the "market," other traders or investors, the economy, or any outside force. You face your biggest danger in the mirror every morning, because your biggest danger is you -- your emotions and the human frailties that can easily lead to your financial ruin.

How many times have you read that the average investor has an uncanny knack to buy at the top and sell at the bottom? It's true -- and it's sad. People tend to chase bubble fads and the latest "hot" investment. And when they do, they invariably get burned.

More of us need to be like Warren Buffett and train ourselves to "be greedy when others are fearful, and be fearful when others are greedy."

Greed, Fear, and the Herd

Greed and fear are the two primary driving forces behind most investor decisions. Because though much has been written about markets being rational and investors making rational decisions based on earnings reports, price-to-earnings ratios, or technical analysis, the fact is that markets are not rational, as witnessed by the stock market's recent wild gyrations.

We've seen incredible global volatility, a flash crash, strong short-term rallies and declines -- and there's no rational reason for any of this in terms of corporate profits, economic reports, or political events. The explanation for what's happening in these crazy times is very simply that greed and fear are driving today's markets in very powerful and extreme ways.

Greed is simple to understand. People want to make money. But fear is a little more complex in that there are really two types of fear: fear of loss, which we all understand, but also fear of being left behind.

I believe a key to investment success is learning to control your greed and your fear.

You can control both of those emotions by following these rules:

• Do not overtrade. In the search for better results or to limit loss, investors tend to overtrade and so wind up paying too much in commissions or getting whipsawed by short-term market gyrations.

• Do not take on too much risk. Greed causes investors to take on too much risk, either through options, leverage, investing in risky companies, or by taking positions that are too large.

• Do not look back. Successful traders don't go back and look at trades they have sold to see how they "would've done." When a trade is over, it's over. They don't do a postmortem to see if they were "right" or "wrong" about the market.

• Do not sell your winners too soon. When you sell too soon, you miss out on further gains.

• Do not hang on to losers too long. Most investors find it's hard to admit they were "wrong," and so lose more than they should or could. Ego plays a big role here. People want to be right. But "Hang on, it'll come back" is not an investment strategy. Just ask anyone who still owns some of the darlings of the dot.com boom and bust.

• Keep your ego out of your trading. Pride in a good trade is as harmful as shame or anger or grief over a bad trade. Some trades will go well. Some trades won't go well. It has nothing to do with the investor's intellect or self worth.

• Find a good plan and stick with it. A great batter in baseball only succeeds four out of 10 times at the plate. Investing is a marathon, not a sprint.

To be successful, you must use a trading system that suits you. It must fit your personality, your lifestyle, and your goals. A day trader, for example, is a totally different animal than a buy-and-hold investor.

Once you recognize who you are, you must apply discipline to your trading activities by having a written plan that you stick to unrelentingly. You must learn your market inside and out and become a specialist, not try to be an expert in all things. Today's markets are much too fast complex for anyone to be a generalist. Be a one-trick pony, and make it a very good trick.

I can tell you from personal, painful experience that if you violate the above rules, your chances for investing success are slim at best.

I've made all of the mistakes I mentioned at one time or another -- and, almost invariably, it's cost me money. The "trading gods" just seem to know when you violate the rules, and then smack you down for your transgression.

When I look around at people I know and have worked with who've made these mistakes, they, too, have usually lost money.

I know one guy who has lost money for three years running who spends his weekends watching the talking heads on financial television. By Sunday evening, he's so confused that he doesn't know where to turn. Recently, I watched one of the weekend talk shows for a few minutes at SeaTac International Airport between flights -- and I could almost feel the paralysis start to set in.

I know a woman who skips from advisor to advisor, managing to lose money with each one of them -- and she can't figure out why. I know more people than I care to count who trade by the seat of their pants or on a hunch or based on a tip that they read or heard about in the financial media. Frankly, they'd have about the same odds of winning and a lot more fun if they went to Las Vegas instead.

The bottom line is this: Trading and investing in our current climate is tough. Like the old saying goes, "Trading isn't rocket science, it's harder."

You can be like the herd, the "sheepies" who have fled to the bond market and are in the process of creating another bubble there. Or you can be different, a contrarian, and deploy a professional, unemotional trading plan that can take advantage of today's unique opportunities.

The choice is yours.

P.S. John Nyaradi is the publisher of Wall Street Sector Selector, an online newsletter specializing in exchange-traded funds (ETFs), and the author of Super Sectors, How to Outsmart the Market Using Sector Rotation and ETFs.

Early To Rise - The Ultimate Customer Formula

(By Noah St. John)

Customers are the lifeblood of your business. Without customers -- people who buy your product or service -- you really don't have a business, do you? Duh!

Ask any business owner, and he'll tell you he wants more customers. Yet I say that you DON'T want more customers. What you want are more Evangelists.

What's an Evangelist? In this sense of the word, I mean someone who not only buys from you but tells everyone within earshot (and e-mailshot) how great you are.

There are three kinds of people who buy from you:

1. Customer = someone who simply buys from you
2. Referrer = someone who tells one or two people about you
3. Evangelist = someone who tells everyone about you

So how do we move people from Customer to Referrer to Evangelist?

By using The Ultimate Customer Formula:

Want + Trust = Customer
Want x Trust = Referrer
Want x Love = Evangelist

Let's start with why someone becomes a Customer in the first place.

First, a person has a Want -- something they desire. It could be to alleviate a PAIN or to increase their PLEASURE. That pretty much covers human Want.

Then they find out about you (through something called marketing). And something they read, hear, see, or experience in your marketing makes them Trust that you will deliver to them the fulfillment of their Want.

