CW 247: Improve Your Negotiating Skills with Stuart Diamond Author of ‘Getting More: How to Negotiate to Achieve Your Goals’

Welcome to Creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven't thought of before. And a new slant on investing fresh, new approaches to America's best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self made multimillionaire who not only talks the talk, but walks the walk. He's been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason's footsteps on the road to financial freedom. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Hey, welcome to the Creating wealth show and thank you so much for joining me today. This is Jason Hartman, your host and this is episode number 247. You know, adaptation. Adaptation is key to survival, whether it be in business, nature, whether you're talking about Darwinism or whatever the case, adaptation and flexibility in your approach. We've noticed that the trees that get damaged and knocked over in a storm are the ones that are rigid, while the ones that bend and the ones that go with the wind are the ones that survive the storm. And that's the key, really it is. And you know, we talk about income property being a multi dimensional asset class. So regardless of what is happening out there, whether prices are going up or down in terms of the overall value of the property, if they're going down, for example, we treat it as an income producing asset, treat it like a bond, don't trade it. The property is sustainable because we believe in sustainable investing. So we just milk it for cash flow. If properties are appreciated, which I don't think we're going to have anytime soon in any real way, then we can flip the properties, we can sell them and we can make large capital gain investments. And those are obviously much more speculative. But you know, hey, I've been on the right side of that equation many times and profited very handsomely. So adaptation is key in anything in life, being flexible in one's approach so that we can adapt and seek out opportunities where they lie. And you know, I saw an interesting thing, it was on Facebook, one of my friends posted this and it really reminded me of my approach to income property investing. I've said for several years now I am no longer an optimist. In fact, I am very pessimistic about many, many things with the world nowadays, especially as they come to economics and to situations with governments and businesses and Wall street and so forth. But in many ways I am an optimist. So I say, though as far as a clear economic perspective, I am no longer an optimist overall. But again, in this statement, there are ways to make it optimistic and ways to profit. I am no longer an optimist overall, though I am not a pessimist either. I am not even a realist. I am an opportunist. And that's what you should be, an opportunist. Anyway, one of my friends posted this cute little thing. It says dear optimist, pessimist, realist. While you guys were busy arguing about the glass of water, I drank it. Sincerely, the opportunist. And that's exactly the way you need to be. Stop listening to all your friends and the naysayers and your relatives who may be well intentioned or may not be. Just be an opportunist and take advantage of the opportunities out there. But speaking of adaptation, one of America's most renowned companies, Kodak, Kodak Shutterfly, recently acquired them, or at least part of their business for only $23.8 million. This is really an unbelievable story when you see a company that made so many blunders along the way to digital photography. Remember when the transition was starting to occur from digital or from film to digital, Kodak came out with this in between thing and they spent a ton of money on it. And it was really, I used to use it for a couple of years there, but it was really not a good idea. They should have just stuck with regular film and let it die its natural death and then moved into digital. But yet they tried to bridge that gap with something. You remember what it was. It was called Advantex. Advantix I X T I X. At the end, Advantix and Kodak has basically died. I mean, Shutterfly bought their online business for only $23.8 million. And they say that they really did it for the patents. And they say those patents could be worth $2 billion. But Apple is claiming that it owns one of the patents and is seeking approval from the U.S. bankruptcy court in New York to sue Kodak over this patent dispute. So will we see Kodak reemerge from bankruptcy as a lean, mean, slim, trimmed down innovative company again? I don't know. Unfortunately, I kind of doubt it. But that's an example, I think, of another company that probably will just go down in history as a dinosaur. One of America's most amazing companies in its day, Kodak, once probably, I don't know what the market cap of Kodak was but once, probably billions and billions of dollars. For sure. An amazing company. $23.8 million is what Shutterfly purchased their online photo services business for. Amazing. Really kind of sad. And the Kodak gallery itself, that business has 75 million users. And it's just, wow, just an amazing story. So that can happen to us as investors too, folks. We've got to adapt and change with times and play by the new rules. And the new rules, really the cosmic shift, the tectonic shift in the new rules was 1971, but it's been shifting ever since then quite a bit. And we talk about that on the show throughout all the episodes. You know, I talk about these funny commercial properties, and I call them funny because they're so ridiculous. Sometimes these huge pension funds and insurance company investors and big institutional investors will just drive the cap rates lower and lower and lower to squeeze out a hundred, really not 150 basis points on a deal, which is just, it's unbelievable. So look at this deal, David's Bridal. Okay. Have you heard of David's Bridle? Well, you know, I got this email. This is Lee and Associates commercial brokerage, David's Bridal in Santa Maria, California. They're offering this property at 2,060,000. And the cap rate, get this, the cap rate is only 6.25%. That stinks. This building was remodeled in 2012. It doesn't say what the actual age of it was. You've got a 10 year triple net lease. Okay, so again, investors like those for simplicity. But you know, I would like it too if the cap rate were higher. But listen to this. The building itself, the approximate size of the building is 4,860 square feet for over $2 million. Do the math, do the division. The per square foot price on this building is a whopping $423.87 per square foot. Are you kidding me? That's unbelievably expensive. You can go to jasonhartman.com and you can look at properties all day long with cap rates between 8.5%. And there may be a few that are lower, but I doubt it. And again, you know, I don't think cap rate is the ultimate measure, but it's the comparison the commercial people use. So that's what I'm doing, apples to apples. You can find cap rates on our website up to 14%. So. And per square foot cost as low as $30 per square foot. You know, I get it that a retail property is a little more expensive to Build, it's glass and steel and stucco versus sticks and bricks and stucco and siding, but not that much difference. $30 a square foot to $423 a square foot. Totally ridiculous. Hey, I want to thank our listener, Brent. Thanks for emailing me this quote the other day. And this is a great quote, by the way, and it's Milton Friedman. I'm a big fan of Milton Friedman, okay? If you haven't read any of his books, that guy just makes way too much sense. The late Milton Friedman, but just an awesome thinker about economics and government and so forth. And the quote is, inflation is taxation without legislation. Let me repeat that. Milton Friedman. Inflation is taxation without legislation. That's a great quote. And you know, Brent, really, you're right. That is absolutely true what Friedman says. However, I would only say one thing, actually. Inflation is legislated. It's not legislated directly, but it's legislated. It's like death by a million little cuts, right? Or by a thousand little cuts. A million would be too many. But, you know, death by a thousand little cuts. And what it is, it's not cuts. It's cutting us, it's cutting the value of our currency, but it's increasing government spending. And that's where you get inflation from, that constant legislation to increase spending. I served on a lot of committees and a lot of charity boards and so forth over the years. And I tell you, I was just kind of frustrated with it, because decision by committee, it just never works. You know, I would sit in those meetings and everybody wants to be nice and everybody wants to be courteous, and no one's being the real leader because it's like decision by committee. And my quote is, when it's everybody's money, it's nobody's money. Someone has got to be responsible. And this is the inherent problem with government at every level. It just doesn't work. We talk about precious metals sometimes, and just the idiocy of this. Well, I got this email from Peter Schiff, and, you know, again, I love Peter. Schiff's thinking is great. I like his books. I think he's the master of the sound bite. I lost a bunch of money investing with his company, Euro Pacific Capital. I thought they had lousy service. I was totally unimpressed. But, you know, again, to hear him talk, I like what he has to say. I mean, I'm a big fan in terms of that. I wish Peter Schiff would really make another run at government. I'd vote for him hands down. He just Makes a lot of sense to me. Here he's pitching his gold ira and the email says this, it's got a picture of Peter, it's got a, some stacks of bars of gold there, and it says investing in physical metals in your IRA is a simple process.

