Creative Monopoly

Peter Thiel believes that all happy companies have one thing in common.  They create a monopoly by solving a problem that no one knew existed.  Monopolies are a necessary part of progress, because the outsized profits associated with a monopoly are the only way to justify the huge risk.  Here are Peter’s 4 characteristics of a monopoly:

  1. Proprietary Technology: You need a 10x improvement from anything else that currently exists.  One full order of magnitude.
  2. Network Effects: Its more useful the more people that use it.  Like Facebook.
  3. Economies of Scale: The company gets stronger with more sales.  This is why it’s easier to create a monopoly with software than a service business.  Great scale should be built into the original design.
  4. Branding:  Think Apple.

When Steve Jobs came back to Apple, he slashed any product lines that he couldn’t see at least a 10x improvement.  Don’t just improve on something that already exists, create something new.  Just like all happy companies have one thing in common, all failed companies do as well.  They failed to escape competition.  My big takeaway is that any company can create their version of a creative monopoly if they focus on solving a problem that no one in their space knows exists -- If they focus on how to create an offering that is 10x better and different.

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Zero to One

Peter Thiel is one of the most successful and forward thinking entrepreneurs in the world.  He is most recognized for being the founder of Pay Pal and the first outside investor in Facebook.  Here are a few takeaways from his book Zero to One:

  • He always asks people a contrarian question, “What important truth do most people disagree with you on?”  It must be framed as, “Most people believe in X, but the truth is the opposite of X.”  Good answers to this question will determine the opportunities of the future.  
  • He believes that brilliant thinkers are rare, but courage is even more rare.
  • It’s not wrong to imagine a better future, but it is a mistake to just expect it.  Creating a better future won’t just happen, it is up to those with the foresight to see what needs to be done and the courage to actually do it.
  • What does everyone agree on?  If you can find a delusionary popular belief, there is a huge opportunity in identifying what’s hidden behind it. 
  • The most contrarian thing you can do is not go against the crowd but to simply think.  What great company is nobody building?

Horizontal progress is taking things that work somewhere and rolling it out everywhere.  Vertical Progress is doing something no one else has done, this is known as Zero to One.  His answer to the contrarian question is, “Most people think the future of the world will be defined by globalization.  But the truth is that technology matters more.  Without technological change, if developing nations around the world lived like Americans the environmental impact would be catastrophic.  Therefore, globalization without technological advances is not sustainable.”  My big takeaway is that if you want to do something that will truly make an impact in the future, the opportunity lies behind a delusionary popular belief, behind a truth that the rest of the world does not see.  If you can find that truth, you can go from Zero to One.

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Changing Hearts

This past Mother’s Day we were blessed to have Sonny Perdue speak at our church.  His message began with the acknowledgement that we live in a world today where Christians are the most persecuted religious group across the globe.  Christians are even under attack in our own country.  Sonny mentioned a USDA employee that was recently fired for respectfully asking to sit out of an exercise that was contrary to his religious beliefs.  So he posed the question, “How are we to live and act in this day and age while Christianity is under attack in so many different ways around the globe?”  His answer referred to scripture.

Matthew 5:16 states, “In the same way, let your light shine before others, that they may see your good deeds and glorify your Father in heaven.“

There is no better example in the Bible of letting your light shine before others than Daniel.  Daniel lived in full obedience to the Lord and was unintimidated when they threw him in the Lion’s den for breaking their law and praying to his heavenly Father.  King Darius saw that Daniel was unafraid and that God protected him from the Lions.  He said in Daniel 6:26, “I issue a decree that in every part of my kingdom people must fear and reverence the God of Daniel.  For he is the living God and he endures forever; his kingdom will not be destroyed, his dominion will never end.”

Daniel lived his life in such obedience and faithfulness that king Darius glorified the living God.  Sonny challenged us to do the same.  I am thankful to have Godly men serving our country that are not afraid to share the gospel through their words and actions.  He ended by saying, “God can change hearts, through our lives, with his power.” 