If you do what you said you would do -- help fulfill their Want -- they are satisfied with their purchase. They are now your Customer because they Trust you.

So what do you do now?

That's where most businesses fail. They go, "Whew, we got another one. Okay, where do we get the next one?"

But don't you get it? You can get your next Customer -- or dozen Customers -- from that first satisfied Customer!

How? Simple: Make them feel good about their purchase. Ask if there's anything else you can do. See what else they need or want -- that they may not even have thought of. Ask questions that no one else is asking.

Or just be so much better than the other guys that your Customers have no choice but to choose you to fulfill their Want.

Let me give you an example...

I love Southwest Airlines. Why? There are dozens of reasons, but the most important one for me is that when I need to change a flight, I simply call their toll-free number and an ACTUAL HUMAN BEING picks up the phone and says, "Southwest, how can I help you?"

Then I change the flight and there is NO service fee! What do you know? Southwest treats my money as MY money!

I've flown other airlines, and paid as much as $450 for CHANGE FEES. Ridiculous!

Do you see what I just did? I just told everyone who's reading this newsletter how awesome Southwest Airlines is. I went from Customer right to Evangelist.

If I felt so-so about Southwest, I might tell one or two friends. That would make me a Referrer.

But because I love Southwest, I tell everyone about them -- even when I'm flying on other airlines!

How did it happen? I have a Want -- affordable, reliable airline service to take me where I need to go, AND actual human beings who answer the phone, AND no fees when I need to change a flight.

From the very first time I flew Southwest, they not only delivered the fulfillment of my Want -- they OVER-delivered by thinking of ways I hadn't even thought of to make my travel better and easier, and by being a company of real live human beings.

So I emotionally moved from I Trust Southwest to I LOVE Southwest.

How fitting that their stock ticker symbol is LUV.

So here's The Ultimate Customer Formula again -- this time with the thoughts that go behind it:

Want + Trust = Customer

I want something and trust that you will deliver it to me.

Want x Trust = Referrer

I want something and trust that you will not only deliver it to me but that if I were to send a friend to you, you'd deliver it to them too.

Want x Love = Evangelist

I want something and not only trust that you will deliver it to me, you will over-deliver, take care of me in ways I hadn't even thought of, and you are a company of actual human beings.

That last part is particularly vital today. The word we see everywhere in marketing is transparency.

In the old days, you could hide behind a corporate shield and be immune to criticism. Those days are long gone.

People are amazed when I pick up the phone and call them to see if they're happy with their purchase, or personally respond to an e-mail they wrote me, or write back to them on my Facebook fan page.

My feeling is, why wouldn't I?

But the beauty is, very few of my competitors will ever pick up the phone and call people to connect with them.

Sure, it's more work for me. But it's work that I really enjoy doing. Plus, it cements me as the guy who actually CARES about how they're doing (which, as it happens, I do).

So, use The Ultimate Customer Formula and see what you can do today, this week, this month, and this year to move people from Customer to Referrer to Evangelist.

And isn't it amazing that the ultimate secret to success, yet again, is Love.

P.S. Noah St. John, Ph.D., is a lifestyle expert and #1 bestselling author of The Secret Code of Success: 7 Hidden Steps to More Wealth and Happiness. Stephen Covey says, "Noah's Secret Code of Success is about discovering within ourselves what we should have known all along -- we are truly powerful beings with unlimited potential." For a limited time, get the first 3 chapters of Noah's new bestseller, The Secret Code of Success, FREE at NoahStJohn.com (http://www.afformations.com/).

Early To Rise - Six Messages You Never Want to Send

(By John Forde)

Does your marketing copy send prospects a message you never meant to send? Let me clarify...
In selling -- particularly in face-to-face sales -- there's a lot of talk about body language and how it can mean all the world to a sale.

A chin rub means one thing. Steepled hands, another.

Crossed arms, something else yet again.

Bottom line: In the face-to-face setting, different gestures can betray messages you don't intend to send, but send anyway.

We, of course, are marketers and copyWRITERS.

Hence, not too much selling face-to-face. And not much opportunity to read the body language of our prospects. Once on the page... well, there it is.

Still, there are different things copywriters do that can also send accidental messages. And if you're not careful, these little slips can derail the message of your whole campaign.

For instance...

(1) "TESTI-PHONY-ALS"

Your testimonials are eloquent and effusive. ("I'm entranced by your product. I laughed, I cried. Sublime, utterly sublime.")

To convey a personal touch, or perhaps protect your customers' privacy, the names underneath your testimonials are signed only with a first name. ("Loved It, Chuck")

And the photos are gauzy professional shots, with people wearing pressed T-shirts and laughing like God just showed up at their picnic.

What You MEAN to Say:

"Our customers are smart. They're good looking.

They're overjoyed. And we're on a first-name basis with them (not to mention discreet)."

What It ACTUALLY Sounds Like:

"We couldn't really get good testimonials. So we wrote our own. Chuck is my cousin in Des Moines."

A Better Approach:

Give full names whenever you can. Used real photos of customers, even the ugly ones. And most of the time, resist the temptation to edit away poor writing in testimonial quotes.

(2) "YOU CAN TRUST ME, I HOPE"

You start your sales letter, "Dear Reader, let's be honest..." or pepper paragraphs with "To tell the truth" and "I really mean that." In your guarantee, you write, "You can trust me... I'm a gentleman."

What You Mean to Say:

"I mean what I say. And when I make a promise, you can bet I'll stand by it. I'm not like that other guy who sold you the bike with square wheels."