Much less complicated than it sounds. Many of our clients have gold and silver in their ira. You can, too. The following information illustrates the three simple steps involved. Number one, open an account with a precious metals approved IRA custodian. Okay. And tells you what his company will do. Number two, transfer funds into your new IRA account. Number three, place your metals order with Euro Pacific Precious Metals. Well, you know, I've talked about all the, the inherent problems with precious metals, gold and silver, again, I think they're okay, but defensive strategy. But here it's interesting because see the misnomer there, folks? What, what you have to do, you cannot take possession of these metals, not legally, in, within your ira. Now, I remember a prior guest on the show, Mike Dillard, was promoting that strategy. And so far as I know, it's not legal because what, you know, I asked our guy about it and he said, well, what people are doing is they get checkbook control of their ira. And, you know, I have this myself. You set up an ira, llc, you have checkbook control. And, you know, unless the IRS audits you, you know, you can go call up a precious metals dealer and buy some gold and have them ship it to you and stick it in your safe or your safe deposit box or bury it in the ground or do whatever you're going to do with it. But that's not legal. That would disqualify. That would be considered a distribution from your ira. So what Peter's plan is doing is they're saying, yes, you can buy these metals in your ira, but they will keep them, or the company they designate, Brinks, or whatever, will keep them in a safe somewhere with your name on it. Again, isn't that just fiat money, folks? That's just nonsensical to me. I don't get it. Why does anyone believe that that would actually work? That's just a form. All you're getting is paper in return for your money. If you're going to buy metals, take possession of them. And if you take possession of them, don't keep them in your house. My grandfather, he collected coins and he had a home invasion robbery. So you mustn't keep them in your house. If you ask me, I'm not going to say where to keep them. I'm not going to say a safe deposit box is any better because you could have problems there, too. But I wouldn't keep them in my house. And if I did, I certainly wouldn't want anybody to know about it. Okay. So again, you might as well just buy shares in a mining company, I guess if you're going to do that, you know, or shares in a gold ETF if you're going to do that because you don't have physical metals. The misnomer here is what Peter says right at the beginning. It says investing in physical metals in your IRA is a simple process. No, it's not, because the metals are not in your possession. They're in a safe. All you're really getting in the final analysis, in my opinion, is fiat money. And again, I'm not going to go into that in depth. I've explained it on a prior show, my feelings about that, and that was just a few episodes ago. I really went on a rant about it. Last thing before we get to We've got a couple of different speakers on today's show. We're going to have two speakers. One, the first one that we'll have next is Randy Hughes, who's talking about land trust. And I'm really excited about this because he will be speaking in our upcoming Meet the Masters event. First time we've had him there. Again, I've heard a lot of kind of, in my opinion, marginal guys speaking on this topic. But I like Randy. I like his approach. I think he's conservative. I think he's for real and think you'll like what he has to say. So he's speaking at the upcoming Meet the Masters. We're going to hear a little bit from him here in a moment. And then we're going to hear from Doug about what he's talking about. And our guest today is Stuart diamond, who is a great author who's written some great stuff on negotiation and how to get ahead in life winning through a win win philosophy. So you'll like that. Last thing before we get to it. You know, I talk about this pooled money investing and how I like being direct investor. I say, pools are for fools. Thou shalt maintain control. Commandment number three in my 10 Commandments for successful Investing. You've heard me talk about it too many times. I was looking at one of these private placement memorandums and I was looking at the disclaimer and I just want.

To read it to you real quickly.

Because I tell me how you would feel. Now listen, we make it disclaimers too I get it. No one can predict the future. Nobody knows. Every investment has risk. I get it. I get it, folks. But just listen to this disclaimer and tell me how comfortable it makes you feel as an investor. This investment is not liquid. Involves tax and business risk and conflicts of interest. I love that one. Conflicts of interest. They're disclosing you to you right away that there are conflicts of interest. I'll go on. There is no public or other market for the transactions, nor is it likely that any such market will develop. A purchaser may be required to retain his interest in a transaction and bear the economic risk, the investment for an infinite period. Okay. The securities offered here hereby have not been registered or approved or disapproved by the United States securities and Exchange Commission or by the securities regulatory authority of any state, nor has any commission or authority passed upon or endorsed the merits or accuracy of this offering. The sponsor reserves the right to withdraw or modify this offering and to reject any investment in whole, in part. This offering does not constitute an offer to sell or the solicitation of an offer to buy any of the securities offered hereby in any state or to any person to whom it is unlawful to make such offer within such state. The investment in real property offered hereby is being offered pursuant to an exemption from registration under the securities act of 1933, as amended. Boy, that just shows you how slowly the law changes with the times. We're still talking about the securities act of 1933.

Amazing.