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Discovering Purpose

Erik Barker, author of “Barking up the Wrong Tree” challenges many of the principles that we are taught will supposedly lead to success.  He posed the question, “Why is it that some days, I can conquer the world.  And other days, it takes me three hours to convince myself to shower?”  Through his research, he discovered one secret that must be included in your morning ritual or EMSR (Early Morning Success Routine) if you want to ensure that you are ready to conquer the world.  Your routine must include the feeling of a sense of purpose.  Here is why:

  1. Dan Pink believes that feeling a sense of purpose is one of the most motivating things in the known universe.  His definition of purpose is, “Am I doing something in service of a cause larger than myself, or, at the very least, am I making a contribution in my own world?”  
  2. Feeling a sense of purpose in the morning not only makes you feel alive, it actually keeps you alive.  Researchers at Tohoku university in Japan did a 7 year study of over 43,000 adults, ages 40-79 asking if they had a meaning in life and then tracked their health.  95% of the people who reported having a meaning in life were still alive 7 years later versus only 83% of the ones who did not.
  3. If feeling alive and living longer isn’t enough, another one of his studies found that purpose is sexy.  Erik’s research found an interaction between physical attractiveness and meaning in life, with more meaning in life contributing to greater interpersonal appeal for those of low and average physical attractiveness.

So naturally the next question is how do we discover purpose in a “normal life” without dropping everything to become missionaries in the rain forest?  Duke professor Dan Ariely suggests that you can create purpose by reframing any experience through a different lens.  You might not be able to change “What” you have to do but you can change “How” you see it.  When you look at any situation through the lens of how it can help others, you’ll find it more purposeful and motivating.  My takeaway is that all of us can start the day with a sense of purpose if we spend a few moments thinking through how we can positively impact those within our circle of influence.

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Daily Miracle

Despite being published in 1910, Arnold Bennett’s book How to Live on 24 Hours a Day is a great guide for the ageless question of “How can we make the best use of our time and lives?”  He begins by addressing our counter-intuitive tendency to value money over time.  When in fact, he argues that time is a great deal more valuable than money.  If you have time, you can obtain money, but you cannot buy yourself a minute more time.  Here are few more thoughts from Arnold on how to make the most of your time and your life:

  • Pursue your dreams, even if you fail.  It is the trying which matters, the journey which fulfills us.  He uses this story as an example: “A man may desire to go to Mecca… he fares forth, he may probably never reach Mecca; he may drown before he reaches the port; he may perish ingloriously on the coast of the Red Sea; his desire may remain eternally frustrated.  Unfulfilled aspirations may always trouble him.  But he will not be tormented in the same way as the man who never leaves Brixton.”  His message is simple, it is better to try and fail than to live with the regret of never trying.
  • It is never too late to improve yourself.  You can turn over a new leaf every hour if you choose.  Employ an hour and a half each evening to cultivating the mind.  This can only be accomplished if we stop the mindless diversions of Netflix, Snapchat and Facebook.
  • We can plan specific pursuits for our spare time, rather than flitting it away.  Find a specific diversion.  When you have something definite to look forward to, something that is to employ all your energy – the thought of that something gives a glow and more intense energy to the whole day.
  • Most of us overestimate the amount of time we actually spend working.  The average worker is only productive for 3 hours per day.  The rest is spent on social media, gossiping, lunch and other distractions.  If you are able to stay productive in your work and complete your responsibilities efficiently, you will be amazed at how much time you actually have to focus on other meaningful things.

The supply of time is truly a daily miracle.  You wake up in the morning and your purse is magically filled with 24 hours of the unmanufactured tissue of the universe of your life!  It is yours.  We shall never have more time.  My hope is that you will remember and take with you Arnold's quote, “We have, and have always had, all the time there is.”

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Sunday Blog: Hand Tailored Blessings

I believe that trials and tribulations are part of God's perfect design.  We should not resist or run from difficulties, but rather view them as hand tailored blessings designed for our benefit and growth.  Embrace all the circumstances that God allows in your life, trusting that he will bring good out of them.  View problems as opportunities to rely more fully on him.   

Paul told the Philippians:

Don't be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. Philippians 4:6

My prayer is that I will never be anxious about worldly problems.  And I will come to God with thanksgiving for his many hand tailored blessings hidden in trials and tribulations.  