What It Actually Sounds Like:

"I'm worried you think I'm like that guy who sold you a bike with square wheels. My pitch sounds deceptive, so I subconsciously want to reassure you that it isn't. You do trust me, don't you?"

A Better Approach:

Root out whatever it is in your pitch or product that makes you leery. Good products make it easy to write truthfully and confidently. Whatever you do, cut the weasel warm-ups and just make the promises.

(3) THE "TION" THAT SHUNS

Your words are hefty and profound. You've never seen four syllables you didn't love. Not to mention what you'll do given five minutes in a dark room with a word processor and witty puns and word play.

What You Mean to Say:

"Aren't I smart?"

What It Actually Sounds Like:

"Aren't I pretentious?"

A Better Approach:

You've heard it often. But not often enough. Always, always use simple words. You're trying to call attention to the ideas, not to the words you've used to express them. Big difference.

(4) "DON'T HATE ME BECAUSE I'M BEAUTIFUL"

Your newest promo is printed on silk paper. With hand-etched four-color graphics. You've hired Japanese geisha girls to fold the letters and Peruvian mountain cats to lick each envelope closed. No expense was spared.

What You Mean to Say:

"I care about you, which is why I care about how this promo looks. If it looks professional, we'll look professional to you too. Or at least we'll look pretty damn hip."

What It Actually Sounds Like:

"I care more about how you'll think of me and my promo than I care about how what I'm selling can serve your interests. Look at me, look at me, look at me!"

A Better Approach:

Okay. First off, sometimes elegant DOES work. It depends on what you're selling. Membership in an exclusive club might call for high-ticket design. But imagine if you're writing a donation letter for a non-profit... or a pamphlet to sell a low-budget vacation to college students. Sometimes LESS really is more.

(5) "I CAN'T COMMIT"

"XYZ's Water-Matic might make a better cup of tea," says your pitch letter, "of course, there's no guarantee." The rest of the copy is littered with "coulds"... "cans"... and "shoulds."

What You Mean to Say:

"We don't over-promise to our customers. We're conservative, not rash like those hucksters down the road."

What It Actually Sounds Like:

"I'm not sure we can deliver on what I'm saying. And I don't want to look stupid if we fail. So I'm not going to commit to any of the promises you're reading here. In fact, don't call. I'm just going to go sit in the corner now and shiver."

A Better Approach:

True again, sometimes you have to be conditional in your speech. Lawyers recommend it. Nervous CEOs prefer it. But those reasons aside, wherever you can, use as many bold and confident words as you can. ("XYZ product tested as tops on the tea-maker market, 9 years in a row.") Write confidently and with conviction. It can only improve your results.

(6) "I'M A SUPER-EXCELLENT FAKER!!!"

Your copy bubbles over with enthusiasm and lots of really, really... really... awesome adjectives.

What You Mean to Say:

"I LOVE my product! It's the absolute BEST on the market. You couldn't find a BETTER product than mine even with a JILLION bloodhounds sniffin' the trail!"

What It Actually Sounds Like:

"I'm not sure WHY my product is good! I'm not even sure IF my product is good! I just want you to BUY my product -- is that so wrong?"

A Better Approach:

It's not your exuberance that's at fault. It's the lack of substance. Add case studies and stats to back up your claims. Plus customer stories and testimonials and a track record. The fluff will fade away.

The point is clear.

Be careful HOW you say what you want to say. Be especially on your guard when you're subconsciously writing copy under one of these two conditions:

Either
(a) you're trying to hide your own opinion from the reader, or
(b) you're trying to get the reader to think something about YOU, as well as the product, that might not be true or easy to believe.

In both scenarios, you're writing lines fraught with hidden meaning. Usually, the meaning you were trying to suppress. This is when your guard is dropped. This is when you'll make the mistakes that undermine your message.

And that's not good.

Be aware of them, root them out, avoid them altogether. The more simple and direct your message, the more successful you'll be, in the end.

P.S. To get more of John Forde's wisdom and insights into copywriting (and much more), sign up for his free e-letter, Copywriter's Roundtable. If you sign up today, you'll get $78 worth of free gifts -- including John's special "Power Brainstorming Toolkit" and his e-book "15 Deadly Copy Mistakes You Can Easily Avoid"... plus a third secret bonus. For details, see John's sign-up page at http://copywritersroundtable.com/.

Early To Rise - Respect at Work: If You Want It... Be Prepared to Give It!

(By Peter Fogel)

Remember the Tom Cruise movie Jerry McGuire? One of the great taglines in that film -- besides "You had me at hello" -- was when one of Jerry's clients kept saying, "Show me the money!"

But what did he do for that money?

He complained. That's right! All he did was bitch and moan about his teammates, his leaky roof, and other personal and financial problems.

Meanwhile, his coach thought he was too small for a wide receiver, and no one could stand his egotistical attitude when he was out on the field, blaming others for his poor performance during games.

He was excellent at the "blame game." If he missed the ball, it was because another player threw it wrong or because his fellow players and fans weren't giving him "love." So let me be so blunt as to ask:

Are You a Prima Donna?

Does this sound like anyone you know? Most every industry and company has its prima donnas. Don't take this the wrong way, but are you that person for your company?
Do you constantly gripe about your duties? Your hours? Your low pay?

"Why don't I move to India? On what they are paying me here, I could live like a king there."

Do you turn red in the face when someone else gets a promotion?

"Frank? FRANK GOT MORE MONEY for doing what?! I was hired two days before he was, for crying out loud!"