That's not really common on the disclaimer. It's more common on the legal system. Any reproduction or distribution of this offering in whole or in part, or the divulgence of any of its contents to any person other than a qualified investor as defined by the securities act of 1933. Strictly prohibited. Gosh, I hope I didn't break that rule by reading their disclaimer, folks. Be a direct investor. That's the bottom line. Invest in things you control. Stop falling for this stuff. Stop falling for this physical gold that you don't really have. The physical gold or silver. Stop getting into these pools. Pools are for fools. Be a direct investor. Control your financial future. Be your own best advisor. Invest in things that you know, that you learn about, you control. Where there isn't some fund manager who might be dishonest, who might be incompetent, or assume they're honest, assume they're competent, they take a big management fee off the top for managing the deal. Nuff said. Let's get on and let's hear from Randy here and then from Doug, and then we'll hear from Stuart diamond and we'll talk about negotiation and getting ahead with a win win philosophy. Look forward to seeing you at Meet the Masters just here in a couple of weeks. Register for that@j jasonartman.com and let's talk to Randy, then to Doug, then to Stuart.

What's great about the shows you'll find on jasonhartman.com is that if you want to learn how to finance your next big real estate deal, there's a show for that. If you want to learn more about food storage and the best way to keep those onions from smelling up everything else, there's a show for that. If you honestly want to know more about business ethics, there's a show for that. And if you just want to get away from it all and need to know something about world travel, there's even a show for that. Yep, there's a show for just about anything only from jasonhartman.com or type in Jason Hartman in the iTunes store.

You know, one of the really exciting speakers we have coming up is a new speaker for us at Meet the Masters, and that is Randy Hughes, who's an expert on land trust. And I tell you, I've read a lot about this over the years. I've heard different people speak about it. None of them have ever really resonated with me. I've never felt really good about how they presented and so forth until I talked to Randy and we talked for about an hour, did a whole interview about the topic. And I'm glad to say he will be speaking at the upcoming Meet the Masters event. Randy, how are you doing?

Good, Jason, thanks for inviting me. I'm really looking forward to coming and speaking to your organization. It's going to be really, really interesting because I teach land trust information to real estate investors all over the United States. And it's important to realize that land trusts can be used in almost every state in the country. Unlike what a lot of people say and some attorneys say, land trusts are legal in almost every state. So you can use them all over the country. And I would encourage you to do that.

There are some fantastic benefits to land trust, aren't there?

Well, there are. In fact, for everybody who attends this event, I'm going to provide them with A list of 50 reasons to use a land trust. There's just so much to cover that we certainly can't do it what we're talking here today. But I will give everybody 50 reasons to use a land Trust. And we will discuss many of the very important reasons at your event. But suffice it to say that land trusts are great privacy tools. And every real estate investor needs to learn how to use this to keep his name out of the county records and to keep people from tracking what they're doing. So it makes them very private in their business. And the other thing I teach how to do is to link these privacy tools up with asset protection tools like LLCs, corporations and other trusts.

And you know, Randy, I gotta say something when I talk to you for about an hour on this topic, what I love, loved is your very creative idea, deceptively simple, about how you name your trust. Because that in and of itself, and don't give it away now, you'll give it away at Meet the Masters. But that in and of itself is a huge asset protection tool right there. And it was brilliant what you said.

Well, it really is. And I really get into this stuff myself. I'm a full time real estate investor, Jason. That's how I make my living. And I have been for 40 years. I've been using these land trusts for over 30 years. So I really have a street smart sense of how to use them and how to teach real estate investors how to use them. Unlike some people that have some knowledge about land trust but don't really have the ability to apply that knowledge at a street level. And that's what I bring to the table and that's what your listeners will want to learn about at this event. And that's what I'm going to teach them at this event. And I will give them not only the information on 50 reasons to use a land trust, but I'm also going to give them, at no cost, a booklet called Land A Must Read Report. These are publications that I've written that really help clarify what land trusts are all about and benefits and how to use them. So really excited about being there, talking to your people and opening their eyes to something that they've probably never ever used before but they should be using in every real estate transaction.

And what I found in our interview and what I can't wait to hear you present on at the upcoming Meet the Masters event, Randy, is I found that this was extremely simple, it was extremely inexpensive and it's just something that behooves investors to do. So I am really looking forward to having you speak. There's a few, not a lot of people, but there's a few people out there talking about this stuff in our industry and all of them seemed Kind of hypey and, you know, like, they're making a lot of promises that you could tell they just weren't true. And I just thought you had a very realistic, very grounded, very legitimate approach to it. So I'm really looking forward to having you for our very first time at the upcoming Meet the Masters event. Any last thought you want to leave people with about this?

Well, I would.

I would like people to think along these lines. They are spending a lot of time and in some cases a lot of money to learn how to build real estate wealth and net worth for themselves and their families. I encourage them to spend a little bit of time to learn how to protect that wealth, because you don't want to end up at my age and have it all taken away from you because you didn't learn how to protect what you worked so hard to get.

And this is easy and simple and inexpensive as a way to do it.

Much less expensive than a lot of.

Stuff being promoted out there. So, Randy, we'll look forward to seeing you there. Thanks. Okay.

All right. Thanks a lot for inviting me, Jason.

Hey, I wanted to have Doug back on to talk to you a little bit about Meet the Masters and what he's going to discuss at that event. Doug, how are you doing?

Well, Jason, how about yourself?

Good. So you've got two speaking slots, as you usually do at the upcoming Meet the Masters event. What are you going to talk about this time?

So the first slot that I have is called Rethinking Wealth Building. And the whole idea behind this is that conventional wisdom for wealth building is actually making people very, very susceptible to a large collapse, or as I call it, a big sinkhole, which actually gets into the second one in my second segment, which is what I call the 401k sinkhole. And the thing that I really want to bring out or the thing that I want to emphasize for this Masters, because all the Masters are just really such a great opportunity for people to learn, because I think we really bring in perspectives that you don't see in the mainstream media. But anyway, the thing that I really want to bring out with both of my segments is how the rules are changing for people that want to build wealth so they can retire comfortably. Nobody's telling you about how the rules are changing because most people don't know about it. And that's not an accident. The simple fact of the matter, and we've talked about this a lot, but the simple fact of the matter is that the government has made a lot of promises. They can't keep and they don't have the money to keep those promises. And they're going to either need to confiscate a lot of people's wealth overtly through taxation, through nationalizing retirement plans, or by inflating the currency, or all three. And if you aren't aware of how those things are going to impact your financial assets and if you haven't prepared, you will be at great risk of peril in the later years of your life. So the real thing that we're doing is we're teaching people how to change the decisions they make so that the likely unfortunate events of the future don't decimate their finances.

