Sean Costello is an entrepreneurial leader who values the right balance of culture and execution. He has founded multiple companies on the principles of patience and curiosity, and works hard to maintain a supportive atmosphere for his clines and employees. This has lead Sean to his contribution to Paper Napkin Wisdom: People all around you want to help, they just don’t yet know how.
In Sean’s experience, real connections become possible when you share with people how they can help you. We are all here to help unlock each other’s people and help each other succeed. In so doing, we ourselves will succeed by realizing our strength. Thinking of this another way, how effective would a sports team be if each player was wearing blinders and was unable to locate their teammates? The metaphor of the team can thus relate to family, an organization, a corporation, or any community of people that is reliant on one another.
The requirement or exercise within this philosophy, as Sean explains, is quite simple. It is about actively asking for feedback while simultaneously making it safe for sharing. Sharing, in this case, can mean everything from concerns to feedback to dreams. This creates an environment of possibilities.
Sean exploration as a microcosm for business - it cannot succeed without the appropriate amount of process, planning, preparation, and simulation. This has driven his fascination with the space program, while also helping him meet and develop a co-mentorship with someone he calls “Young Astronaut Abby”. Abby shared with him, in their first meeting, her dream of being the first astronaut to Mars. Sean challenged Abby to continue with and develop that dream, rather than dismissing it as childish whimsy. She has since spoken on a Ted X stage about acting and dreaming big, and leveraged her dream into other examples of success. This was able to occur because she shared her dream with Sean and gave him the awareness on how she could be helped.
Another example is quite personal for Sean. When his grandfather was about to turn 100, his family was flying into a remote town to celebrate. Sean wanted to offer him something unique to help him with that celebration, so on the flight there, he shared with the pilot the location of his grandfather’s farm. The farm happened to be near the airport, so Sean simply asked for a fly by. The pilot, of course, was more than happy to oblige and Sean was able to take photos of the farmhouse as they flew over to share with his grandfather and elevate his birthday celebration.
This is all to say that Sean enters every transaction, regardless of the situation, by sharing how he defines success with the other participants. For example, he was able to convince a customer to pay up front for a full year by offering a reduced price, all the while that up front cash was also helping Sean to succeed by providing him with financing.
In Sean’s experience, the best approach to relationships is to start by thinking “what do I need to do for them” rather than thinking “what do I need to demand”. The result will be more fulfilling for both parties.
For more than two decades, Alex Charfen has been creating and testing business philosophies specifically geared towards entrepreneurs. Alex has been an entrepreneur himself during this period, and has developed the Entrepreneurial Personality Type to help business owners grow their business and themselves. He has contributed to numerous major media outlets and brings his core philosophy to Paper Napkin Wisdom: “There is nothing wrong with you.”
Alex’s contribution stems from an observation that whoever has stood out in history has always had a restlessness - something that people constantly told them was a weakness. Ranging from the original great thinkers of Athens to Einstein to Buffett, opposition to this type of innovative thinking has always originated from a resistance to change. In the business world, entrepreneurs represent this archetype because we are highly susceptible to negative criticism.
At every level of business - and especially when starting out - the message is “fix yourself.” In Alex’s experience, however, entrepreneurs must discover how to identify strengths and abilities, develop protection and support, and lower pressure and noise. You may be surprised at how rapidly these efforts help in accomplishing your goals. Alex even goes so far as to recommend leaning into your personality (as opposed to tempering it) and make it a more prominent part of your business.
From the work Alex has done with entrepreneurs, he has identified three awakenings that each of us experiences: 1) a realization that we are fundamentally different, 2) an innate motivation to keep going, 3) the call of contribution. The first stage begins at an early age by learning “what is wrong with me” through systemic suppression and fear. This eventually grows, however, into learning how to get ahead, and learning that self improvement often requires breaking systemic rules. The next evolution becomes “how to get my partners and team ahead”, which finally results in “how to contribute and help everyone.” Think of Bill Gates as the perfect example: someone who began is career as selfish, driven, and cutthroat, but developed a philanthropic, generous spirit of contribution.
Entrepreneurial personalities tend to prefer momentum to feeling - forward vs backwards as opposed to happy vs sad. As such, chasing momentum is more rewarding than chasing happiness. Entrepreneurs tend to be momentum-based or highly attuned to whether they’re moving forward. As Alex describes it, pressure and noise = stress, frustration, obstacles, regardless of size. Protection and support comes from surrounding yourself with people who help you move forward.
Complete the following exercise: think of a time when you experienced a high level of momentum. What were you chasing and how are you tracking your momentum? Who contributed to you and who have you contributed to? A perfect example of this formula is Rick Hoyt: a person who, with the help of his father, family, neighbors and friends, overcame a physical disability to develop strengths and abilities, and eventually make a contribution through inspiration.