Be honest. All of us at, one time or another, have come unglued when things didn't go our way at the office. (It is, in fact, a good thing to vent on occasion.)

In my former life, before I reinvented myself, I LIVED to complain.

But you know what? In the long run, it never made me happier -- and it certainly NEVER got me what I wanted (more opportunities to advance, more money, etc.). It all boils down to this:

If you want to reinvent yourself in the workplace, you have to have respect for your company, your boss, your co-workers, and your job.

Never let on that you do NOT like what you are doing or that performing certain tasks are beneath you.

Common sense dictates that you should always be a team player.

That being said, people still shoot themselves in the foot when their bosses make requests of them.

According to Karen Burn, author of The Amazing Adventures of Working Girl: Real-Life Career Advice You Can Actually Use, there are seven things you should never say at work:

1. "This is easy! Anyone could do it!" A statement like this could be taken the wrong way. Perhaps your boss had the responsibility to do the exact same task before he was promoted. See where I am going with this? If it's easy, just say, "Hey, no problem. I'll get on it right now!"

2. "That's not my job." That might have gotten a big laugh for Freddie Prinze on the old "Chico and the Man" show. But it won't cut in today's workplace. If you don't understand why you've been asked to do a certain task, do a little investigating to find out why your boss wants you to do it. Chances are, he has a good reason.

3. "It's not my fault." If there's a problem, fix it -- no matter whose fault it is. If you did, in fact, screw up... own up to it and then come up with a solution as quickly as you can.

4. "It's not my problem." If a crisis is brewing, pitch in and help. If you don't have anything constructive to say, silence is golden at a time like this.

5. "I can only do one thing at a time." Yes, sometimes we all get overwhelmed at work -- so learn to multi-task. Snapping that you "can't handle the pressure" says to all within earshot that you can't handle your job.

6. "It can't be done." I worked for a company where the IT guy was like Scotty in Star Trek, always lamenting, "It just can't be done." Maybe what he was asked to do really couldn't be done... or maybe this guy just didn't want to be bothered. But one thing's for sure: He hardly ever came up with a solution to a problem.

Even if what you're asked to do seems impossible, search for ways to make it happen... and then boldly go where no man has gone before. (No more Star Trek references, I promise!)

7. "I am way overqualified for this job." Hey, maybe you are. Good for you. But the fact is, this is the job you have. You agreed to take it on. And while you may now regret that decision, it's still your job. Complaining that you're too good for it only makes you look bad. And guess what? You're not going to make your boss think, "Oh, this is a superior person. I need to promote him." Nope. He'll think, "What a jerk!"

It's easy to come up with excuses for why you are not moving up the food chain at your job.

But no one is going to promote you to get you to do what you are supposed to be doing in the first place. It makes no sense to think you should wait until you get a raise... and then become a top performer.

In other words, if want to be a superstar, start acting like one!

P.S. Peter "The Reinvention Guy" Fogel delivers presentations on humor, reinvention, copywriting, and marketing to corporations and associations across America. He helps entreprenuers reinvent themselves and unleash their "inner public speaker" for higher visibility and bigger profits.
To sign up for his 4-in-1 Total Success Reinvention Package, visit http://www.reinventyourselfnow.com.
And to sign up for his FREE 7 Days to More Effective Public Speaking e-course, please go to http://www.publicspeaklikeapro.com/public-speaking-secrets.html.

Early To Rise - Beneath The Mango Tree

(By Charlie Byrne)
- Reproduced from an article entitled: "Fruitful" Marketing Lessons From an Overabundant Tree, first published in Early to Rise on 15 July 2010

My hometown "Paradise by the Sea" of Delray Beach, Florida is not only blessed with miles of gorgeous sandy beaches... lined with dozens of casual, eclectic, and gourmet restaurants... and overflowing with hip clubs and art galleries...

It's also home to a huge number of... drum roll, please.

Mango trees.

I mean, really. It's almost ridiculous!

The trees rise to the sky on practically every street -- in front yards, vacant lots, village parks, and any number of other accessible, public spaces.

Hundreds upon hundreds of mangos hang off every tree. Branches bend down from the weight, putting the succulent fruit within the grasp of any man, woman, or child who cares to enjoy it.
And it was on one of my morning runs last week that I realized there was something terribly wrong with this picture!

All this wonderful fruit right there for the taking, but none of it had been picked! I examined no less than seven trees, and couldn't find a single stem missing its mango.

Why? Why, for example, hadn't I taken one myself?

The answer, of course, was simple. It's the same reason folks don't take the coconuts that are falling off trees all over town.

And the same reason why I never went to the top of the Empire State Building when I worked in New York City... and walked past it every day.

Because I could do it whenever I wanted!

And that's why Delray Beach's overloaded mango trees are an ideal illustration of two closely related marketing principles...

Urgency and Scarcity

In marketing terms, urgency means that the supply of a product is limited by time.

Ever get involved in an eBay auction when the clock was running out? How about getting up at 5:00 a.m. to be one of the first customers in line for a day-after-Thanksgiving "Black Friday" sale? If so, you know the power of urgency.

Scarcity means that the supply of a product is limited by quantity.

Both urgency and scarcity arouse the human desire to want that which we can't have.

Right now in Delray Beach, we have an unlimited supply of mangos, and they're going to be around for a long time. So there's no scarcity... no urgency. As a result, you literally can't give them away.

If you're not tickling your prospects' emotional impulses to buy NOW, I'm willing to bet your products are suffering from a similar fate.

