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Control over Your Vision
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In the 1970s, poor dad would often drive by a shopping center near Waikiki and say, “When I was in college, I could have bought all that land for $5 an acre.” Or the next time we would drive by it he would say, “Did I tell you about the time a salesman offered me that land for $5 an acre?”

The kids would reply, “Yes, Dad, you told us many times.”

My dad was in college in the 1940s. At that time, the land he pointed to was a swamp. By the 1960s that same piece of land was one of the largest shopping centers in the world. I estimate that a $500 investment in the 1940s is today worth at least $500 million. The person who did purchase the land was the same age as my dad. The difference between their personal fortunes is a difference in vision.

Paraphrasing something Warren Buffett once said, if history made you rich, then librarians would be billionaires.

Rich dad said, “Many people go through life driving their car by looking in the rearview mirror.” He also said, “These are the people that are often heard saying, ‘I would of, I should of, and I could of.' ”

Recently I was looking at a small house that was listed for $160,000. A person who lived next door came forward and said, “I've lived here for twenty years. I remember when that house was $11,000.”

“You should have bought it back then,” I said.

“Oh no,” the neighbor said. “Eleven thousand dollars was too much money back then. It wasn't worth the price.”

“Maybe you should buy it now,” I replied.

“Oh no,” the neighbor said. “A hundred sixty thousand dollars is way too much money for this house. It isn't worth the price.”

Lower Mind Thinking

In control number two, the chapter on control over your emotions, I quoted rich dad when he said, “When it comes to money, many people are financial hypochondriacs.” Financial hypochondria is thinking that often comes from the lower mind. If a person thinks only from their lower mind, their vision of the future is often blurred. These are the people that are often found driving their car by looking into the rearview mirror. It is often their fear of losing that causes them to not take action when once-in-a-lifetime opportunities are placed right in front of their eyes. Later as they drive down the highway of life, you hear them saying, “I would of, I should of, I could of.” As many wise people have said, “Hindsight is 20/20.” Rich dad said, “If you want to be rich, it is best to be farsighted.”

A Very Bright Future

When I caution people about the coming stock market crash, I am not pessimistic about the future. I am very optimistic about the future. Warning people about the coming stock market crash is the same as warning a friend about a road up ahead that is washed out. If the person will take another route, they can still get to their destination safe, sound, and on time.

As captain of your own ark one essential skill is to develop your vision, which rich dad defined as seeing with your mind rather than your eyes. In order to develop this vision, it is important to first train your middle mind and then go out in the real world and allow your higher mind to develop its natural wisdom, often called intuition and instinct.

The Future Will Be Different

Warren Buffett's comment—about how if history made you rich then librar-ians would be billionaires—is important because the future will be different. Things are changing far too quickly to attempt to see the future through your rearview mirror. Regardless of how old you are, all you need do is stop for a moment and think of all the changes that have happened in the last few years. Thinking back upon my life, I remember when a golf club called a wood really was made out of wood. Today, the new woods are made out of new composite materials I have never heard of. In other words, the game remains the same, but the tools used to play the game have changed dramatically . . . and that is true in many areas of life. Today when someone says, “Let's stay in touch,” it could be via foot, car, bus, plane, telephone, fax, regular mail, or e-mail.

If you go further back in time, you will see that just a hundred years ago, not even kings, queens, or the richest people in the world were flying on planes because there weren't any. Almost anyone can afford to fly today. A hundred years ago, only the rich had cars. Today, cars are everywhere. A hundred years ago, you needed to know Morse code to communicate over the telegraph. Today, people all over the world carry cell phones. I do not know too many people who know Morse code. In 1990, the world did not know what the World Wide Web was. Today, the Internet is changing the future of the world faster than any other invention in history.

How Do You See the Future?

In August of 1981, I traveled to a ski resort in the mountains between California and Nevada. I went to attend a conference entitled “The Future of Business” with Dr. R. Buckminster Fuller. At the time, Dr. Fuller was considered one of the world's leading futurists. Even though I knew a little of his fame and reputation, I was still somewhat skeptical that anyone could teach you to see the future without a crystal ball. As such, I went with a large amount of doubt.

But that week with Dr. Fuller was a turning point in my life. It was not an easy turning point, but I believe it was a turn for the better. There was a lot to learn on how to see the future, far more than the scope of this chapter.

