Posts

I wanted to take a few moments to really explain some of the processes that I use to make Investors successful.

First, I answer my phone.  How important is that?

When a person first connects with me, we have an automated procedure that I use.  I place the person on an MLS search for 2 or more units. This allows them to start becoming familiar with the market.  It is only sent out twice a week and is an opt in program. If you have not opted in, you are missing information. If you need me to send this to you again, let me know.  If you want to be added, let me know.

I use Salesforce as a CRM.  Once the person is in Salesforce, they will get an email from me to explain my background. 

Also, if the person is on LinkedIn not only will they receive an invitation from me to connect but also an invitation to the closed investment group that is updated with market stories in real time once or twice a week.  Another great way to understand the Phoenix Market.

Additibally, remember that I am a member of the Tucson MLS and can (by request only) add you to the Tucson MLS as well.

I keep a massive spreadsheet containing all leads and current clients. This is tracked as to when I have spoken to you and your comments.  It also tracks when and how often the MLS searches are opened. Two of my referral partners Tom and JC) help me with getting these people qualified for a loan.  If the person is just looking that’s great. What about if they are interested in more than 4 units? No problem, but then I can help find the right commercial lender for the task at hand.  

When I find a deal that I think is worth getting serious about, I send out a constant contact.  I do not play favorites, the first Investor that calls me and wants it-gets it!.

When we go to Escrow or Contract, I have an online portal system that we store all executed documents and due diligence and you will be invited to this as well.

 

Did I mention the website?  I know that you are on this now but have you registered for the back side-more information.  I have spent over $30,000 on this website. You can access it easily from your phone as well.  

How about my book on Amazon?  Just google my name and it comes up!

How about the 10 hours of education on the site?  I paid almost $25,000 to make this a GOOD educational program for the investor.

Don’t forget the classroom workshop on May 2nd.

Below is a bit about the market last week.

According to the Information Market, residential sales in Maricopa County were up 14.8% in January 2020 when compared to January 2019.  That’s 7,922 units vs. 6,898 units. Resales accounted for 6,768 of the sales in January of 2020 compared to 5,954 in January of 2019. Median resale prices were up 10.1% over that period to $285,000.  New build sales rose to 1,154 vs. 944. New median sales prices rose 6.7% to $365,706.

Feel free to call me, I answer my phone and return calls as soon as possible!  602-688-9279!

Hope your day is amazing!

Linda

The first quarter of 2020 zooming byand  I am going to share my research and thoughts on the market for the Phoenix area and in particular MultiFamily.

First and foremost one of the questions that I am continually being asked is how long until we see a correction in the Phoenix Market.  Let me be clear-I do not have a crystal ball and will not set specific times or dates. 

Here is what is happening now.  There are over 250 major companies relocating to the Phoenix Market and this means jobs and building growth.  One of the reasons that we see this is really two fold. One, California is almost impossible to build in and the laws that DISCOURAGE growth are rapant. My phone is ringing constantly with California Investors.  I am meeting with several Californians that have given up and moved here. Many are liquidating their assets on the coast and moving their investments here. The second reason is that our State has a VERY friendly legislature for growth and are incentivized to make this happen. What is really interesting is that I am receiving quite a bit of interest from the East Coast as well.

Remember that our cost of living is low as well.

 

So the next question is what about jobs, tenants and places to live? 

In reference to jobs, our unemployment rate is below that National average and our workforce is robust. Tenants are interesting right for two reasons.  The first is that the amount of rents are keeping up with the wages and rents are on the increase there is no doubt. We had a multi unit property that the tenants needed the rents raised.  The Property Manager raised the rents $200 across the board and not one tenant left! One of my clients in Tucson wanted to rent a small apartment here so he could manage the rehab on one of his properties.  He could not find an apartment or at least one that he felt was affordable for his needs. The second part of the Tenant situation is that the younger tenants (millennials) do not want home ownership, they do not seem to want the responsibility of maintaining their own property.