When you apply the principles of scarcity and urgency to bring your marketing alive, your sales can increase dramatically. I've seen it many times -- and I'm talking about increases of 100 percent to 1,000 percent. In fact, this is probably the simplest, cheapest way to multiply your revenues instantly.

Our colleague, "Product Launch" guru Jeff Walker, knows all about it. He's brought in, and helped others bring in, more than $53 million in the past five years in all kinds of markets. Virtually all of Jeff's success is built around the mastery of scarcity and urgency.

According to Jeff, "Scarcity is probably the single biggest mental trigger there is. No matter how many times I've seen it used, it's always breathtaking to see how it moves people to action. I've seen WAY too many people underestimate the power of adding a scarcity component to their marketing. If you fall into that trap, you will be leaving a huge amount of money on the table."
So how can you pick up all that cash you've been leaving on the table?

There are plenty of ways, even if you are selling a product that is in infinite supply -- an e-book, for example:

1. Urgency: Add a bonus for a limited length of time.
2. Urgency: Reduce the price for a special holiday sale.
3. Scarcity: Add a bonus -- but only for the first 150 buyers.
4. Scarcity plus Urgency: With this "launch and retreat" approach, you sell a specific quantity of the product during a specific period of time, and then take it off the market. ("This Memorial Day weekend only, I'm offering just 100 of these information-packed e-books. Sale ends Midnight Monday or when the 100 are gone -- whichever comes first.")
   

Taking your product "off the market" at a specified date and time might sound scary. What if a bunch of prospects show up at your website the following week looking to buy what you just stopped selling? Wouldn't you be kicking yourself over that lost opportunity?

Perhaps. But I can pretty much guarantee one thing. The overwhelming number of sales you'll make during a scarcity/urgency campaign will make the number you might lose utterly insignificant. In addition, when you "re-open" your next campaign, you'll already have a certain amount of "pent-up" customer demand providing fuel for your fire.

One Important Caveat to Keep in Mind...

You want to add scarcity and urgency to your marketing, but you want it to be genuine.

As Michael Masterson told me, "There has to be a legitimate reason for the scarcity. If you're faking it, customers will see through it and it loses its power."

He suggested a few ways to "make it real" for them: Explain that you had only 100 of the special reports printed up. (Why not show the actual invoice?) Or that the fire code limits the conference room to 75 people. (Why not take a photo of the actual sign in the room?) If you're selling personal coaching services, explain that you have only so much time. If you're selling an investment advisory service, explain that if too many people get the same recommendation, they can initiate a buying frenzy that artificially pushes up the price.

I'm just touching the surface here -- but you get the idea.

P.S. This article is a follow-up to another previous article entitled "Early To Rise - The Empty Restaurant". The underlying messages in these 2 articles are similar to each other, but it is worthwhile to re-emphasise the concepts once in while again in another interesting setting. The key message behind these articles have really to do more with the fundamental human psyche involved, for all brilliant marketing strategies seek merely to appeal to that human psyche.

Early To Rise - What Jim Brown Knows

(By Alexander Green)
- Reproduced from an article entitled: If You Knew What Jim Brown Knows, first published in Early to Rise on 27 July 2010

Jim Brown is arguably the best all-around athlete ever.

He was a track star, one of the nation's finest lacrosse players, averaged 38 points per game on his high school basketball team, and broke NFL records as a running back for the Cleveland Browns. In 2002, The Sporting News named him the greatest football player of all time.

He was pretty handy with a tennis racquet, too. And he liked to wager on his matches.
At a Las Vegas tennis club in 1979, Brown was frustrated when his opponent cancelled a money match at the last minute.

A stranger approached him with a young boy. His proposal -- delivered in a thick foreign accent -- was preposterous. He bet Brown that his nine-year-old son -- short and scrawny even for his age -- could beat him in tennis.

And he was cocky about it. He offered to put up his house.

We can only imagine what ran through Brown's mind as he sized up the half-pint. After all, this wasn't a bet. It was an insult.

The stranger had chosen the wrong man to outrage. Brown wasn't just an athletic phenom. His NFL career could be summed up in his oft-quoted remark, "Make sure when anyone tackles you he remembers how much it hurts."

He countered that they should make the bet an even $10,000.

The club owner tried to warn Brown. And while he did reduce his wager, he wouldn't be talked out of the match, insisting, "The man needs to be taught a lesson."

And so Jim Brown strode off to the courts. With Mike Agassi and his young son Andre in tow.

It didn't take Brown long to recognize his error. He had been hustled.

We seldom deliver lessons in humility. More often than not, we wind up on the receiving end. This is especially true in my bailiwick, the investment arena, where high confidence and big egos are routinely taken down like the Berlin Wall.

Every successful investor develops an abiding sense of humility, a deep respect for the unknowable. What will happen tomorrow or next week is always an open question.

And if you don't know who you are, the stock market is an expensive place to find out. Just ask Victor Niederhoffer.

A professional trader and former finance professor, Neiderhoffer established his reputation as hedge fund great George Soros's partner, managing his fixed income and foreign exchange investments from 1982-1990.

Niederhoffer is a smart guy and an unorthodox thinker, drawing on many disciplines -- including psychology, philosophy, and advanced mathematics -- to make his trading decisions. His 1997 book, The Education of a Speculator, was a New York Times bestseller.

But in the fall of that same year, he got his post-graduate degree. Viewing the Asian market meltdown as a once-in-a-lifetime opportunity, Neiderhoffer invested his hedge fund in Thai bank stocks, confident the government would never let them fail. He was wrong. His fund quickly lost more than three-quarters of its value and he was forced to close its doors.

