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Alan C. FoxAuthor. Entrepreneur. Game-changer.
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Living by Principle

by Alan C. Fox 0 Comments

 

GameofLife-PeopleToolsAt breakfast yesterday my granddaughter asked me to teach her about investments and how to handle money.  This is an excellent question for anyone, especially a new college graduate headed to medical school.

I thought of Warren Buffet, who is the most successful investor of the twentieth century.  How successful?  According to Wikipedia, in 2008 (at age seventy-eight), “Buffett became the richest person in the world, with a total net worth estimated at $62 billion.”

How did he do it?  The answer is simple.  Buffet has lived his business life following a series of his own principles.  Of course, this is far easier to declare than to accomplish, but in the case of Buffet the result of the “doing” speaks for itself.

One example of following his principles is that Buffet refuses to invest in an industry he does not understand.  This meant that in the 1990’s, when the price of tech stocks went through the clouds, he did not invest in those companies because he did not understand tech.  Many commentators wrote at the time that since he failed to participate in the “boom”, Buffet had become a “bust.”  After the tech stock price crash of the late 1990’s you might easily guess who is crying now.

Living by principles doesn’t just apply to money and the stock market.  It’s also important to have principles to live by.  For example:

  1. Are you in charge of your life or are you a victim?  In other words, when life serves you lemons do you make lemonade, or do you complain about your situation?
  2. In what areas do you think short-term, and in what areas do you think long term?  With regard to accumulating wealth, long-term works.  With respect to establishing deep, lasting relationships telling the truth works.
  3. What are your principles about education?  I’m not only referring to formal education.  Do you want to learn more each day, or are you satisfied to live with what you already know?  My father is one-hundred years old, and shared with me this morning an idea he has about a new kind of collar for a man’s shirt.  My dad is always learning, always thinking.
  4. Where are you on the scale of having compassion for others?  Compassion for yourself?
  5. In what situations will you live by your principles, and in what situations will you compromise in order to do what is most expedient at the moment?  When you receive too much change at the grocery store will you keep it, or will you return it?
  6. How much will you give your children?  Buffet says, “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”

Principles-PeopleToolsIn thinking about living by principles, I am mindful of the story about the Buddhist monastery which was invaded by robbers.  Finding nothing of value, the leader of the robbers put his knife to the throat of the head monk and said, “Where is the gold?”

The monk merely smiled up at him.

Again, the robber demanded to know the location of the gold.  The monk continued to smile at him.  Finally the thief said, “Don’t you know that I have the power to kill you?”

The monk said, “Don’t you know that I have the power to let you kill me?”

I’m not sure I would go that far in living by my principles, although a man who did is Thomas à Becket, Archbishop of Canterbury, who was murdered on December 29, 1170.

Do you live by your principles?

Alan

(For more information from Warren Buffet, see The Essays of Warren Buffet:  Lessons for Corporate America, 2013, 3rd edition, Selected, Arranged, and Introduced by Lawrence A. Cunningham.)

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You Don’t Always Have to Answer the Telephone

by Alan C. Fox 1 Comment

 

QualityTime-PeopleToolsWhen I was growing up we had one telephone in our home. My brother and I were instructed always to answer it after the second ring.  One afternoon the telephone rang at an inconvenient time.  My mother said, “You don’t have to answer it.”

“But Mom . . . “

Maybe she was tired.  Maybe she knew who was calling and didn’t want to talk to them.  For whatever reason, Mom said, “Alan, you don’t always have to answer the telephone.”

I thought about this for years, and I now realize that my Mom’s permission was a turning point in my life.  I have always been curious.  If I don’t answer the telephone I might miss an important call.

But in any relationship it’s crucial to pay attention to your partner.  Not partial attention.  Full attention. And that means that sometimes, you should not answer your phone!

Today almost everyone carries a cell phone.  My dad was honored recently at a concert at the University of Arizona.  In the middle of a cello solo Dad’s cell phone rang.  He answered it.  I heard him say, loudly, into the glow in his hand, “Not now!”

When his phone rang again I suggested that he turn it off.

The question is this:  Who is in charge of your life?  Your parents?  Your friends?  Everyone who has your telephone number?  Or you.  Do you have to answer your phone just because someone has dialed your number?