Places to live are really interesting and probably the main reason that we see NO vacancies to speak of.  

About 10 years ago, Elliot Pollock who is probably the foremost economist on the PHoenix market projected that in 2020 we would need 525,000 more dwellings and that 35% of this would be new multifamily.  I went to a conference two weeks ago on the economy that he was one of the featured speakers. Not only have we not met these numbers but now he believes that we need more units and that he projects that our growth will remain strong for at least another 4 years.

Here is a link for some breaking news that happened yesterday check it out Historically low inventory continues driving home prices higher 

I want to quote and give you directly from the horse’s mouth Elliott Pollack’s last Monday projections. I respect him a great deal and you should go to his website and sign up for his weekly updates.  See below.

Also, remember that I am on the ground and digging deals out.  Call me I want to speak with you and help you understand the market and what is going on.  

 

ELLIOTT D. POLLACK & Company

FOR IMMEDIATE RELEASE

January 27, 2020 

The Monday Morning Quarterback 

A quick analysis of important economic data released over the last week

It was a slow week for national economic news. Leading indicators were essentially flat. Monthly existing home sales increased substantially from a year ago in December but were up only modestly for the year (2019 over 2018). And the supply/demand imbalance in the country caused resale prices to increase at four times the overall rate of inflation and more rapidly than wage gains for the December over December measure but were up more modestly for the year as a whole. This is because when interest rates declined during the year it allowed more of the pent up demand for housing to manifest itself. Other than that, it was political. The impeachment trial got underway in the Senate. And according to the Washington Examiner, the death of Mr. Peanut, the Planters Peanut symbol for the last 104 years, overshadowed the first day of impeachment arguments on Twitter. Is the public telling us something? 

On the local level, the latest Arizona, Greater Phoenix, and Greater Tucson employment data shows that the state and its major metro areas are continuing to do well economically. Arizona remained the third most rapidly growing state in 2019 and Greater Phoenix was the third most rapidly growing major employment market in the country in 2019. Thus, the state and Greater Phoenix are going into 2020 with a full head of steam. The same can be said for the single family, apartment, office and industrial real estate markets in Greater Phoenix.

U.S. Snapshot:

  • The Index of Leading Indicators fell modestly in December to 111.2.  This is a 0.3% drop from November’s 111.5 and a 0.1% increase over December 2018 (see chart below).  It is worth noting that leading indicators have modestly declined in four of the last five months. The manufacturing indicators are pointing to continued weakness in the sector.  However, financial conditions and consumers’ outlook for the economy remain positive.
  • Existing home sales grew by 3.6% in December when compared to November. They were up 10.8% over December 2018. For 2019 as a whole new home sales were flat for the year and single family sales were up a modest 0.5%. This indicates a significant rebound in housing the second half of 2019. The declines in mortgage rates helped free up some of the huge pent up demand for housing. The lower mortgage rates help offset the effect of higher prices on affordability as home prices increased by 7.8% December over December and 4.8% when comparing 2019 to 2018.

Arizona Snapshot:

  • Employment figures for both December and full year 2019 came out this week. The numbers show continued solid growth in the state as a whole, Greater Phoenix, and Greater Tucson.
     