And there are a lot of events.

Coming up that are very scary.

I mean, things are changing so quickly right now and people need to constantly be adapting themselves to the changes. When you look at a storm, the trees that get damaged are the trees that are inflexible, that do not bend with the wind. And you have to have some solid principles that would represent maybe the trunk of the tree. Those are your solid principles and your solid goals. But your plan of attack and your strategy to achieve those goals and maintain your principles has to be somewhat flexible in your way to look at it. And the rules are changing faster than ever in the world of retirement saving and wealth creation and asset protection. So very good points. What else?

One of the things that I really want to talk about, or one of the points that I like to consistently make, is that the traditional financial models for the last 40 years have all been based on compounded appreciation. I'm sure you've seen the chart that says if you invest $7, like $17 a month starting when you're 15 years old and you compound at 10% a year, you'll be a millionaire by the time you retire, or something like that. But what goes left unsaid in all of these models is that you're going to be able to consistently compound at a high rate of return. Well, anybody who's looked at the rates of return now, I think the dividend yield for The S&P 500 is like 2.1%. The 10 year bond.

After inflation, it's like minus 12%. And after inflation and taxes, because remember, you get taxed before inflation happens, it's probably about negative 14%.

Exactly, exactly. The yields available on investments have actually gotten to where they dip negative relative to inflation. And because in the old days, if you're nearing retirement, you'd put your money in bonds. Bonds are safer, they pay a guaranteed yield. But if you're only getting a yield that's 2%. And even. And even the inflation the government admits TO is like 3 or 4 and the real inflation is closer to 7 or 8. You're just going to be losing ground every year. The thing is that in the old model, what you could do is you could steadily invest and you could compound wealth. And then the idea was you'd eventually be rich. But you cannot compound your way to wealth using the same vehicles that worked in the 80s and 90s. The model has just flipped upside down. So you need to find a different way to compound. Otherwise, unless you start wealthy, you won't be able to build from, say, to build from modest means to a wealthy retirement unless you can find a way to compound faster than what we've all been told to do for the majority of our lives.

Well, all I can say is that the best way to become a millionaire.

In the stock market is to start with 2 million.

So good.

Well, hey, I'm looking forward to that. And we've got so many great speakers lined up for this upcoming Meet the Masters. I think we've got about 14 or 15 different speakers on a whole variety of topics. And those of you who are regular attendees that have attended the last 11 or 12 of them, you're just going to love it. And new attendees, be sure to register. Jasonhartman.com and you're just going to love it. It's going to be a great event.

Just one thing that I wanted to say in parting is if somebody's out there listening to this and they're kind of waffling on whether to come to Master's, it's really worth attending. And the reason why is because the things you're going to hear at Masters are very, what I call, non boilerplate. In other words, they're not something that you can just go to any other seminar and find. You know, they're not the kind of thing. They're not the kind of thing where if you do 30 seconds of Googling, you'll find exactly what you hear, hear, hear from Jason repeated somewhere else. I've heard other people say things that are similar to Jason and then the back end is always, is always followed up with some overpriced, you know, overpriced, underperforming coaching program. Overpriced, underperforming seminar. What Jason does is Jason brings in just phenomenal information, phenomenal investment products.

And the price, relatively speaking, is pretty reasonable. I've seen some of those Kiyosaki seminars that are just Ridiculous. And they don't even have deals for you. They just have a bunch of people that are coming in charging you ridiculous rates and then they huck their books the whole time.

And the person you're talking to, who's.

Your coach is a telemarketer.

Exactly.

Who has never done it. I've actually done it. I've made millions of dollars in real estate and I know how to do it. And we are the only one, Doug, that has the philosophy, strategy and product to all match together in a beautifully cohesive system we call the complete solution for real estate investors.

Absolutely. Absolutely. So, yeah, so the thing that I would just say is that if you're thinking about coming, I would highly encourage you to come by and see Meet the Masters. It is a different perspect perspective from much of what you're going to see. And.

You will more likely than not be much the wiser and wealthier for it.

Absolutely.

Well, thanks, Doug.

Appreciate that and I'll look forward to seeing you there.

Okay, see you there. Jason.

My pleasure to welcome Stuart diamond to the show. He is the author of Getting how to Negotiate to Achieve youe Goals in the Real World. I think you'll like this approach. It's taught at the Wharton School for the past 13 years and has achieved some very high honors. And Stuart, welcome.

How are you?

Thank you. How are you?

Good.

So you're coming to us today from Philadelphia, right?

I am.

Fantastic.

Well, tell us about the book. You're making a lot of inroads with this book. Number five on the New York Times.

Best seller list, number one on the.

Wall Street Journal and USA Today list. Congratulations on your success.

Thank you. The book has a new model of human interaction which says that perceptions and emotions are much more important getting agreements than the usual power and logic that valuing the pictures in the heads of the other party produces four times as much value as the usual way people do it, which includes threats, logic, my where the Highway Batman, Take it or leave it, walking out and even win Win or interest based negotiation. I've taught 30,000 people in 45 countries over 20 years. From country president to secretaries. I've collected millions of pages of documentation and I've seen clearly that the proposal in getting more works a lot better. In fact, Google has now accepted this model to train all 30,000 of its employees. The Wall Street Journal says this is the best book to read for your career this year. And it's done everything from help people do billion dollar deals to get their kids to willingly go to bed and Brush their teeth. So it's meant as an interactive. Every human interaction is affected by it.

Yeah. What you say makes a lot of sense from a logical perspective, pardon the pun, because it's often been said that people make decisions based on emotion and then later rationalize them with logic. You'd probably agree with that, right?