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Remove the Thumbtack

If you find yourself sitting on a thumbtack, don't take an aspirin to numb the pain, remove the thumbtack.  This is an accurate analogy for how we many times attack problem solving.  We focus on treating the symptoms rather than finding the root.   I have learned from experience that when it comes to innovation or continuous improvement, throwing money at symptoms can be a very expensive endeavor that will leave you with the same recurring problem.  Here are a few thoughts on how to remove the thumbtack:

1) Make time to take a step out of the weeds.  The day to day weeds are full of symptoms.  If you don't allow yourself to step out of the weeds it will hard to see the forest from the trees, or the root from the symptoms. 

2) Rapidly conduct small tests, testing each hypothesis.  Iterating quickly and inexpensively is the best way to find the root. 

3) Sort it out on a whiteboard with multiple perspectives.  The more solution oriented minds that you can get on a problem solving session the better.

4) Learn from other industries.  Regardless of what you are trying to do, there is a good chance someone else has done something similar. 

Taking the road less traveled and blazing new trails isn't easy.  As you strive to innovate and improve, I hope you will find the best way to remove the thumbtack rather than just numb the pain.   

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Ultimate Sophistication

This past week I went on a brief retreat with a few entrepreneurial friends. While together we went through the exercise of creating a 5 year plan for our businesses. Part of the exercise was to think back and write down the specific things, that are unique to us, that got us to where we are today. There were 3 uniquely simple things that got Swift Straw to where we are today:

1) We always treat every customer request with an extremely high sense of urgency. I have been amazed by how much business we have won by simply treating every customer need with urgency.    

2) We find ways to say "Yes" to our customers. In fact, no one in our company is allowed to tell a customer "No." With enough collaboration and critical thinking, every customer problem has a solution. I have been amazed by how much business we have won by finding ways to say "Yes" when our competition says "No."

3) We continuously grow, improve and find better ways to do things. Everything we do is constantly challenged. Saying "That's the way we've always done it" might be the fastest way to find yourself looking for a new home.

After reflecting on our unique characteristics I am still amazed that 3 things so simple can also be unique. I guess Leonardo Da Vinci was right when he said, "Simplicity is the ultimate sophistication."

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Sunday Blog: He Lives!

I was fortunate to experience another great event at "Purpose on Tap."  The speaker, Ross Mason, is an amazing person who has dedicated his life to expanding God's kingdom through service, entrepreneurship and innovation.  Several years ago he was paralyzed in an accident while training for an iron man.   While in the ambulance the paramedics were shocked that he was cracking jokes and having a good time.  

They said, "Don't you know you could die at any second?"  

He laughed and said, "Jesus Christ is my Lord and Savior, so I'm either going to see Him in a minute or He will keep me here because He has bigger plans for me."

He then walked through a number of miraculous events in his life since that point that could only be explained as miracles directly from the Living God.  My big takeaway from his message is a reminder that we worship and serve a living God, not a statue or monument for the past.   He is the living God, the eternal king and the only one capable of the many miracles that we experience in this life. 

"But the Lord is the true God.  He is the living God, the eternal king.  When he is angry the earth trembles, the nations cannot endure his wrath." Jeremiah 10:10

My prayer is that we will never forget that we serve an awesome, omnipotent, miraculous, eternal and living God.   

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Overcoming Dark Days

Having been a part of multiple start up businesses and start up operations within existing businesses, I am still amazed at how hard it actually is.  I believe that these inevitable start up struggles are a very intentional part of God's perfect design. 

Here are a few thoughts on the 3 phases of any start up initiative:

1) The first phase, known as the idea phase, is so exciting and emotionally appealing that it allows you to overlook the storms that lie ahead.  We have grand visions about all the wonderful possibilities.   Without this intoxicating phase most of us would quit before we start.  

2) The next phase consists of the dark days and maximum struggle.  During this phase you face every possible challenge and struggle in the book.  Whatever can go wrong will go wrong all at the same time.   This phase forces rapid learning that could be accomplished no other way.  This phase weeds out the ones that don't have the grit or stamina to persevere through. 

3) The next phase is the traction phase.  Once you have made it through the dark days you will wake up one day and things are just moving.   By no means is it easy but it is certainly easier.  During this phase your focus is not as much about rapid learning and survival as it is about growth, leadership and developing a strong culture.  These are the things that will drive the traction phase and will drive your growth as a person and a leader. 