  • For the state as a whole, December employment was up 2.9% from December 2018 or 84,400 jobs.   And for the year as a whole, employment in the state was up 2.6%. While this is somewhat slower than the 2.8% growth in 2018 over 2017, it is still strong. And while the rate of growth in employment has modestly slowed in the second half of the year, the state is entering 2020 on solid footing. Arizona remains the third most rapidly growing state (percentage terms) in the U.S. behind Utah and Nevada.
  • For the year as a whole, employment was up 74,800 jobs. The sectors with the biggest gains in absolute terms were Educational and Health Services with 19,300 jobs, Construction with 16,000 jobs, Trade, Transportation and Utilities with 10,500 jobs and Professional and Business Services with 10,000 jobs.
  • In percentage terms, the employment sector leaders were Construction with 10.1% growth, Manufacturing at 4.4% growth, Educational and Health Services at 4.3% and Natural Resources and Mining at 4.3%.
  • Greater Phoenix employment growth was up 3.2% from December 2018 to December 2019. That’s 68,800 jobs or more than 81.5% of all the jobs created in the state over that period of time. When comparing 2019 with 2018, growth was 2.9% or 61,800 jobs. That’s 82.6% of all the jobs in the state. The 2.9% for 2019 compares to 3.3% in 2018 and 3.0% in 2017. The 2019 number is likely to be revised upward when revisions are released in March. The present numbers paint a bright picture for Greater Phoenix. It is now the third most rapidly growing major market in terms of percentage employment in the country. Only Dallas at just under 3.1% and Orlando at just under 3.6% grew more rapidly in 2019.
  • Greater Tucson grew by 8,800 jobs or 2.3% on a December over December basis.  On a year over year basis, Tucson was up 1.9% or 7,300 jobs. This was the best year for Tucson since 2006.
  • According to CBRE, the Greater Phoenix industrial market continues to do well.  In the 4th quarter of the year, 2.6 million square feet of industrial space was absorbed while 3.3 million square feet was brought on stream.  Thus, vacancy rates increase modestly from 6.1% in the 3rd quarter to 6.3% in the 4th quarter. This is still very low by historical standards.  For 2019 as a whole, 10.7 million square feet was absorbed while 9.1 million square feet was delivered. Vacancy rates for the year as a whole declined from 6.5% to 6.3%.  Rental rates were up almost 8%.
  • According to CBRE, the Greater Phoenix office market also did well in 2019.  In the 4th quarter, absorption of office space was 830,401 square feet while change in inventory was 558,731 square feet.  Thus, vacancy rates dropped from 14.4% in the 3rd quarter to 14.1% in the 4th quarter. For 2019 as a whole, 3.2 million square feet was absorbed 2.8 million square feet was delivered.

 

About EDPCo

Elliott D. Pollack & Company (EDPCo) offers a broad range of economic and real estate consulting services backed by one of the most comprehensive databases found in the nation. This information makes it possible for the firm to conduct economic forecasting, develop economic impact studies and prepare demographic analyses and forecasts. Econometric modeling and economic development analysis and planning are also part of our capabilities. EDPCo staff includes professionals with backgrounds in economics, urban planning, financial analysis, real estate development and government. These professionals serve a broad client base of both public and private sector entities that range from school districts and utility companies to law firms and real estate developers.  

 

I want t post an article from my referral partner Rick Wittstock of IPX 1031.  Rick has been a valued REferral Partner of mu firm.

Since so many Investors are looking towards 1031 Tax Deferred Exchagnes this article cam out at the right time.  Please go to our Referral Partner Page to contact or learn more about Rick!

 

2019 was another record year for 1031 Exchanges. What’s in store for 2020?

Commercial real estate is predicted to have a very good 2020, supported by resilient economic activity, low interest rates and the attractiveness of real estate investment.

With an election year, government leaders will push to keep economic activity strong. A recession or major economic disruption is unlikely. However tax reform continues to be an issue that could drive transactional activity. Republicans want technical corrections. Many of the Democratic Presidential candidates are promoting substantive changes. Elimination of FIRPTA to encourage foreign investment is a bipartisan issue that could spur real estate transactions. Also, proposals such as mark to market, a wealth tax, increases in the tax rates, and increase or complete elimination of capital gains all could impact investor behavior. An increase in ordinary income tax or capital gains tax rates would make like-kind exchanges more valuable to taxpayers, but could also make 1031 a larger potential target for tax revenue seekers.

With expected growth in investment and commercial real estate transactions, we are expecting another strong year for 1031 tax deferred exchange transactional activity.

image

A 1031 Exchange transaction requires planning, expertise and support. Here’s a checklist outlining key steps in your exchange.