Right. Well, it's the human connection. Let me give you a simple example. I had a former student took an airplane up from Houston, Philadelphia, in a snowstorm last winter. When the plane landed four hours late and the as the rest of the passengers were snarling at the flight crew, this student, foreign student, noticed this, went up to the flight crew, apologized for anyone else's behavior, and said to them, you know, it must be a really real drag to work an extra four hours on a day like today. And when he got off the plane, they gave him $600. They gave him a completely free ticket only person on the plane to get that because he made a human connection with them. When you make a human connection with somebody, they're six times more likely to give you what you want. And so the right answer to the statement I hate you is tell me more. The right answer to the statement I like your competitors better is what do you like about them more and what do you don't like about me? It's a question impossible not to answer and gives you a real competitive advantage to find out the pictures in their heads. Whether you're in real estate or whether you are driving down the street in the store on any kind of a job, that finding the pictures in the heads of the other party and using that in negotiations creates more wealth and more value than virtually anything else people could do. Google tells me that the return on investment in the first 30 days is 5,000% from using these tools, which makes this the most profitable activity that Google does.

Well, Stuart, how can we discover those pictures in other people's heads so that we can appeal to them?

Well, first of all, you can ask them. You can do Internet research or you can guess. You guess right, they'll be happy. Guess wrong, they'll tell you what's right. But I'm in there trying to find out. I wish I knew you better. I'd like to know you better so I can find out how to meet your needs. You ask me if my proposal. I have no idea what my proposal is. I don't know what your needs are, so I can guess. But wouldn't you rather tell me directly what your needs are? And so that's sort of how I teach people to negotiate better in any situation. I have a nine year old son, Alexander. I don't threaten him. I don't say if you don't clean your room today, you can't have Legos. I say, alexander, there's nothing better that I want to do for you today than buy you Legos. Help me buy you Legos. In fact, I buy Legos for boys with clean rooms. Are you such a boy? He likes that a lot better. I do things for clients who treat me civilly. Are you such a client? I frequent stores who pay attention to my needs and return merchandise easily. That seems to be defective. Are you such a store? It's a way that you give people the decision in which you value them, but you also quote certain kinds of standards of behavior. Another way that you add tremendous wealth is that you find out things that are different between the parties and you trade them. And it's not just in the deal, it's everybody's billions synapses. CEO of a major company in Philadelphia once told me the most important thing he ever did for his major client in a 20 year business relationship was to pick up the client CEO, his mother in law. Philadelphia airport one Saturday night. Has nothing to do with any deal, but it affects every deal. Guy I know from Silicon Valley had a melt and mock client, couldn't get the account, found out that the client's teenage daughter was having computer problems, invested half a day, went over to the guy's house, toured the daughter, fixed the computer, got the deal. And so the more you know about the other side, tangible, intangible in the deal, outside the deal, the more connections you can make. And one of the big problems is that people don't know enough about the other side.

That is really truly a way to think differently. That's the first chapter in your book, Thinking Differently. And I mean, I was really amazed at that story you told about the airplane. No passenger has probably ever approached a flight crew that way. That's got to be so refreshing for them. It's just amazing.

Yes. A woman brought back a plane by realizing that it didn't matter that the incoming plane was late and that the gate agent said no. She realized the decision making was the pilot. And so she went over to the window, caught the pilot's eye and looked plaintive, dropped her bags to the floor, held her boyfriend's hand, pilot brought back the plane, she went on to Paris for the lifetime vacation with her boyfriend. The stuff is invisible unless you see it, unless you see it for the first time. This process I used, by the way, to solve the writers strike in Hollywood, which is close to, I guess, where a lot of listeners are in California. What happened was about three years ago, I got a call from Ari Emanuel, who's probably the most prominent agent in Hollywood. He's the role model for the TV show Entourage and the brother of Rahm, who was White House chief of staff, now mayor of Chicago. Writers had been on strike for three months. No new material on tv, no contract for a year. And they wanted some advice from me on another interminable meeting they were going to have with the studio heads. What substantive issues, royalty rates, et cetera. I said, forget that stuff. Go to the meeting and ask the studio heads three questions. Question number one, you guys happen. We're not happy. Question number two, you're making any money? We're not making any money. Question number three, if you had to do it over again, how would you do it? Took 30 minutes to restart the negotiation. Took two days to get an agreement, because they made a human connection with these guys. And that is really key. I can say two things about this. One, it's not rocket science, and two, unless you order how to do it, it's invisible. You don't see it unless you already know it. But. But all across the way, somebody squawks at you. There's a service provider. Maybe it's not you. Maybe the man's the last customer. And if you say to them, what's eating you today? What's wrong? They might complain about the last customer. And then when you say you'd like a car upgrade? They say, how about three? Because they appreciate that you took them at face value and gave them the benefit of the doubt. And that's a really key. And in fact, it's the people that are more than half the reason why people come to agreements. The facts and the evidence are less than 10%.

Very interesting. Is that what you mean by the problem solving model, or is that more complex?

A problem solving model is a bit more complex because it looks at what's my goal? Am I meeting my goals? What problem do I have that's preventing me from meeting my goals? And the third thing is, then, who are these people? Because each situation is different. So what problem do I have now and what's my goal? And given those two, I actually have to negotiate with a set of people who might even feel differently today than they felt yesterday. And I have to deal with their issues and emotions right now. Which brings me to the point of emotion, which is part of the problem solving model. Emotions destroy negotiations because they distract people from their goals and what you want to do. When people get emotional, they stop listening. And that is whether it's world peace, a billion dollar Joe and my kid wants an ice cream. And so the first thing you've got to do in a negotiation is not talk about your evidence, is even not develop a process. You need to find out what their emotional temperature is. And if they're angry and upset, they care nothing about win win. They want you to make them feel better for something they're angry about. I apologize. I understand. Some kind of empathy. That's what people mostly need. They want to be valued by other people, whether you're Democrats or Republicans in Congress or the clerk in the store. And if you value people, they will pay you for it.

You know, I think back to Ronald Reagan and you know, he seemed to be very good when you mentioned the Democrats and Republicans, he seemed to be very good at crossing the aisle and having friends on both sides, not just Republicans. Whereas his predecessor, Jimmy Carter took a lot of flack for just not having any ability to get people to get behind bills or get any consensus going or any sort of really leadership. I mean, that's what you call it, leadership.

