The Club Mastermind, LLC

As I told you in last week's Seeds of Success (you can read it here) I want to share a very thought-provoking story with you.

This story will make you look closely at how you want to live your life.

(I am only repeating this story as I recall it... it is not my original work and regrettably I do not know its source.)

OK... let's say you and nine of your friends meet every week at your favorite restaurant and have a nice meal and share good times with one another.

Now, historically, each of you - ten total - have been paying for your own meals.  This works great, until, one day, two friends in your group get laid off.

Everyone is nice about it. No one wants to stop having lunch with these two good friends! So, a vote is held, and it is decided that the other eight, you included, would pay for the cost of these two friends' meals.  Not a big deal... after all, it's just the cost of two meals divided amongst eight people.

And besides, everyone likes the company of these two close friends.

One week later, these two friends have still not found a job. But, you, on the other hand, have some great news to share! You have been promoted to a higher-paying position in your company.

You have worked very hard to earn that position - working evenings and weekends to get there. You are, of course, very proud...as are your friends, of your success.

About a month after your announcement (you still actively participate in these weekly lunches to stay in touch with your dear friends), three other friends reveal that they too have, unfortunately, have lost their jobs. 

After much discussion, it is agreed that a vote should be taken to see if the remaining five individuals with jobs should pay for cost of the meals for the five without jobs. 

Your group of very close friends is just about ready to vote, when one of the five who still have a job, stops the process and suggests:

"Hey, I'm just barely getting by myself. I can't afford to carry the extra costs, I propose that we vote to have (Insert Your Name Here) pay for all of us since (Insert Your Name Here) has a very high-paying job and they can afford it!" 

Before you can even object to this approach, your nine "friends" vote to have you pay for their lunch every week.  Needless to say, you are not happy.

Over the course of the next couple weeks, you grudgingly participate in the lunches, because you really did enjoy the company of your "friends."

Then, you notice something very disturbing happening... as each week passes, the other nine "friends" who weren't paying for their meals start to order more and more expensive items.  And every time you start to object, they just shoot you down.

"You only care about yourself! What about OUR well-being?" they object.

The last straw comes unexpectedly. The owner of the restaurant approaches the group and indicates that, since you all have been faithfully coming to his restaurant for so long, he is going to give the group a 20% discount off of this week's bill. 

Everyone cheers (especially you), until you hear your "friends" start to discuss how they were going to spend their portion of the 20% discount. 

After hearing this discussion and seeing that your "friends" were serious about believing that they were entitled to spending your money - what they considered their portion of that 20% discount - you just got up without saying a word and walked out.

As you were leaving you hear the owner ask, "Who is going to pay for this large bill?" In the distance, your former friends proclaim how selfish you were to be walking out and making them have to pay for their own meals.

Just as you get to your car, one of your former friends, who had been elected the "well-being" chairman, stops you. He explains that, since your nine friends had agreed via a properly-cast vote for you to pay for their weekly lunches, you are obligated to pay for as long as you have the ability.

I believe it was Karl Marx who made this statement about Socialism:

"From each according to their ability, to each according to their needs."

As real estate investors, we have the unique ability to earn large sums of income and build large amounts of wealth through our efforts.  Oftentimes, for most successful investors, the income or wealth earned or created is vastly more than anything we have accomplished previously...thereby outdistancing our peers in short order.

So...the question you must ask yourself as an investor is: how much of your rewards do you want to have taken from you and "given" to those who have no desire to take the risks...and more than likely are unwilling even to make the effort...especially when they can live comfortably from your efforts?

And then, ask yourself - if the fruits - the rewards - of the risks you take are not yours to enjoy, where will you find the motivation to take the risks? And how will you afford to stay afloat financially when the risks don't work out for you?

I know what my answer is... Do you?

This is why I recommend Atlas Shrugged. By reading the book, you will meet several fictional characters who are productive business people like yourself - and you will find out how and why they chose to respond to pleas for to support "the greater good" from their "friends."

Without seeing how John Galt (a legendary figure in Atlas Shrugged) responded, you are likely to simply go along with what everyone else is doing.

But if you choose to just go along with it - you should ask yourself - do I understand the philosophy behind being a real estate investor?

Today - in this market - in the midst of the bailout - is when philosophy and real estate investing meet.

And if you don't understand your own philosophy, how will you know how to respond?

To your success,

Pete