  1. Choose your 1031 Qualified Intermediary (QI)
  2. Consult with your tax professionals
  3. Include Cooperation Clause language in your purchase and sale agreement
  4. QI prepares your exchange documents
  5. Start searching for Replacement Property
  6. Sign all documents QI prepares
  7. Sell your Relinquished Property
  8. Identify your Replacement Property
  9. Enter into contract on Replacement Property
  10. Contact QI once Replacement Property escrow is opened
  11. Close on Replacement Property
  12. QI transfers funds to complete your purchase
  13. Your exchange is complete
image

2017 tax reform indexed the Long-Term Capital Gain rate breakpoints (whether a 15% or 20% rate) to inflation. The actual rates didn’t change for 2020, but the income brackets did adjust slightly. The breakpoints for 2020 are as follows: married filing jointly – $496,601+ and single filers – $441,451+. The capital gains brackets are based on “Taxable Income” whereas the Net Investment Income Tax thresholds are based on “Adjusted Gross Income”. For more information

image

If your transaction closed at the end of 2019 and you are unable to find new property to identify or purchase the property that you have identified, you may still be able to defer paying taxes on your capital gains until 2021. Since you will receive your 1031 funds back in 2020, in certain circumstances, since you did not have control/possession of your funds until 2020, the IRS may allow you to pay taxes on your 2020 tax return, which are due in 2021. This is in accordance with IRC Section 453(d) and requires your accountant to file specific tax forms. Ask your accountant if you are eligible to take advantage of this “mini” tax deferral.

I work with a number of Investors.  All different levels. Why do I say this?

 

I receive a number of phone calls from “beginning” investors.  My very personal philosophy is that we all started somewhere. I receive and do ESCROWS with cross agents that have never sold multifamily as well.  I still believe that we all started somewhere.

When I started in the business 24 years ago; there were a number of people that helped me along the way.  I am always thankful for this. Anyone that knows me knows that I feel that it is my personal responsibility to give back.  I love educating not only my Investors but also other agents. I am currently in two escrows that I am helping the other agent understand what they need for their clients.

This does not mean that I do not represent my client correctly, but what kind of an Broker would I be for my clients if an Escrow would fall apart simply because the cross agent needed some basic guidance.  I guess that it is the Mom or now also the Grandmother in me!

This year promises to be outstanding for investors.  Every city in the Phoenix market is exploding with growth.  The companies that are relocating from California (I wonder why?). The people that are moving here due to the job growth.  The housing market is not keeping up. All of these factors not only are indicative of our market but also the growth in the rental prices and the lack of good units for tenants.  EVERYONE of these factors lead to a rich investment environment.

I am dedicated this year to be even more responsive and more on top of the growth of the Phoenix Market.

As one of my Investors, here is your job-call me and lets get you on your path.  READ the emails that I send. GET educated on our market and also how to evaluate the properties quickly and efficiently! 

I will be attending an in depth market update in about 10 days.  You really want to watch for this update from me as it is a GREAT yearly event that I attend so that I can be as effective for you as possible.

Remember that I answer by phone and look forward to seeing your success.  Your success is my success.

Have a GREAT day!

Linda  602-688-9279

This is the time of year that I set my goals and what I want to accomplish by quarters.  Anyone that knows me well knows that I take this time to reset the batteries. I have done this and have great plans and some of them include my investors!

First, I am attending in the middle of January a market update that will include 4 different leading economists for the Phoenix Area.  I will be sending you an in depth market update towards the latter part ofJanuary-so STAY TUNED.

I have given careful thought to the next.  First, I am offering the videos of the Legacy Seminar at a discount this weekend.  I really want you to go through this. I am also offering my book (which is a great add on for $50.00 this is a discount of almost $50.00.  You will need to send me a check for $50.00 and I will mail it to you-no matter where you live.