You're so right. People liked Reagan as an individual. He treated people as individuals. He was self deprecating. And as a result of that, he got tremendous support. And I must also say, people, George Bush is a very controversial person, but he was pretty likable. And so he got elected twice, I think the first time because he was likable and the second time because he said in his nomination acceptance speech, you might not agree with where I stand. At least you know where I stand. People do not necessarily expect you to agree with them. They do expect you to be straight with them. And that's a really big idea. And at the same point, I think Barack Obama beat John McCain in the second presidential debate. Every time it looked like McCain was going to slug Obama, Obama just smiled, graciously, offered his hand, which McCain didn't take. People expect you to be a decent human being, no matter what they say in public to each other. And that's a real key. And in fact, one more thing I want to tell you listeners which is absolutely essential is there's a study done some years ago in France that found so much mistrust that gross national product was 5% lower and unemployment was 8% higher. And our numbers today, our reactors today, this conflictive society we have after 911 is similar to France a few years ago. And if you want to look for why we have unemployment that's at 9%, look no farther than the way we treat each other. And you can measure it, you can count it, and that's why the US Is number five in competitive, just not number one.

Well, tell me what you mean by that.

Can you be more specific, like on the unemployment.

First of all, the unemployment thing, we talk a lot about that on the show and, and how the statistics are not quite accurate. But we say unemployment is. Is in the 20s, actually, when you count the discouragement.

Whatever. Whatever the number is. But what do you mean by that? I mean, how is it that unemployment.

I mean, there's less trust, there's more conflict. If you look at everything from Charlie Sheen to the NFL to the NBA to Congress to the way the media portrays people, both on television, radio and the newspapers, you see that people are conflicted with each other to try to solve crises. Now, when you conflict with somebody, they don't give you their best stuff. And their best stuff means you take your ideas and my ideas and you take the best of it and you make a new synthesis from better ideas. If you look, for example, at congressional debt crisis, that doesn't happen. People demonize each other, and that costs money. And so it's very important. And let me give you a really good, simple example of things that don't happen. Former student wrote me from San Francisco. He said, I was just about to. I was standing on the street corner about across the street, and an old man with a cane trying to cross the street. And a guy with a Mercedes convertible and a blond in the. He wheeled around and nearly hit this guy. And the old man, as the Mercedes was going by, smacked his door with the rubber tip of the cane. This guy screeches to a halt, gets out, is about to strangle this old man. And this former student gets in the middle of them and says, stop for a minute. Are you hurt? He says to the old man, no. Is your car damaged? He says to the driver, looks at the door, no. What's your goal here?

The guy from driver got back in the car, drove away, and the old man continued across the street. We don't do enough of that. There are simpler ways to solve our problems that do not depend upon fighting with each other. And that's what I tried to do in getting more is to provide the anecdotes of 400 people, from CEOs to school children to individuals, housewives, lawyers, et cetera, who did this differently and who Got a lot more.

Okay, so let me, let me play devil's advocate with you for a moment on that. So certainly what you say makes complete sense. I mean, fights are the old saying that I always use is nobody ever wins a fight. And then I remember when, when Dennis Whiteley, years ago, I was listening to one of his things, and he said, you know, there is no such thing as winning an argument. There is only winning an agreement. And I thought that was very sage. But is there a time when you have to fight? Are there appropriate times in life where you have to fight? Or is it always just be the peacemaker?

I guess the point that I make is the name of my book is getting More Not Getting Everything, which is to say there are plenty.

Good answer, by the way.

There are.

Plenty of times to fight. Everybody knows what they are. Point is, it's the last choice, not the first choice. And so there's a lot of things you can do if you take a step back, take a deep breath, and say, really, is this the best way to do it? And that's a key. And also, maybe I'm not the right negotiator. Maybe this can be settled if somebody else negotiates for me, somebody who's not as emotional, for example. And so there's a whole series of questions I have that I want to ask you about. What are their standards? Have they ever made an Exception to a $200 change fee? What have they promised in terms of customer service? Instead of arguing with them, I can say, are you keeping your promise to me? It's a much more powerful question. People hate to contradict themselves. And if you give them that choice, they'll usually comply. Martin Luther King and Mahatma Gandhi did that with very hard bargainers. Mahatma Gandhi took the India, the jewel in the crown, from the British Empire without ever raising his voice or a weapon. He just simply said, is the way you're treating our people acceptable? Martin Luther King said, this is the US Constitution doesn't say that everybody has equal rights. We're confused about this. Even the most hard bargainers could not stand up to those questions. So there's a lot more you can do before you get to the point of violence. And if you don't mind, I'd like to bring up a current newsy political event now just to show you the problem. Everybody's congratulating themselves. At least the governments are for Libya and Gaddafi's demise. I don't get that at all. Six months ago, the guy said he'd negotiate. He was turned down. Instead of that, we caused a war that caused 50,000 people to die in Libya, including innocent women and children. And we spent $10 billion. Now 30 years ago was a model. When the butcher of Uganda, IDI Amin did the same thing, Saudi Arabia offered him a few million dollars and a villa in Saudi Arabia and he left. So I don't know why our leaders don't check the Internet for models. So he it actually wasn't necessary. I'm sure Libby would rather have had the $10 billion to spend on health care, education and housing. And so this is what I mean, picking the hardest way to do it as opposed to the easier and better way to do it. So that's what and also taking two biggest steps. Universal health care is a really big idea in this country and we are never going to get it anytime soon with all the constituencies fighting over each other. What the goal should be is more people insured next year than this year, more people insured the year after next year than next year. In other words, taking steps that are smaller, that get more people to get behind, to get a sense of accomplishment and then moving on from there. That's the way to solve problems from abortion to health care. To know bullying the schools.

Let me take a brief pause.

We'll be back in just a minute.

You know, Penny, sometimes I think of Jason Hartman as a walking encyclopedia on the subject of creating wealth.

Well, you're probably not far off from the truth, Rich. Jason actually has a six book set on creating wealth that comes with over 100 hours of the most comprehensive ideas on investing in business.

Business.

They're in high quality digital download audio format, ready for your car, ipod or wherever you want to learn.