"Consider it pure joy, my brothers, whenever you face trials of many kinds, because you know that the testing of your faith develops perseverance.  Perseverance must finish its work so that you may be mature and complete, not lacking anything."

James 1:2-4

I am thankful for the gift of challenge and struggle, so that we may persevere through and become mature and complete.  

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The Third Alternative

Unless you plan to go through life as a loner, the better you are at mastering the art of relationships the easier life will be.  Whether you are part of a friendship, marriage, formal partnership or a team, there is a fundamental mindset that will determine the health of your relationships.  

Stephen Covey referenced the principle of "Win/Win" as the 4th habit in his famous book 7 Habits of Highly Effective People.  

Stephen says, "Win/Win is the belief in a third alternative.   It's not your way or my way; it's a better way; a higher way." 

The principle of Win/Win simply means that you are always looking for resolutions that are good for all parties involved, not just your own self interest.  When everyone in the group is looking for a win/win they can move harmoniously forward.  On the other hand, groups consisting of individual agendas become quickly fragmented and torn apart by selfish tendencies.  

We all have a natural tendency to look out for our own self interests, to look at things through our own perspective.  The problem is that our perspective clouds our judgement, thinking that it must be a universal truth.  We must acknowledge that everyone has their own perspective, and in most cases they are different.  If we only look at things from our perspective we will go through life thinking everyone else is crazy for not understanding.  Making a point to acknowledge and try to understand the other parties perspective is the first step in finding a win/win which will lead to a mutually agreeable solution.  

For those who have watched Shark Tank, "Mr Wonderful" has a win/lose approach to investing while Mark Cuban typically has a win/win approach.  One of them has a net worth of over 3 billion.  I will let you figure out which of the two mindsets prevailed.

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Sunday Blog: The Battle is Won


Bill Belichick is one of the winning-est coaches in NFL history.  He has one sign in the Patriots locker room that comes from the Art of war.  It states, "Every battle is won before it is fought."  The team that is the most prepared has won the game before the first whistle blows.  

In 2 Timothy 4:7-8, Paul says "I have fought the good fight, I have finished the race, I have kept the faith.   Now there is in store for me a crown of righteousness, which the Lord, the righteousness judge, will award to me on that day - and not only to me, but also to all those who have longed for his appearing."

Christ won the battle over sin on the cross.  For those who keep the faith, the battle has already been won before it is fought.  

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Don't Mess with Our Best

I recently had the privilege of hearing the command philosophy from one of our military's best teams.  Since they requested to keep the team name anonymous, I will simply share some of their command philosophy which shows why we are so fortunate to have such amazing people in our military protecting the freedoms that we all experience every day.  Their command philosophy is as follows:

We will be quiet professionals, but we will not be meek.  

We will be aggressive but not reckless.  

We will be confident but not arrogant.  

We will work hard, be tough and won't complain.  

We will have fun and not take ourselves too seriously.  

We will accept challenges, overcome them and not accept defeat.   

We will make mistakes, but not of ethics, morals or integrity.   

We will think, plan wisely and act on instinct based on superior tough training.  

We will seize the initiative but not usurp authority. 

We will push the envelope, but stay within the intent of rules, regulations and policies. 

We will win the strategic battle by knowing our operational environment and owning the tactical fight.  

We will appreciate what we have, and will ask for what we need, not what we want.  

We will find ways to say "Yes" and minimize the use of the word "No."   

We will represent the community well always through appearance, words and actions.  

We will respect those before us and honor those no longer with us. 

We are warriors, a Family, a Team. 

We are .....

Our men and women in service are the absolute best among us and the only reason we are able to enjoy our countless freedoms.  They put the good of our country and our people ahead of their own self interest.  When I see their values and command philosophies, I understand why you don't want to mess with our best.   

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Simple, Not Easy

The majority of Americans if asked would say they would like to weigh a little less.  As the most sophisticated culture in history, it seems odd to me that we also struggle the most with health and wellness.  The solution for being healthy may be simpler than we are made to believe.  There are so many powerful influences in the pharmaceutical, food and agricultural industries confusing us about what is and isn't healthy.  

