Brian Tracy on the housing crisis and making money.
At the time of the American Revolution, Abigail Adams, a very perceptive woman and the wife of our third president, John Adams, said, “All men would be tyrants, if they could.” It was an astute observation. There is within almost every person, the “urge to power.” It is amazing how many people have an intense desire to enforce their will on other people. The newspapers are full of commentators recommending that people be “forced” to pay higher taxes, drive slower, use public transportation, and in general, support whatever the writer thinks is good for them, whether they like it or not. By the same token, we could say that, “All people would be thieves, if they could.” Almost everyone has a deep down desire to get something for nothing, something that they have not earned and to which they are not entitled. No where is this more obvious than in the area of money. Today, we are going through a series of wrenching financial scandals and turbulence triggered by the sub-prime mortgage meltdown. Why did this happen? The answer is simple. Somehow, for some reason, a mass national hysteria took place and thousands, if not millions of people began to think it was possible to get “free money” that they had not earned and did not deserve. Like an epidemic, this “free money” craze has swept across the country. People bought homes they could not afford, and borrowed money against their homes they could never pay back. Instead of behaving responsibly, as many people did, too many homebuyers became “home flippers.” Herbert Stein, the economist, once wrote that, “What cannot go on, won’t.” Thomas Jefferson once wrote, “America will be a great land until the people become convinced that everyone can become rich at the expense of everyone else.” Do you remember the old Smith Barney television commercial, where the actor looked into the camera and said, “We make money the old fashioned way; we earn it.” There is only one way to become financially successful, and that is to “add value” wherever you are. It is to earn it in some way. You have to put in more than you take out. You have to contribute greater value than you receive in compensation. You have to continually upgrade your skills and abilities so that you can serve your customers and employers at ever higher levels, making yourself ever more valuable to them. The only way to become rich is to “spend less than you earn.” In my recent book Flight Plan, I wrote that it is not possible to become financially successful by thinking happy thoughts, visualizing and attracting wealth into your life. Instead, you must decide how you are going to “deserve” the wealth that you desire. What value are you going to offer to others that they will reward by voluntarily choosing to pay you for your products and services? How are you going to improve or enrich the lives of others in some way? If you want to prosper financially, you must find ways to help others to prosper, in advance. Some years ago, a book was written entitled, “Extraordinary Popular Delusions and the Madness of Crowds.” This book documented the financial crazes that take place periodically, in different places in the world, starting with the “tulip craze” in Amsterdam in the 1600’s. People became convinced that tulip bulbs would go up in value endlessly. Speculators were paying the equivalent of thousands, and tens of thousands of dollars for a single tulip bulb, convinced that there was a “greater fool” who would come along and buy it for an even higher price. But as Herbert Stein said, “What cannot go on, won’t.” Eventually, the tulip craze collapsed, bankrupting thousands of individuals and causing the collapse of the Dutch economy. In the last few years, we have had the “buy’em and flip’em” craze. Now it is over, like a massive drinking binge, and the hangover is extremely painful. Just as it took about three years of craze to drive home prices up 50% and 100%, it will take about three years of collapse before home prices, like a water level, return to normal. Just like a hangover, there will be enormous pain and suffering. But this is inevitable. What goes up must come down. And often it must come down a long way before it stabilizes. For the rest of your life, refuse to think or act like a thief. A thief is someone who attempts to take something that does not belong to him, or her. Whenever you attempt to get money that you do not deserve, you are thinking like a thief. And the end is near. Keep on thinking!