Yes. And by the way, he's recently added another book to the series that shows you investing the way it should be. This is a world where anything less than a 26% annual return is disappointing.

Jason actually shows us how we can be excited about these scary times and exploit the incredible opportunities this present economy has afforded.

We can pick local markets that are untouched by the economic downturn, exploit packaged commodities investing and achieve exceptional returns safely and securely.

I like how he teaches us how to protect the equity in your home before it disappears and how to outsource your debt obligations to the government.

He's recorded interviews with Harry Dent, Peter Schiff, Robert Kiyosaki, Pat Buchanan, Katharine Austin Fitz, Dr. Dennis Wait, T. Harv Eker, and so many others who are experts on the economy, on real estate and.

On creating wealth and the entire set of advanced Strategies for wealth creation is being offered with a savings of $385.

Now, to get your Creating Wealth Encyclopedia series, complete with over 100 hours of audio and 6 books. Go to jasonhartman.com store if you want.

To be able to sit back and collect checks every month, just like a banker. Jason's Creating Wealth Encyclopedia series is for you.

Just backing up a moment. Gaddafi in Libya. You have a chapter in your book about cultural differences. And we live in such a globalized society nowadays. Most people live in areas where you've got mixed cultures and mixed ethnicities and so forth. And you know, they really, there are significant cultural differences. How can we negotiate better with different cultures?

That's another really good point. And getting more. I've got various studies that will surprise people. One says that in companies with work groups where there are significant perceptual differences, three times as many marketable ideas are created than consensus groups because difference is remote. Creativity even more canalizing. For each 10% in diversity added to a US city, net income for everyone there increases by 15%, which is a vast amount of money. No magic that Silicon Valley is located outside of San Francisco. It's the most diverse city in the United States. So if we say. If you say with some frustration, we're different from each other, I say we're going to make money list to see what more. Because from our different ideas come a better synthesis. And people that fight each other over differences are reducing profit. And so that's a really key idea that people don't understand. You want people to be different and you want to learn stuff from them because their different perceptions add value.

Oh, well, yeah, sure. But what I'm talking about is most people listening have heard about how you should negotiate differently. For example, with Japanese, I mean, they have a very, very different style.

I disagree.

Okay, go ahead.

I disagree totally. First of all, there's 130 million Japanese. You know, they negotiate all kinds of different ways. Some like New Yorkers and some like, you know, the stereotype of Japanese. I need to know the pictures of the person's head at the moment of the negotiation. And you can't tell by externalities. And so the first thing I want to be is I want to meet and I want to, I want to tell people that I'm me. Because if I try to be somebody I'm not, I'm not going to be credible. So I want to say, you know, if I insult you in the next couple of days, I apologize in advance. Could you please advise me? That's real people understand that, and they become more collaborative. You act like you want to act, I'll act like I want to act, and we'll talk about our differences. That's much better than trying to do a little dance.

All I'm saying is that you don't.

Know very well is that like that culture specifically is one that really, really values, I mean, all of your material values this, from what you've told me, it values respect. But especially in that culture, I mean, that is so highly valued.

It's possible for me to respect people and so do myself. I would like to respect not only you, but everybody I talk to. Here's who I am, and so you will always know who I am. And if you don't think you're being respected, let me know. I'll do the best I can. That's much more respectful real than trying to put on an ad.

That's a great statement. No question. You know, there's an old saying, and I'm just wondering what you think of this when you're entering into a negotiation and say it's over price or fee pay, whatever it is, it's over money. And so when you're entering into a negotiation, there are two schools of thoughts on this. The old school would say the first person to mention a number loses. And it seems like the more contemporary school, if I'm reading this correctly, says mention the number first, and then everything builds around negotiating within that context or closer to your number. Do you have any thoughts on that?

Yes. I don't agree with either of them. I agree with mentioning that I believe that both parties should mention the number last after they know what's in the deal. Money is usually not the only thing in the deal. We want to find out, well, what's this thing worth? How have we decided what it's worth? Is there any other terms you're in the deal? When are you moving in or out of the house? Can you give me a certain time telling me how to get around the neighborhood? What other things should I know?

Would you leave the curtains? There's all kinds of things that I want to discuss before I get to a number. And it is true that if you mention a number first and there's a bargaining range that's wide, you will get hurt. And if you mention a number first and the bargaining range is narrow, you can anchor the other party. But there's so much more in most deals that you shouldn't get get hoodwinked by thinking it's just a number that matters. It's not. People buy things from others they trust. People have all kinds of other. For example, if I buy a car from a dealership, I will pay one price if they just give me a car, I'll pay another price if they give me a free rental during all the time I bring in for servicing, and they'll give me another price if I refer somebody to them. So there are lots of different terms and agreements that people can put in those agreements if they find out, but they talk to the other side. So it's not as simple as anchoring or getting hurt by naming the first agreement, the first number. It depends on what else is in the deal.

Talk to us if you would, a.

Little bit about travel. Do you mean getting upgrades and things like that?

Yeah, I tend to make connections with people. I tend to. They have a lot of discretion in travel, and I want to see who the person is that I'm dealing with. I want to understand what their day is like. I don't want to demand things. I want to make it easier for them. And so many people who handle travel situations are beat upon. You get a competitive advantage by being nice to them. I've had students that have gotten the first seat on a delayed plane that they were trying to consolidate with the plane that was canceled because they were nice to the person or have gotten upgrade to Carpus. I had a couple of students of mine who went to a hotel in Barbados that had a loud band. First one went down and threatened. You have. I can't sleep. You know, your hotel shouldn't be doing this. I want a refund. And the desk told me to get lost. Second person, a woman, went down and said, you know, it must be a real drag to listen to this kind of music every night. Would you like me to call the authorities for you, or is there something we can work out? And thank you for our suite on the other side of the hotel. And that's two people, same sex, one got treated much better than the other because they made themselves a person and didn't berate people, didn't complain, et cetera. So attitude means a lot in terms of what you get. And most people forget that when they get upset, and then they just make things worse.

Sure they do.

Yeah.

Very, very true. You know, a lot of people listening may be involved already in some sort of heavy negotiations that's been progressing or a conflict.

And it sounds a lot like you're.