The first and most important component of a healthy lifestyle is to have balanced primary foods.  Primary foods are things such as relationships, spirituality, physical activity, career etc.  Without balance in your primary foods there isn't enough broccoli to keep you healthy.  Once your primary foods are covered, here are 10 tips to help stay light and fit:

1) Drink water, half your body weight in ounces is a good rule of thumb.  (200 lbs = 100 ounces per day).  Hunger is many times confused with dehydration.  

2) Eat real carbs like fruits, vegetables, whole grains, nuts, seeds and legumes which will slow digestion and promote stable blood sugar levels. 

3) Eat healthy fats such as nuts, seeds, fish, avocados and extra virgin olive oil.  Your body uses these for energy, healthy air, skin, nails and brain function.   

4) Eat lean protein.  When eating animal protein, be conscious of how the animal was raised with grass fed and free range being Optimal.  

5) Eat breakfast.  When we miss our first fuel of the day it sets us up for nibbling and snacking for the rest of the day.   

6) Eat more frequently.  Feeding your body on a regular basis lets it know that food is available and it's okay to burn energy rather than conserve it and store is as fat.  

7) Exercise your body and mind.  The more active your body and brain, the healthier you will be.  If you have a fit bit, shoot for at least 10,000 steps per day. 

8) Sleep!  7-8 hours per day.   People that get less than 5 hours of sleep per night average 5 lbs more than those who get adequate sleep.  

9) Learn to cook.   This allows you to control portion size and use healthy ingredients. 

10) Keep track of what you eat.  Consciously avoid sugars, trans fats, high fructose corn syrup and long chemical names.  You wouldn't feed your favorite pet poison, so give yourself the same courtesy.    

Warren Buffett says that investing is "Simple, not easy."   Being healthy is the same way.   Through desire, education and awareness, my hope is that we can make the simplicity  of being healthy a little easier.   

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Sunday Blog: Let It Go

Mark 10: 17-27 states:  

As Jesus started on his way, a man ran up to him and fell on his knees before him.  “Good Teacher” he asked, “what must I do to inherit eternal life?”  “Why do you call me good?” Jesus answered.  “No one is good – except God alone.  You know the commandments: ‘You shall not murder, you shall not commit adultery, you shall not steal, you shall not give false testimony, you shall not defraud, honor your father and mother.’ ”  “Teacher” he declared, “all these things I have kept since I was a boy.”  Jesus looked at him and loved him.  “One thing you lack” he said.  “Go, sell everything you have and give to the poor and you will have treasure in heaven.  Then come, follow me.”  At this the man’s face fell.  He went away sad, because he had great wealth.  Jesus looked around and said to his disciples.  “How hard it is for the rich to enter the kingdom of God!”  The disciples were amazed at his words.  But Jesus said again, “Children, how hard it is to enter the kingdom of God!  It is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.”  The disciples were even more amazed, and said to each other, “who then can be saved?”  Jesus looked at them and said, “with man this is impossible, but not with God; all things are possible with God.”

I believe this to be one of the most important but often misunderstood stories in the New Testament.  Many people often misunderstand the message because they get caught up in Jesus’s command for the man to give away all of his money.  If you look deeper, here are a few interesting things you will find:

  1. You will see that “Jesus looked at him and loved him.”  When he looked inside the man’s heart, he could tell it was centered around things and material wealth.
  2. Jesus referenced all of the relationship commandments because this is the one thing that this man lacked.  He wanted the man to see that all of the things of the world mean nothing without a relationship with him and the Father.
  3. He asked the man to “Come, follow me.”  This is the answer to his initial question, “What must I do to inherit eternal life?” 

Jesus knew that this man would have to let go of his material things in order to have a relationship with and follow him.  When Jesus says to give all of your money away, he doesn’t literally mean for you to go clear your bank account and drop it off at the soup kitchen.  What he means is to let go of anything that is keeping you from having a relationship with him.  It could be money or it could be something else.  He wants to have all of you, so that you can have all of him, eternal life and more.

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Grow Baby!