I turn off my cell phone at meals, at movies, and after nine pm.  I also turn it off when I’m in the middle of a serious conversation.

Tom, a business associate, recently shared with me the reason he is no longer married to Rhonda, his high school sweetheart.

“Alan,” he said, “she was always on the phone.  One time we were on our way to a wedding, and Rhonda got a call less than a minute after we left the house.  She was on her phone during the entire drive and for ten minutes in the parking lot after we arrived.  She finally said “Goodbye” as we were standing in front of the church, and we ended up seating ourselves in the back row just as the ceremony started.  It was embarrassing.  And this happened all of the time.  Whoever was on the other end of that telephone line was the center of Rhonda’s attention.  I felt ignored.”

I have a clear sense of priorities.  When my father, one hundred years old, calls me, I answer.  When my wife calls, I almost always answer.  If one of my children calls me during the business day I either take their call or arrange to call them back.  I refuse to elevate business to a higher priority in life than my family or close friends.

Phone-offHook-PeopleToolsThe quality of every relationship is directly related not only to the amount of time you spend spent with each other, but, more importantly, to the quality of that time.  When you are on a date I don’t think that you or your date would want your mother, or anyone else, to sit in the back seat.  When we’re together I don’t want to be relegated to the back seat of your life, while someone else has grabbed your full attention.

Give yourself a break from being plugged-in.  You do not have to be available twenty-four seven.  Take to heart the aphorism, “Good news will wait.  Bad news will find you soon enough.”  And if your phone rings, you don’t have to answer it.  My mother gave you permission.

Alan

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After Sales Service: The Key to Long-Term Growth

by Alan C. Fox 0 Comments

 

Happy-Service-PeopleToolsThe success of every business is based upon relationships.  When I started my commercial real estate company more than forty-five years ago it took me a month to raise my first $5,000 of capital.  Today I raise $1,000,000 with one email.  Why?  Strong relationships, which I have built by providing continuing after sales service.

The importance of after sales service is simple, but often ignored: It takes far more time and energy to gain a new customer than to sell your product repeatedly to those you already have. It is therefore mandatory in my book to provide excellent service to my customers, especially after I’ve made the sale, so they will continue to do business with me in the future.

For example, over the past four decades, I have built a strong base of investors in the commercial real estate that I buy and manage.  And while I usually earn a profit when a property is bought, and often when a property is sold, I never “churn” my portfolio.  Why?  Because the greatest return for my investors usually comes with a long-term hold, just as the greatest return from a relationship is usually realized over time.  Selling a property after a few years might benefit me, but not if it is at the expense of my clients.  Transaction costs, which might add to my bottom line, can gobble up their gain. When I hold and manage a property for ten or twenty years I provide greater after sales service and accumulate invaluable investor loyalty.

Similarly, I invest in managing the day-to-day operations of our investments, even though I don’t immediately benefit from doing this. I consistently lose money on property management because I employ more people than my competitors.  But this after sales service improves my investor relationships and ultimately generates future sales.

That said, it’s important not to confuse after sales service with excess before sales service.  I made this mistake early in my career. When I was practicing law and just beginning to buy real estate I met a woman who said she was interested in investing with me.  I carefully explained to her the ins and outs of investment, and over several years we discussed quite a few specific properties.  In turn, she frequently asked me for unrelated legal advice, which I was happy to provide at no charge, hoping for her investment.  After almost three years I stopped giving her free legal advice because she had never invested.

I read an article in the Wall Street Journal that compared the American style of business to the Asian model.  Americans were described as hunters, with the goal of making as much profit as possible from a single shot.  The Asian model was more like farming: cultivating the fields of a business relationship, from which future transactions and profits would flow.

AfterSales-Service-PeopleToolsToday I believe that the world’s most successful companies provide excellent after sales service. Why? Because we live in a service economy, with a great deal of competition, and it’s more difficult than ever to acquire and retain new customers.  More than once I have walked out of a restaurant, never to return, because the service was either slow, rude, or both. I remember that, after a service problem with another brand, my mother always bought a Kenmore washer and dryer because of their reputation for reliability and the availability of prompt service. Kenmore must have similarly impressed my wife, because we have a Kenmore washer and dryer in our home today.

It can take a great deal of time and money to gain one new customer.  I suggest that you enjoy, appreciate, and retain those you already have.

Alan

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