John Spence went from being kicked out of college with a D average to becoming CEO of an international Rockefeller foundation and reporting directly to Winthrop P. Rockefeller III just a few years later. This turn around wasn’t an accident, it was something John did by maintaining a focus on innovation, personal growth, and a thirst for learning. As an entrepreneur, he has worn many hats, but has always maintained that focus on innovation. This is the inspiration for his contribution to Paper Napkin Wisdom: “II > EI”. Simply put, the equation means that to be successful in the future, the rate of internal innovation must exceed the rate of external innovation.
In the entrepreneurial world, when everything around you becomes unstable, internal innovation is required in order to maintain (or grow), especially considering the speed of change around us. Entrepreneurs know in their core that in order to be successful, we must out-innovate, out-create, out-experiment, and out-deliver our competitors.
The pace of innovation is faster and the scope is broader (global) in every industry, sector, and marketplace. Consider the modern smart phone: in 1982, to purchase something that had every capability that a smart phone currently has would’ve cost $3.2 billion dollars (with a B!) and been the size of two tractor-trailers. An iPhone now retails for $700 and fits in your pocket. In 10 years, you may be able to purchase the same capabilities for $5 at the size of a human blood cell.
The next question that most entrepreneurs will ask, according to John, is regarding intellectual property and the protection of ideas. While the open source economy is rapidly developing, the protection of intellectual property will require a heightened attention on process. This means a powerful commitment to continuous, daily, incremental improvement. In John’s experience, this also requires convening with like-minded individuals to bring new ideas and provide support (the oxymoron of personal connection in the face of technological disconnect).
In that vein, John’s work has provided him with relevant analysis on the younger generation of today’s workforce and produced surprising results. The so-called millennial generation values the opportunity to do important work, work with cool people, and make a difference. This comes from the realization that you can Google an answer, but not a question - it cannot ask you a question and cause you to think critically. The correlation for entrepreneurs is that the success of your business, regardless of size, is directly determined by the quality of the people that you can get, grow, and and retain. Even for “solo-preneurs”, this means your personal network - people who can challenge you and help generate ideas (the process is likely to be 90% give, 10% take).
From similar analytical findings, John’s research shows that the qualities people value most in leadership are asking great questions and the ability to listen. When listening to your key players, ask yourself the following: What does that mean to me? How can I use that? What can I do right away? Similarly, according to John, you must be bold enough and curious enough to explore different industries as a new source of learning and growth.
When thinking of this kind of exponential growth, consider this analogy: which choice you would make if someone offered you either $1 million immediately, or 1 cent that doubles every day for 30 days? The long-term satisfaction of the latter is a perfect microcosm for John’s philosophy on internal innovation.
Jason Womack is an educator, author, entrepreneur, and CEO, among other things. He is an avid practitioner of his own philosophies on work/life balance, productivity, and forward progress, and with Master’s degrees in Education and Psychology, is well-educated in the way we think. These facets of Jason’s life and work have inspired his contribution to Paper Napkin Wisdom, which is a simple straight line from point A to point B. The philosophy behind Jason’s napkin focuses on how to get to point B without getting knocked off course, how to persevere when the path gets rough, and how to focus when it gets easy.
As Jason explains, from a certain age, we are programmed to look towards “what is next” (e.g. in high school, we look towards college as the next step). This is the difference between destination-based goals and direction-based goals. “Getting through the day”, for example, is a destination-based goal - it is not necessarily a bad thing, but it may be limiting your perspective. After a few instances of concentrating on destination, however, you begin to understand your direction - the experience(s) you want to have, both in your work and your life.
Direction, according to Jason, is all about momentum. It allows you to experience - and learn from - everything along the path to point B. An exercise that Jason employs is to consistently acknowledge when something is complete, rather than rerunning it internally to find mistakes or weaknesses. This exercise not only helps to push forward, but also helps to commit to systems and processes. This creates a flow of psychology, sociology, and technology, which Jason says will help clarify your direction-based goals.
In terms of psychology (the thinking side), create an “at my best” list - an explicit inventory of conditions when you are most successful (e.g. eating a full breakfast, meeting first-thing with key players, etc). Think of this list as another version of strength-finder, where you create an opportunity to move forward. Another way to think of this is resilience. Most would consider resilience when faced with major, life-changing, negative events, but Jason encourages us to also consider everyday stressors and obstacles that you get past, which indicate that you’re making progress.
The second phase - sociology - is all about support. Ask yourself who are you going to hang out with next, and decide whether that person is someone who will help you get to the next level. You will eventually find yourself in an atmosphere of mentorship, friendship, family, and support. The “who” in this instance will always have a profound impact on the “why” the “how” and the “why”, and will further influence your movement, momentum, and destination.
Finally, Jason talks about technology. Rather than just the screen size, battery life, and cord length, Jason refers to any tool that will help with tracking and accountability. In other words, how do you utilize the tools - high- and low-tech - available to you in order to keep moving forward? How do you track yourself and what systems do you employ?