There are two types of mindsets, fixed and growth.  The fixed mindset believes that certain things are in a fixed state of being.  They are what they are.  Someone is either smart or not, a good athlete or not, lucky or not.  The growth mindset on the other hand believes that the world is limitless because any trait or opportunity can evolve and change through continuous growth.  The growth mindset believes that their is no limit to how smart, athletic or "lucky" you can become through application and experience.  Here are a few quotes that represent the growth mindset:

"Strength and Growth come only through continuous effort and struggle."  Napoleon Hill. 

"Intellectual growth commences at birth and should cease only at death."  Albert Einstein

"There are no great limits to growth because there are no limits to human intelligence, imagination and wonder."  Ronald Reagan

"Confidence is a plant of slow growth in an aged heart."  William Pitt

"Conformity is the jailer of freedom and enemy of Growth." John F Kennedy

I challenge you to take a minute and reflect on which mindset you have.   If you find yourself complaining often, consider yourself unlucky or blame others for your circumstance, you likely have fixed mindset tendencies.  If you believe anything is possible, you believe that you own your future and you embrace challenge and struggle as a wonderful part of growth, then you likely have growth mindset tendencies.   Remember that impossible is a fixed mindset opinion, not a fact.  

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After interviewing some of the wealthiest investors in the world, Tony Robbins found that there were 4 consistent principles and patterns that they all shared:

  1. Don’t lose.  Not how can I make it, but how can I not lose.  Warren Buffett said there are two rules in investing.  The number one rule is don’t lose money.  The second rule is don’t forget the first rule.  Asset allocation is one of the ways that they reduce the risk of losing and protect themselves from surprises.  Invest in such a way that you are expecting the unexpected.
  2. Go for Asymmetric risk reward.  They don’t fall for high risk high reward.  They patiently look for deals that offer a high reward with disproportionally low risk.  Paul Tudor Jones has a 5 to 1 rule.  He looks for investments with low risk that stand to make a 5x return.  If he makes 5 investments of $1 each and only 2 of them pan out 5 to 1, he still doubles his money with a 40% batting average.  When Warren Buffet buys a high-quality stock during a downturn his risk becomes low and his upside becomes huge.  He looks for what he calls a large “Margin of Safety.”
  3. Plan for maximum tax efficiency.  You won’t be able to accumulate wealth if all of your hard-earned money is going to Uncle Sam.
  4. Diversify.  They invest little by little over time and they diversify across many asset classes.  Ray Dalio said that no matter what class you are invested in, it will drop 50-70% at some point in time.  If you are not diversified when that time comes you could severely break rule number 1.

Courage is not the absence of fear, it’s triumph in the face of fear.  My hope is that you will use the principle and patterns of the some of the wealthiest people on earth to have triumph in the face of fear and create a financial foundation that is truly unshakeable.

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Sunday Blog: Good News!

2017 years ago, the Jewish group known as the Pharisees lived in Judea under Roman rule.  The Romans had a very progressive "anything goes" culture while the Pharisees lived under the extremely high standards of Jewish law.  Many of the Pharisees prided themselves in their strict avoidance of obvious, outward sin.  As you can imagine, the Romans did not appreciate being accused of living a sinful lifestyle, which led to constant turmoil between the two groups as they tried to determine whose way was right.   

When Christ came to earth he had a strikingly different message than both.  He said in John 14:6:

"I am the way and the truth and the life.  No one comes to the father except through me."  

Since that message didn't fit with the Romans or the Pharisees, they came together and conspired to kill him.

There is a striking difference between religion and the good news of the Gospel.  Religion is typically accompanied with a strict code of conduct that is nearly impossible to follow.  As sinners, many struggle to sign up for something where they know they will fail.  But the good news of the gospel is that:

John 3:16: "God so loved the world, that he gave his one and only son, that whoever believes in him shall not perish but have eternal life."

The good news of the Gospel is that Christ overcame sin when he died on the cross.  Christ is the way to the Father, not our adherence to a strict code of conduct or good deeds.  The good news of the Gospel is that the way to the Father and eternal salvation does not have to be earned, but rather accepted as a gift through faith in Jesus.  As a world class sinner, I am thankful for that awesome gift.

My prayer is that you will celebrate the good news of the Gospel and accept the truly awesome gift.  Happy Easter to you and yours!