Here is the BIG news.  In November, I spent three days developing a trailing twelve spreadsheet and it is done.  I will be giving an advanced seminar locally (yes you can fly in) on how to do a trailing 12. This will be given on Saturday Feb. 1, 2020.  I will also be going over how to prepare the rent roll and the importance of this. If you own property or even sell this type of property-you need this. This will be limited to 25 people. Cost will be $500.00 per person-call me for couples discount.

This may sound like a sales pitch-it is not.

I wanted to keep everyone up to date on what is happening.  Education is the key to good and smart investing! Please don’t pay thousands of dollars to the so called real estate gurus! Use this money for your down payments.

I will also be introducing some new vendors after the first of the year so this should help round out your real estate team and give you more choices.

So as the bumper sticker says “sit down, hang on or be left behind and remember that I answer my phone!  602-688-9279.

HAPPY NEW YEAR and make it a good one!

Linda

How much time do you have left?

Recently one of my friends asked me what I want to do for the rest of my life.  The other item that I was asked was would the people that you spend your time with, would they come to your funeral?  Maybe this is a bit morbid but think about it. Are you wasting time and energy on unimportant items. Or giving your energy to people that really don’t care or want to care about you?

Here is a way to look at it.  I will be 64 in a short period of time.  Let’s say that I live to be a hundred.

Suppose I see my kids that live her once a week. This means that I will see them for 1,872 times.  Not enough for me.

The kidis that live out of state (2) of them I see about twice a year. This means that I will only see them 72 more times.  THEY BETTER move home.

The long and much enjoyed motorhome trip that Tom and I went on this summer means that I only have 36 of these to go on.  I need to plan these trips carefully as there is so much that I still want to see.

I want to spend my time with my Clients that I really enjoy and that together we can be successful.  How many more meetings will we have?

This is a short but very important blog today.  Put a high value on your time and energy. Make each and every day count.  As you get older the time goes faster and faster. Do not wake up and realize that everything you wanted to do has passed you by.

MAKE your bucket list and knock it off!  I am collecting stamps from all of the National Parks.  I just started this recently and have many more to go! I am collecting stamps from the different States of this GREAT Country and I have more to get!

Stop and look at the sunrise, I did recently and marveled at how beautiful it was.  My day was great that day and I demand more of these!

Have a VERY MERRY CHRISTMAS!

Remember that I answer my phone and value our relationship,

Linda 

602-688-9279

The definition of relevant is being connected  with the matter at hand. This goes hand in hand with my thoughts of goals and staying on the path to attain them.

First and foremost it is important to state your goals. IN WRITING!

Every year I personally write a business plan.  On this plan I include both my personal and business goals. I not only do this for the coming year but 5 or even 10 year goals.

Years ago, a mentor sat with me to do this.  Here was and is my “Kodak” moment or take away from this life changing lesson for me.

If you write a business plan once a year a thought could be that you have goals that may or may not be realized?  So you have one chance a year to make an error. 

What if you wrote a business plan once a month?  Then you have 12 chances a year to reach your goals?  What is you wrote 52 business plans? Or 365 business plans? Things change with yourself, the economy and a myriad of other factors. So instead of writing a business plan once a year and failing by something changing, shorten the time distance.  Keep in mind your yearly or longer term goals.

I actually set m 5 year goals this time of year.  Then I lay down my path for the coming year. The next step that I do is think about what I want to do each quarter.  In addition,monthly goals are laid out.  

Once I have this, then weekly goals become easier to visualize. I actually write a list on a daily basis of to-do items.  I follow it. I do it.

Do not think that any of this is easy, it is not. I use the tools that I have developed over the years to stay on track.  You might use a legal pad or a spreadsheet. Some people actually use their calendar. In today’s world with the calendars being online, it becomes easy to write and then move the tasks or goals to the next day if you did not complete the item.  

I cannot stress how important it is to WRITE the goals down.  Sharing them with someone makes you more accountable. Sometimes only to yourself.

My sister told me one time that if she could not sleep due to things going through her mind that she would keep a pad next to her bed and write them down. This cleared her mind so that she could wake to her “list”.