Niederhoffer is an experienced, insightful guy. But I wish he'd written The Education of a Speculator after his hedge fund collapsed, not before. That would have been a book worth reading.

Niederhoffer is hardly alone, of course. History has not been particularly kind to all manner of experts and their definitive pronouncements:

1. Anglican Archbishop James Ussher (1581-1656) researched the dates of Biblical events and painstakingly subtracted all the Old Testament generations. When he finished his calculations, he proclaimed that the earth was created on October 23, 4004 B.C. at nine o'clock in the morning. (We now know he missed his mark by 4.6 billion years or so.)
2. In 1899, Charles H. Duell, commissioner of the United States Patent and Trademark Office, proposed shuttering the office. "Everything that can be invented," he said, "has been invented."
3. In 1927, The New York Times heralded Philo T. Farnsworth's new creation, the television, with a front-page article and this subhead: "Few Commercial Possibilities Seen."
4. Walter Lippman, one of the 20th century's most respected journalists and thinkers, wrote in a column dated April 27, 1948, "Among the really difficult problems of the world, the Arab-Israeli conflict is one of the simplest and most manageable."
5. In 1962, a little-known Liverpool group called The Beatles auditioned for Tony Meehan of Decca Records. They performed 15 songs in just under an hour. Decca sent them packing, saying "Guitar groups are on the way out" and "The Beatles have no future in show business."

It's not just the "experts" who flounder, of course. Life is one long lesson in humility. Our perceptions can deceive us. Trust gets misplaced. Knowledge grows and opinions change. Even when the truth is with us, there are often exceptions.

It's natural to seek out experts who can guide us. But outside of physics and chemistry, predictions about the future are best taken with a whole shaker of salt.

We are all swimming in a vast sea of the unknown. The sooner we recognize this -- and embrace it in our personal and business lives -- the better our chances of staying afloat.

P.S. Alexander Green, Investment Director of The Oxford Club, has more than 20 years of experience as a research analyst, investment advisor, financial writer, and portfolio manager. He is the author of The Secret of Shelter Island: Money and What Matters, as well as the editor of "Spiritual Wealth," a free e-letter about the pursuit of the good life.

Early To Rise - Rewarding Yourself

(By Micheal Masterson)

When I was first getting into the business of selling educational programs, a famous zero-down real estate guru asked me, "Do you know the thing people who take my courses want most?"

I had a sneaking suspicion I was about to get it wrong, but I gamely answered, "To be successful real estate investors?"

He laughed. "You've got a lot to learn, my friend."

I took the bait. "So what do your customers want?"

"They want to avoid taking action."

I told him I wasn't sure I understood. He was kind enough to clarify. "Most of the people who take my courses and who will be buying your programs want to feel like they are on the road to success. But they don't want that road to end. They like the journey. They fear the destination."

"And why would that be?" I asked.

"To tell you the truth," he said. "I don't know. But I can tell you this. After our real estate students have gotten the knowledge they need to succeed, few of them get out there and get to work. Most of them just buy more programs. If they don't buy them from us, they will buy them from someone else. So we sell them extra programs."

"That's sort of depressing," I said.

"If you give one of my customers – someone who has completed his real estate education and is fully prepared to start investing profitably – a choice between actually getting to work and buying another course to learn more, he will buy the course."

"Are they afraid of failing?"

"Could be that," he said. "Could be they're afraid of success. As I said, I don't know."

Since then I've thought a lot about this failure-to-get-started problem. I've read dozens of books and talked to many of my colleagues and posed the question to hundreds of my customers. The theories as to why people don't take action are many and varied. The three that make most sense to me are:

1. Lack of Confidence: People who haven't yet been successful in life don't believe they can be, even if they are fully prepared to succeed.
2. Fear of Pain: Some people see taking action as work and work as a form of pain. These are usually people who have never experienced the pleasure of working on something they value.
3. Laziness: Besides the fear of work, human beings are programmed to be lazy. Being lazy means trying to get what you want with the least amount of effort. Some people don't take action because they want to find an easier way.
   

If these are the main reasons why so many people don't take action when they are ready, what is the solution?

There's no mystery to that. Behavioral scientists know that the way to change a person's behavior is by motivating them through positive reinforcement. This is what B.F. Skinner had to say about it in A Brief Survey of Operant Behavior:

"It has long been known that behavior is affected by its consequences. We reward and punish people, for example, so that they will behave in different ways. ...

Operant reinforcement not only shapes the topography of behavior, it maintains it in strength long after an operant has been formed. Schedules of reinforcement are important in maintaining behavior.

If a response has been reinforced for some time only once every five minutes, for example, the rat soon stops responding immediately after reinforcement but responds more and more rapidly as the time for the next reinforcement approaches. ...

Reinforcers may be positive or negative. A positive reinforcer reinforces when it is presented; a negative reinforcer reinforces when it is withdrawn. Negative reinforcement is not punishment. Reinforcers always strengthen behavior; that is what ‘reinforced' means."

Positive reinforcement is a big part of my life. I reward myself constantly and for almost any sort of accomplishment, big and small. By attaching rewards to my desired behavior, I increase the likelihood that I will repeat that behavior in the future.

When I "master planned" my life for the first time, I had to spend some time thinking about how to reward myself. I gave myself all sorts of incentives for all sorts of objectives. Some of them worked. Some of them didn't.

Some success coaches suggest big rewards for big accomplishments. You might, for example, reward yourself with a sports car when you make your first million dollars. Big goals like that never worked for me, because they were too far off in the future. What motivates me are short-term goals. And I have a feeling that short-term goals will be better for you, too.