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Freedom Facts

Warren Buffett said, “The stock market is a device for transferring money from the impatient to the patient." In Tony Robbins recent book, “Unshakeable,” he walks through seven wealth building facts that explain why this is true.  Once you master the principles of wealth building, you will be free from the emotional trap that the impatient fall into.  Here are the seven freedom facts that we all need to know to create wealth in the stock market:

  1. Since the year 1900, the stock market has experienced a “Correction” on average once per year.  A correction is a pullback of at least 10%.  They average around 54 days with the average drop being around 14%.
  2. Less than 20% of all “Corrections” become a “Crash.”  A crash is a pullback of at least 20%. 
  3. No one can consistently predict the market rising or falling.  Many people are right on occasion but no one in history has been able to predict specific market moves consistently.  Remember that even a broken watch is right twice a day.
  4. With many ups and downs the stock market will rise over time. 
  5. Historically bear markets happen every 3 to 5 years.  In the last 35 years, there have been 7 bear markets with the average drop being 33%.  On average, they last about a year.  The market typically recovers very quickly so if you panic and move to cash during a correction you will miss the rally.
  6. Bear markets become bull markets without exception.  Therefore, Warren Buffet likes to be greedy when others are fearful.  He knows how quickly things will turn.  Consumer pessimism is the perfect time to invest.
  7. You will never time it just right, so the greatest danger is being out of the market.  Over 20 years if you missed the top 30 days your returns are reduced to almost zero.  The top 10 trading days immediately followed the top 10 worst trading days.  Being out of the market is riskier than a correction.

When you look at the freedom facts, you realize that corrections and crashes are nothing to fear.  In fact, corrections and crashes are just another season that we should look forward to.  Although scary at times, winter is exciting because it is always followed by spring.  If you learn the principles of wealth building and remove the emotional tendencies, you can be on Warren Buffet’s side of the trade as he patiently waits for everything to go on sale.

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Maximum Productivity

In 1918, Charles Schwab, president of Bethlehem steel company hired a consultant named Ivy Lee to help his executive team become more productive.  Ivy Lee said that he had exactly what he needed.  When Charles asked what it would cost, he said nothing.  The deal they made was that Lee would spend 15 minutes with his team and give them an exercise for three months.  At the end of three months Charles would send him a check for whatever he determined it was worth. The exercise went like this:

  1. At the end of each day, write down the top 6 things that you need to accomplish tomorrow.
  2. Prioritize them one through 6.
  3. Tomorrow, work on the highest priority one and don’t move to the next until it is complete.
  4. Move any unfinished items to tomorrow’s list.
  5. Repeat each day.

At the end of the three month trial period, Charles sent Lee a check for $25,000 which was a tremendous amount of money at the time.  The science behind this productivity tip is that humans are not good at multi-tasking.  Dr. Earl Miller, neuroscientist at MIT, says "You cannot focus on one thing while doing another. That's because of what's called interference between the two tasks.  They both involve communicating via speech or the written word, so there's a lot of conflict between the two of them."  We simply cannot multi-task because similar tasks fight for the same part of the brain. 

But, Lee and Miller both discovered that we are able to shift our focus from one thing to the next with astonishing speed.  Switching from task to task works while trying to focus on two at the same time does not.  One effective way that I have found to organize and prioritize action items or tasks is through what is called a “brain dump.”  A brain dump is a complete transfer of accessible knowledge about a particular subject from your brain to some other storage medium, such as paper.  If you become stressed or overwhelmed due to how many to do’s or action items you “have on your plate” there is nothing more effective than a brain dump to organize and prioritize them into actionable tasks that can be swiftly worked through.  Here is how it works:

Block off a few minutes of time at the beginning of your week, grab a pen and a blank piece of paper then turn your phone on airplane mode.  Completely dump everything you have to do in the coming week onto the piece of paper.  This should cover personal, professional, family and any other task that needs to get done.  Once your brain has been totally cleared and everything is written down in front of you, you are now ready to organize and prioritize your thoughts into actionable tasks that can be accomplished throughout the week.  Not only does this exercise allow you to organize and prioritize, but the clearing of the brain allows you to think more clearly and effectively while you plan your week.

If you strive for maximum productivity, start with a brain dump, then organize and prioritize everything that’s about to get done.

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