It doesn’t matter how you get to the goal, just get started. This will keep you relevant to the life that you want to lead.

Remember that I am here to not only help you reach your goals but help you stay on track and REACH these goals!

Call me I answer my phone!  602-688-9279.

 

Linda

Cell Phone, Texting and Follow-Up-How IMPORTANT are these items?

One word VERY!

If Sellers knew how little follow through their listing agents did-they would FIRE the agent.

If Buyers or Sellers knew how important it is to follow up with emails or signed written documentation, they would be shocked!

It should go without saying the Follow Thru is so critical!

If you call me or leave me a message, I either answer or call back.  One of the most common comments that I get is “You answered your phone!” or “You called me back!”.  Guess what my answer is – “Well you called me!”. 

Quick story, over 22 years ago I answered a Real Estate call on a Sunday.  The Client had called more than a handful of agents and I was the only one that called back.  Guess what Tom and I have been together for over 22 years. Yes, it was Tom that called for Real Estate.  The family joke is that I ran his credit and he found me in a newspaper before we could date. Later raise all 4 of our combined kids and now the next generation!

Even today, I pick up my phone and answer or return voicemails. Other agents are pleased.  In fact, so many listing agents do not even respond to agent inquiries that it is unbelievable that any listings get sold.  One agent called me last week and his comment was,”Linda, I knew that you would answer your Phone.”.

I see in the private remarks of Listings – DO NOT CALL ME only use text.  I would fall off my chair if I was a Seller and saw this! Are you kidding me?!! 

Remember that as a Buyer or Seller that emails do not count to amend a contract!  Only the signed documents work! Signed by both parties! However, when a phone or text conversation is done follow through with an email to confirm the conversation.  

I was actually taken to court by a client that alleged that I did not communicate.  In a six month time period there were over 4,000 emails. The client NOT prevail as all allegations were well documented and certainly communicated.  As the market was at the bottom and the client felt that they could collect from an insurance company, it was proven to be negligent and they went on their way.

Reputation is everything and it should go without saying that follow thru is the key to success.

I work hard and remember that I do answer my phone-just call me!  Leave a message or text me!

602-688-9279

Linda

First and foremost let me say that if a Seller wants to Sell and the Buyer wants to Buy, it is the first priority to make this happen.

One of the most common errors that I see Real Estate agents do is say that their Buyer or Seller won’t do this.  My response is-have you asked them? I should be clear that my philosophy is that it is not my property or my money and therefore not my decision.  Even if I believe that my Client will or will not do something, I do not sleep in their bed nor live their life. What they may or may not do yesterday can change today. 

Another issue that I come across so very often is an Agent that can only negotiate in a VERY hostile way.  What happened with discussing our issues and seeing the best win win for everyone?

How about texting or emailing incessantly?  So often by picking up the phone a quick conversation can solve all ills.  You can always follow up with an email for confirmation.

Remember that ONLY a written word form the Buyer or Seller can alter the terms of the Contract.  So often I receive an email from an agent stating that this or that is going to happen. Even if acting on the Client’s direction, again only the written work prevails and only if signed by the Buyer and Seller.

How about the Listing Agents that place in private remarks-only text me do not call me.  Really? If the Sellers knew that their agent was putting this out there, I wonder if this agent would continue as the listing agent.

I also want to reiterate that choosing a Broker that answers their phone and is responsive to emails and texts is so important.

So on to Broker to Broker relationships. If there is a choice, wouldn’t you rather work with an experienced person in whatever business that you work in?  How about one that you have had a positive experience with versus an unpleasant one?

Many Commercial Brokers experience the very unpleasant experience of an agent that is primarily a residential agent trying to do a commercial contract with little to no experience.  What a shame for the Client. I have asked for rent rolls and the Agent has NO idea what this is.

So often when Commercial Brokers list a property, the first email goes to the Broker List that they have worked with.  I know that a number of Brokers look for my listings as I not only update the financials every month but actually include all the relevant due diligence under the documents vault.