From these three areas, Jason has developed three questions to ask yourself on a daily basis to help focus your direction: 1) what did I complete today? 2) who can I acknowledge today? 3) what am I grateful for today? This exercise will help show that everything is relative - both the successes and the failures (e.g. the guy without shoes complains until he sees the guy without feet). It also creates a powerful historical record to show that something that seems significant now might not seem that way a few months or years later.
As entrepreneurs, we are experts in cognitive dissonance, according to Jason - the ability to notice a gap or when something is off. We must challenge ourselves also to notice what is there and what is “on”.
My very Uncommon Opinion: buying a house is a good investment
These days, it seems to be all the rage to tell people to “never buy a house.” Folks like Grant Cardone and James Altucher argue that buying a home eats up too much capital and never allows for a good return on investment. Well, to put this bluntly: They’re wrong, and I have the facts to prove it.
How much money are you really putting down?
If you’re an average millennial with decent credit, you’ll usually only be putting down 10% when you purchase your first home – far from some online arguments that assume a 20% to 40% down payment when arguing against home buying. That’s a big difference – $30,000 vs. up to $120,000 for a $300,000 home. Don’t rely on inaccurate assumptions; estimate what your down payment would be before deciding that buying isn’t for you.
People are overbuying on their first (or second, or third) house
When most people look at a mortgage offer from a bank, they purchase the most expensive house the bank will allow them to afford, which is a terrible idea. If a bank extends someone the credit to buy a $500,000 house, but a $300,000 home fits most of their needs, the less expensive home is a better financial and lifestyle choice. Remember, overextending yourself means you are actually buying a mortgage, not a house.
Many of the arguments against buying overlook making a sensible purchase, and use examples in which individuals are buying the most expensive home they can get their hands on. That seriously sways the numbers in favor of renting. Just because others are doing this doesn’t mean you have to – get a less expensive home so you can save and place more money into investment vehicles with a higher rate of return, or spend the difference on things you are passionate about.
Money spent on upgrading your lifestyle or yourself, such as traveling the world or finally firing up that great business idea, are a far better investment than a fancy address. Plus, you can always upgrade later, if you want.
Keep in mind, you have to live somewhere
One of the traditional arguments for buying a home is that you’re spending money on rent anyway, so you might as well invest it in something. This is still correct. As long as you make smart choices when you purchase a home, it’s better to invest in your own property rather than pay a landlord.
Think about it this way – you’re going to lose a lot of money renting over the years. If you lose less money over time by owning a house, you’ve made a great financial choice.
Homes nearly always appreciate in value, especially with maintenance and ‘smart’ improvements
If you let your home deteriorate and don’t maintain it, it’s a no-brainer that its value will decrease over time. However, if you maintain your home by investing in improvements that can increase its resale value, it’s likely to significantly increase in value over time.
Examples of improvements with a high rate of return include installing high-quality floors, maintaining bathrooms, and upgrading your home’s kitchen. Unfortunately, improvements to the backyard such as landscaping have low ROI, so you should avoid spending too much on them if you’re trying to maximize your home’s value.
Will I be stuck in my house forever?
Unlike what some folks say, buying a home doesn't chain you to one address for life. Unless you get really unlucky and purchase a place for well over its market value, you’re not going to get stuck for long – just sell the house and move into another. If you can’t, simply rent out your property and rent another somewhere else while you sort things out and wait for the original home’s value to increase.
Is this a good time to buy?
The housing crash of 2008 is still in recent memory and it has many first-time home buyers scared that they could overpay, only to see their residence quickly crash in value. So, to determine whether the housing market is overvalued (and thus headed for a bust) or if it still has a lot of room for stable growth, check out an analysis done by The Economist for a quick snapshot.
The magazine’s data team looked at two numbers: the ratio of price to income and price to rent, and found that houses in most American cities appear to be at fair value when compared to long-term averages. Some cities, however, like San Francisco, have homes that are extremely expensive compared to average incomes (meaning they could be destined for a fast fall), so it’s a good idea to dig into a city’s price-to-income and price-to-rent ratios before buying property there.
Profiting off of your home equity using “The Smith Manoeuvre” (for Canadian homeowners)
In the U.S., home mortgage payments are tax deductible (as long as it’s a primary residence), but in Canada, homeowners aren’t quite so lucky. However, Canadians can take out a home equity loan in order to invest money in income-producing entities (like dividend-paying stocks or rental property), and use the tax return to further pay down their mortgages.
It’s called the Smith Manoeuvre, and while it sounds complex, it’s a fantastic way for many homeowners to develop a sizeable investment portfolio and pay their mortgage at the same time. If you’re considering doing this, you should be confident in your investing skills – and be prepared with a Plan B if you need to move and the market goes down.
The bottom line: You should probably own a house
Should everyone go out right now and buy a house? Well, maybe not everyone. But if you're like most young people who earn a steady income and want to invest in their future, it’s absolutely the right move. If you still don’t believe me, run the numbers yourself with this calculator. It takes into account rent prices, mortgage rates, inflation levels, taxes, and variety of other factors to compare the long-term costs of renting vs. buying a residence.