Over the years, I developed a reward system that works very well for me. Here it is:

1. As I mentioned earlier, when I complete a task on my daily task list, I cross it out (or change its color on my screen) to "signal" that I have accomplished it. This little gesture is like a tiny shot of adrenaline. It picks me up and gives me energy to attack my next objective.
2. While working at the office, when my egg timer goes off, I get up from my chair, walk outside, and spend a minute or two stretching out my back. I've found that 30 to 60 minutes flies by – especially when I'm writing – and so these half-hour or hour-long periods seem very short.
3. After I sprint in the morning, I reward myself with 10 to 15 minutes of yoga. Doing yoga might seem like more exercise to some, but to me it feels like a reward since it is so much more relaxing than sprinting.
4. After training in Jiu Jitsu at noon, I treat myself with a tasty protein shake.
5. At 6:30, I take my laptop to the cigar bar down the street, and work on my writing there for another hour or so. When I walk in, they have an espresso and water waiting for me. I look forward to this. I'm still doing work, but it's a reward because I'm doing it in a new place.
6. After an hour of writing at the cigar bar, I reward myself by going home, breaking open a good bottle of wine, and having dinner with K.
7. If I do any work in the evening, I reward myself afterward by reading a good book or watching a movie.
8. I reward myself every evening by climbing into a great bed with silky sheets and a pillow that fits my head perfectly.

These rewards, as you can see, are pretty mundane. But that's the thing about rewards. They don't have to be big or even special. They need only be enjoyable.

It would be easy for me to consider these little things – the stretching, the protein shake, reading a good book – as simply an ordinary part of my ordinary day. But by looking at them differently, by seeing them as pleasurable rewards for specific, desired behavior, they motivate me.

I think that is the key – identifying little pleasures you already have in your life and using them as behavior-changing rewards. It's very easy to do once you recognize that these little pleasures are blessed gifts. Truly speaking, you are lucky to be able to enjoy them. Be happy about that. Use them pragmatically.

P.S. [Note from the original Editor: This essay is an excerpt from Michael Masterson's new book, The Pledge: Your Master Plan for an Abundant Life. The book, to be published by John Wiley and Sons, won't be released until November. But you can get an early look. And sign up to get first chance at buying The Pledge. Just go here, give us your e-mail address (so we can give you exclusive book updates and a special deal when the book is officially released), and you'll download an excerpt from The Pledge instantly.]

Early To Rise - The Empty Restaurant

(By Michael Masterson)

Entering the piazza, we saw that we had the choice of four restaurants: one that was very busy, two that were moderately busy, and one that had just one couple sitting at a table in the back.

Which do you think we picked?

Here was our thought process:

We couldn't bring ourselves to consider the nearly empty restaurant. If it were any good, more than two people would have been eating there. We scratched that one.
Then there were the two that were half-filled. One had plastic chairs. That one was out. The other one was cute -- a contender.

So it was between that one and the crowded restaurant.

They both had attractive table settings. They had similar menus and pricing. There was no significant difference between the two except that one was crowded and the other wasn't.

In the less-crowded restaurant, the waiters would be less rushed, the kitchen less pressured. That being the case, we figured we would probably get better service.

But we also assumed that the crowded restaurant must have been crowded for a reason.

There was now only one table left. We grabbed it and felt lucky to be there.

How did we decide?

On the face of it, you might say we made a logical decision. But I don't think that's what we did. Our logic, such as it was, was more a rationalization of deep-seated impulses. Neurobiologists say that such impulses were implanted in the human brain millions of years ago.

If you want to be a master marketer, you must become an expert at understanding those impulses. Because when it comes to decision making, they are just as important as logic. Maybe more important.

In his classic work Influence: The Psychology of Persuasion, Robert Cialdini showed how successful marketers play on these impulses to persuade prospects to buy.

When K and I made our decision, it involved some rational thought. But that rational thought supported what we knew, deep down inside, we already wanted to do.

Cialdini would say that our decision was based on a combination of "urgency" and conforming to "social proof."

And that's what I want to talk about today: why you need to include adequate urgency and social proof in your advertising efforts.

When we mention that Early to Rise has 400,000+ subscribers... or when McDonald's says they serve 52 million people around the world every day -- that's social proof.

Urgency you've seen during one-day sales or when a supermarket offers a specially priced item "as long as supplies last."

I have written about these concepts before. And I have coached a hundred writers about them. But I find that in many of the promotions I review, they are inadequately presented or absent entirely.

What's more disturbing to me, I have noticed that I sometimes neglect them myself when I write sales copy.

I'm taking the time to discuss them again today because I am guessing that you, too, may give social proof and urgency short shrift. If you do, your copy is not as strong as it could be. And I'm hoping to convince you to make it a habit to emphasize them in your marketing.

I'm also hoping that by writing this essay something will click in my calcified brain and I'll remember to employ them in all the marketing campaigns I work on in the future. That will be good for my clients... and it will beef up my consulting fees.

When K and walked into that plaza, we had only one piece of prior knowledge about those four restaurants. K had read that one of them was excellent. And so that was the one we meant to go to.

But guess what?

That was the restaurant that was nearly empty. Seeing it so -- surrounded by three restaurants that were doing good business -- gave us serious doubts.

The review K read had said the food was excellent but the pricing was a bit high. So why didn't they have more customers -- people like us who were willing to pay a little more for good food?

Since there was no one there but two people at a back table, we were scared to try it. Perhaps the management had changed since the review was written. Perhaps someone had died of ptomaine poisoning the night before. Who knew?