I can assure you that if two Brokers (even if they are friends) are cross agents, they absolutely will represent their respective clients correctly. That is our job. A true professional knows that even if the contract becomes adversarial that this is business and not personal.

These transactions can be difficult and it is a shame that so many agents make them harder than they need to be.

How about that even experienced Brokers can learn from each other?  Isn’t this what the world is supposed to be about?

Remember that I answer my phone and welcome your discussions.

Have a great week!

Linda 

602-688-9279

Toughness or maybe just Perseverance is an Essential Ingredient for Success 

Almost every leader, entrepreneur and manager wants to have and hone the qualities that contribute to and best predict success.  For example, most leaders want to demonstrate the qualities of confidence, organization, selflessness, structure, humility, and conscientiousness.  But, in excess, even the best leadership qualities can become flaws. Someone who is too confident can become arrogant. A person who is too organized can become obsessive.  A person who is too selfless can become a people-pleaser. A person who is too structured can have trouble being creative. A person who is too humble may not be able to inspire others to follow.  A person who is too conscientious can become neurotic. However, there is one trait that every leader should have in as much abundance as possible. That is perseverance and passion for long term goals.  There doesn’t seem to be such a thing as too much of this. The more perseverance a person has, the more they press on in the face of adversity. There is no downside to it.

Perseverance is a key trait – or combination of traits – that is absolutely essential for success. People with perseverance usually demonstrate courage, resilience, conscientiousness, follow-through, and excellence in very specific ways.  A person with perseverance usually has a goal he/she cares about so much that it organizes and gives meaning to almost everything he/she does. Best of all, perseverance is something that can not only be learned, but also something that tends to increase with age.

How to Increase One’s Perseverance

According to Travis Bradly in his article entitled “11 Signs You Have the Grit Needed to Succeed” published in Entrepreneur, “Developing perseverance is all about habitually doing the things that no one else is willing to do. Right there explains why many people lack perseverance.

Top 10 Ways to Help Increase Perseverance

  1. Work twice as hard as everyone else.

Many studies show that while talent is important, effort is more important.  In fact, it counts twice. Consistent, solid effort and focus on a particular goal is much more important than intellect or talent in achieving that goal.  People who are highly-successful are known for working long hours and really focusing their energy and time only on tasks that further that key goal. Warren Buffet, the self-made multi-billionaire, spends most of his day most every day focused on reading and studying the financial statements of major companies.  He cuts away all of the tasks that don’t add any value to his goal of investing in the best companies. It is reported that he has a three-step process for prioritizing.

  • Step 1:  Write down a list of 25 career goals.
  • Step 2:  Then consider which, from the list, are most important.  Circle those.
  • Step 3:  Look at the 20 career goals not circled.  Avoid those at all costs. Those are just distractions from the five highest-priority goals on the list.

Call it ruthless prioritization or call it focus, but it certainly has worked for Buffet.  One more step to Buffett’s process for prioritizing. I believe that most successful people are successful because they find a common purpose among their top goals, and that becomes the “ultimate concern” or the compass goal that guides all their activity. In the case of Steve Jobs, for example, his ultimate concern was to create a company that helped people to “think differently.”  The computers, phones, and pads that Apple sells are all just tools to help people think differently.

  1. Make a lot of mistakes.

To err is not only human, it is good.  The ability to fail, try again, fail, try again, fail, try again (you get the picture) — all without a moment’s pause – helps build toughness.  Some people lack the confidence and self-esteem to fail repeatedly and not feel discouraged. But those who can – who can fall off the proverbial horse or bike and get back on again and again — increase their perseverance.  The more willing a person is to try things that sound crazy or ridiculous — and may look foolish – all for the sake of achieving a goal, the more perseverance increases.

  1. Press on even when feeling vanquished.

Tough times come to all.  No one can be in business for long without facing adversity or trials.  No one can try to create something new without having setbacks. It is when all seems lost or pointless and things are most bleak that it is important to persevere.  Press on despite a deep desire to quit. Consider it a ‘perseverance muscle’ that must be exercised in order for it to become stronger.