Really not just an expert at negotiation, but at conflict resolution. And I guess there's a slightly different Flavor there. What can someone do if the tone of an interaction has already been set? Any tips on changing and reframing the negotiation or the debate?

One of the things I say in getting more is you can't change yesterday today, but you should say, what's going on? You're very transparent about this. I would say, you know, we haven't got along so well in this negotiation so far. You want to try to do better both of us. And if they say this is all your fault, I would say I accept any fault that's mine. But the question is, did you want to try to do better or not? We can fight over yesterday forever. We can try to do better ourselves. Or as I've often said to companies, would you like to give our retained earnings to the sales department or legal department?

That's a great question.

What should we be doing with our future here? The future is what we can control. Want to fight over the past? Go to court, have a war. But what do we do now? Is the question. Yesterday is a sunk cost. So that's how I encourage people to think. What do we do right now? People want a concession before they move on. My answer is, if we have a relationship. Relationship, I'll give you something for yesterday. If we don't, I won't. So first we have to see whether we have a future together, and then I'll talk about yesterday. But to talk about yesterday before we have a deal is a waste of time. So most people put the cart before the horse first. You find out whether you're going to get along, and then you see what you can do with each other.

Very good point. Very good point. So that's kind of like one of the subheads in your book. What can we do now? What can we do for the medium term? What can we do for the long term?

That's right. That's sort of how I want to look at it. What can we do right now to add value? Which means we don't want. And you also need to understand, to do this, other people's perceptions. Because what you think you said is not necessarily what they think. They heard a mother's argue with a teenage daughter about her going out at night. The daughter thinks I have no freedom. The mother thinks the daughter is going to get killed. Killed, no. Or hurt unless the two of them discuss their respective perceptions. That evening in that relationship was going nowhere. So you really have to question every time you have an argument with somebody, are they hearing what I think I said? And often they're not. Because they're upset. And people don't hear very well when they get upset for the ordinary family arguments and for arguments in Congress and everything in between.

So how do you make them hear you better? Then?

You give them an emotional payment. You say to them, first, I want to hear what you're thinking and feeling. Let me know, let me have it. And you ask them questions, et cetera. And then you incrementally say, well, I'd like to talk to you about some of this stuff. A couple things you said may have a misimpression of me. I want to correct the easy stuff first. Here's what I'm really thinking. Then I'd like to talk to you about the things where we're different from one another and how we can form an agreement on that. But that makes the parties much, much more easily be interested in an agreement than the emotional complaining and shouting that usually goes on in conflict.

Very, very good material. Stuart, this is excellent. Can you tell us maybe as a way to sort of encapsulate this before we and then we'll conclude with some other things. Talk to us, if you would, about some of the different philosophies of negotiation and where you stand on those. I mean, certainly there have been a zillion teachers on the topic, a zillion books written on the topic, and a zillion seminars on the topic.

Great. The first thing is many people think you need to use power and leverage over other people to make them do what you want to do. The alternatives are worse for them, et cetera. They may do it, but it causes resentment and retaliation. Maybe not today, but later. And they will come back at you for it, and that's going to cost you in the future. The next thing is when you force people to do things, they don't give you your best stuff, they don't give you your best ideas, they don't give you your best cooperation, whether you're at work, believe at five, and whether you're a kid, you know, you might be not give your parents all the things they want or you retaliate in some way. And so it's not very good. That means best alternative to a negotiate agreement. Batna it really, you know, is an implicit threat. And I don't want to do that. I don't want to say I can go somewhere else. I mean, I'll have that in my mind. But if I say it to you, you're going to get angry and so you're not going to do what I want you to do. Rather I want to find out what are your needs, what are your goals, how can I meet them? So that's the first thing people do wrong in negotiations. The next thing they do wrong is they try to make it logical. Win, win. But most people, as I mentioned, are upset. Whether it's, as I said, world peace, a billion dollar deal, or kids kicking and screaming on the floor. And if people are upset, they don't want to know. But about win, win. They don't want to see your stretches. They want to know, how do you make me feel better? How do you value what I'm saying? So what I want to do, instead of doing rationality, be rational, become as I want to find out what's eating you, whatever it is. And people often say to me, but they're crazy. And I say to them back, did you want crazy people that are unpersuadable or crazy people who are persuadable? And so if you value them, you get crazy people who are persuadable. That's better for me in the world of I live in. And so that's. The second thing is giving people emotional payments and not assuming the world is logical. The third thing is to be incremental, is to try things a little bit at a time. You won't clean your room. Would you clean a quarter of your room? You won't. Can't give me $1,000 raise. Can you give me a hundred dollar raise? And I try step by step to bring people where they are now to where I want them to go. The next thing is I got to know what the pictures in their heads are. I have to ask them, I have to guess. Because if I don't know the pictures in their heads, I have nowhere to start and I can't possibly value them. And finally, this is transparent. If somebody says, are you giving me an emotional payment? I'll say, you're darn straight I am. What's wrong with that? This is a transparent process, not a manipulative process. People respond much better to others who value them and say, what's going on? I've got a little model that sits on the back of a business card on my website and in my book. And it gives you like 20 questions to ask in negotiations. And I tend to share this with the people I'm negotiating with because it gets everybody on the same page in a process way of focusing on their goals, on needs, on getting to know each other.

Fantastic points. Very good. Tell people where they can get the book and any other information. The book is called Getting more.

They can get it at Amazon. They can get it in bookstores. They can get it at CEO Reed or Barnes and Noble. In addition to that, our website is www.gettingmoreoneword.com and they can also look on that. And that will also give you the link to the places you can buy the book. The book is sold very well here and abroad. It's a new idea, but it's number one in Taiwan. It's the number one business book in Britain. And as you mentioned, it's been a best seller here. So what I'm really trying to do is get people to think about a different way of dealing with things so more situations wind up. Like the guy with the cane and the Mercedes.

Yeah.

That could have escalated into something really ugly. And it was solved very well. Four and a half stars on Amazon. So keep up the good work, Stuart, and thank you for joining us today. These are some fantastic tips and I'm sure they're helpful to everybody listening.

Thank you very much.

This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com or email mediaartmanmedia.com Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own and the host is acting on behalf of Platinum Properties Investor Network, Inc. Exclusively.