We had reliable evidence (the review) that the restaurant was good. But we ignored it because our instincts made us fearful.

Cialdini would have said that was the effect of social proof -- in this case, the negative social proof of its being nearly empty.

In his chapter on social proof, Cialdini says:

"The principle of social proof states that one means we use to determine what is correct is to find out what other people think is correct. The principle applies especially to the way we decide what constitutes correct behavior. We view behavior as more correct in a given situation to the degree that we see others performing it. Whether the question is what to do with an empty popcorn box in a movie theater, how fast to drive on a certain stretch of highway, or how to eat chicken at a dinner party, the actions of those around us will be important in defining the answer."

Cialdini cites a psychological study in which children with an extreme fear of dogs were cured of their phobia by watching a video of other children playing happily with dogs. After watching the video for just four days, for just 20 minutes each day, 67 percent of the children were able to interact comfortably with dogs. And the results didn't dissipate over time.

As examples of social proof in action, Cialdini also mentions canned laughter on TV sitcoms and the incessant naming of donors during public radio pledge drives.

Now consider how social proof might play out in an advertising campaign.

You are selling a product that happens to be very good. When you create the promotion for it, you say that it is good and you talk about its benefits for your prospects. But you provide no social proof.

Reading your promotion, the prospect is initially intrigued. But because there's a lack of social proof to back up your promises and claims, he doubts what you're telling him. He begins to read everything you have written as potential fluff. He wants to believe you (as all prospect do) but his inner brain (the part of the brain that controls emotional intelligence) is skeptical.

What does he conclude?

My guess: that you have given him no proof of your promises and claims because you have none. And if you have none, that must mean the product is unsatisfactory. So he decides not to buy from you. He has plenty of other similar offers to choose from.
Back to our restaurant experience...

We had eliminated the one restaurant that already had us sold because of a lack of social proof.

Now there were three to choose from. We eliminated the first one because of the plastic chairs. This, too, I would argue, was a decision based on emotional not rational intelligence. It's been our experience that a restaurateur who thinks a plastic chair is adequate is likely to be one who thinks mediocre food is adequate.

So then it was down to two: one half-filled and the other nearly full.

Both could have had great food. We could have asked people dining there what they thought of it -- thus gathering social proof ourselves. But the restaurant that was nearly full was filling up fast. There were a half dozen other couples milling around. If we took too long to make our decision, we wouldn't have the option of choosing the busiest one. So we opted for that and took the one remaining table.

What, then, was behind our final choice?

It was "scarcity" -- one of the factors that creates a feeling of urgency. The fact that there was only one table left made us worry that we would miss out. So we yielded not to logic but to an instinct we had that scarcity equals value.

Again, from Cialdini:

"The idea of potential loss plays a larger role in human decision making. In fact, people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value. For instance, homeowners told how much money they could lose from inadequate insulation are more likely to insulate their homes than those told how much money they could save.

Collectors of everything from baseball cards to antiques are keenly aware of the influence of the scarcity principle in determining the worth of an item. As a rule, if it is rare or becoming rare, it is more valuable."

To illustrate the impact of scarcity, Cialdini cites a study in which the owner of a beef-importing business uses one of three prepared sales pitches with his regular customers, wholesale buyers for supermarkets: (1) his standard sales pitch; (2) his standard sales pitch with a bit of information about an upcoming shortage of imported beef in the next few months; or (3) both of the above, as well as an aside that this information about the shortage was not well-known.

The buyers given the second version of the sales pitch bought twice as much as those given the standard spiel. And the third group bought six times as much.

After ordering our meal, we asked our waitress why our first-choice restaurant was empty. (It was now completely empty.) We expected to have our suspicions confirmed -- that since that glowing review was published, something had changed. But that is not what she told us.

She said, "I don't know. But that's the way it goes here. One night we are very busy and the next night it is someplace else."

"What do you think accounts for it?" I asked.

"The one that gets the earliest customers usually is the one that fills up," she said.

So there it was.

Our first choice probably had the best food, but it was now empty because everybody but one couple had come to the same conclusion we had. Like us, they probably made a decision based first on a lack of social proof and second on a feeling of urgency created by scarcity.

If I were the proprietor of any of those four competing restaurants I'd make sure that my place was always full by doing three things. First I would rope off all of the back tables and leave them unset.

1. Then I'd let my regular customers know that if they came by early in the evening, they could eat for half price.
2. And then, as the tables started to fill up, I'd gradually open up more by moving back the rope.
   

By taking advantage of the principles of social proof and scarcity, I would ensure that my restaurant would attract a continuous stream of customers.

As expert marketers we have an obligation to do the same with our advertisements.

We must, of course, make sure that every promise and claim we make is backed up with factual proof -- the results of scientific studies, statistics, that sort of thing.

But we must provide social proof as well. That would include endorsements by trusted authorities and testimonials from satisfied users.

And don't forget urgency. Urgency can be created in many ways in an ad -- but the strongest way is based on scarcity. You must let the prospect know that if he wants the product you are offering at the price you are offering, he must act now.

So there you have it: two extremely important advertising principles. Make yourself a promise that you will pay them heed. I am making that promise to myself as I write this.

P.S. Additional Notes from the Editor: Social proof, urgency, and scarcity are key psychological motivators that every marketer must understand. But you can't fake them in your advertising. They must be real or they won't be believed. And they won't work if you don't "back them up" with: Quality products desired by the market

1. A way to build your customer list
2. Procedures for testing products, marketing channels, and advertising messages
3. Good copy that stirs buyer emotions

And the list goes on...