  1. Make tough decisions that everyone else avoids.

No one wants to deal with difficult situations.  Reprimanding a subordinate. Hiring someone that no one else thinks is a good fit.  Shutting down a project or company that is clearly not going to work long-term or big picture.  Having both the insight and metal to recognize when something difficult must be done and then doing it fosters toughness.  It’s not fun, but it is vital.

  1. Shut out fear, doubts and negative self-talk.

There is enough fear and doubt that can creep in without anyone feeding it.  A person who wants to succeed must therefore ensure that such negative influences are shut down or kept away as much as possible.  Negative people must be distanced or removed. A person with toughness will not allow the negativity of others to bring them down, and they won’t allow negative thinking to infiltrate their minds.  They cast out fears and doubts, and focus on the goal even when no one else is on board or believes.

  1. Trust your intuition.

Intuition is about relying on one’s collection of all subconscious experiences.  It’s basically a catalog of a whole lot of information that the mind has gathered for an entire lifetime and then created shortcuts to access.  They are insights that aren’t immediately available to the conscious mind at a given moment, but are all things that were learned and felt at some point.  It’s often referred to as a gut feeling. People who want to increase their toughness need to trust their gut in situations in order to hone that ability to access all of the collective wisdom in the unconscious mind.  Many people are hesitant to trust their gut, but as people age, they learn to rely on intuition more so.

  1. Be patient and willing to delay gratification.

In a multitude of studies, it’s been shown that people who are patient and willing to delay gratification now for a better reward later are usually more successful.  This is a sign of toughness. Those who can exercise their need for immediate reward help to hone this “patience muscle.”

  1. Stay the course even if no else believes in the vision.

A vision statement is a statement of words describing where and what an organization wants to be in the future. It usually remains unchanged for many years. But often leaders may have a vision of where they want to go, but don’t have the support of the organization.  Simply put, they may not believe in the vision. Case in point. A new CEO was brought in to turn Borders Books around when the company was struggling to recapture market share lost to Amazon, Walmart, and others. However, the CEO was unable to gain the support of the organization and eventually the Board of Directors fired that CEO and hired another, and then another.  No CEO could stay the course because not only didn’t the employees believe in the vision, neither did the Board. Eventually, Borders went out of business. It is easy for lack of support to undermine and eventually quash any goal. Only those who are willing and able to move forward even if no one else believes will ultimately succeed. That tenacity builds toughness.

  1. Over-deliver on promises.

According to a study by BBB/Gallup, when asked what CEOs could do to improve trust, 72% of respondents to one survey said, “Do a better job of keeping your promises.” Another study found that 40% of consumers who had received a promise from a business in a given year felt it was not delivered, and of those 62% experienced multiple broken promises from that same business.[8] It is not unusual for companies and its leaders to not deliver on promises.  But the most successful people – those with a lot of perseverance – make sure to over deliver.  They believe that if you promise the moon, you deliver it with a handful of stars so they can shine in the customer’s eyes.   Delivering on promises means doing what you say you are going to do when you say you are going to do it. Following through on a commitment, small or large, helps build trust each time. It also helps to build toughness.

  1. Care about the details, even when tired.

Often, business leaders are big-picture thinkers who have a low tolerance for details. They’re very clear about where their visionary journey will take them, but they may neglect the finer points and details.  But the most successful people think strategically and also pay attention to detail. They don’t let big-picture thinking stop them from caring about the small stuff. Paying attention to the details is often what delivers a competitive advantage.  Certainly Apple’s attention to detail is what made its computers worth the price tag. Those who care about the details, even when tired, are those who build toughness.

In sum, these ten things can be done by anyone who puts their mind to it.  Anyone can be tough with a little extra focus and effort. Or, if a person waits long enough, it is likely to develop with age if they have become or are willing to perseverance to the goals that they develop.