Yet, since this chapter is on vision, I thought I would pass on the method Dr. Fuller used to predict the future. The process I shall describe is a principle Dr. Fuller referred to as ephemeralization. Without getting into too much mind-numbing detail, I will use the story of the Titanic as a simple example of ephemeralization.

In the beginning, centuries before the Titanic was built, humans first learned about the possibility of ships by clinging to a log and floating downstream. Soon, humans dug the log out and created a dugout canoe. Next came lighter boats using planks and rib construction. The wooden ships got larger and larger until the battle of the Monitor and Merrimac, the first ironclad warships. Once steel construction was introduced, ships grew into giants of the seas, carrying passengers, freight, and armaments throughout the world. Businesspeople began investing in bigger and bigger ships until the Titanic disaster. Soon after the Titanic sank, the golden age of ships ended. That is an overly simplified example of ephemeralization, one of the principles which Fuller used to predict the future.

Simply put, ephemeralization is the process of starting small, growing bigger, becoming too big, then small again, suddenly disappearing, or becoming invisible, as in the case of wireless communications. On occasion, the end of growth is marked by a disaster as in the case of the Titanic and the giant airship the Hindenburg. Fuller would say that the technology simply grew too large. In the case of the Titanic, and similar ships of that size, they grew too large to maneuver, men operating the ships believed they were unsinkable, and a new technology was on its way . . . and that new technology was the airplane. The airplane was in its infancy stage, starting small, growing bigger and bigger.

Think of It as a Hotel

I was in New York soon after the World Trade Center disaster. Walking down Fifth Avenue, I stopped to purchase a news magazine with the picture of the burning World Trade Center towers on the cover. Two things hit me from that magazine. One was how the two twin towers of the World Trade Center stood out, especially looking at them across the water from the shores of New Jersey. Although I had been to New York many times, it never occurred to me how much those towers dwarfed the other buildings.

The second item that caught my attention in the magazine was a full two-page ad for a new aircraft. The headline for this aircraft ad read, “Don't think of it as an aircraft. Think of it as a hotel.” The double-page ad showed the interior of the aircraft having hotel suites instead of seats, a shopping center, and a small bar and restaurant. In many ways it looked like a set from the movie Titanic.

Standing on the New York street corner, my mind drifted back in time to 1981, at the ski resort on a warm summer's day listening to Dr. Fuller talk about the symbolism of the Titanic. Did the attack on the World Trade Center signal the end of the golden era of airlines? Had giant skyscrapers, symbols of the Industrial Age, suddenly become dinosaurs? Had big business become too big? Did the attack on the Pentagon represent the end of Amer-ican economic and military leadership? And if the attack symbolized all those things, the question is, What comes next? Could anyone now see the future?

During the 1981 event, Dr. Fuller mentioned that after 1957, the year the Russians launched the first satellite, all new technological breakthroughs would be invisible, not visible to the unaided human eye. Explaining further, Fuller mentioned that after the Titanic disaster, we could still see the new technology that would replace the old technology, in this case, the airplane, with our eyes. After 1957, the new technology that would replace the air plane would be invisible. That is why, while standing on that street corner in New York, gazing into the future, I was reminded to begin seeing the changes with my mind, not with my eyes.

Long before September 11, 2001, Buffett advised investors to join AA, which stood for Airlines Anonymous. Buffett said that ever since the Wright brothers, the airlines had never been a very profitable industry. After 9/11, the airline industry and all the businesses that support that industry, like hotels and rental cars, could be industries in decline. While there will be airlines, hotels, and rental cars for years to come, a new technology is about to change things for all of us.

Although Buffett did not invest in major airlines, he did invest in a com-pany that operated small private corporate aircraft, again prior to September

11. I seriously doubt if Buffett ever met Fuller, yet the two men followed very similar principles. Fuller added that if the technology did not disappear and go invisible, the technology would get smaller, as it did in the case of the smaller business jets.

Instead of the example of smaller business jets, Fuller used the example of computers. Not very long ago, computers were physical monsters, requir ing a large dedicated room, many people to run it, massive amounts of elec tric power, and limited computing capacity. Today, computers are smaller, much less expensive, and have much more computing power than the larger mainframes of old. That is another example of ephemeralization, the ability to do so much more with so much less.

Again, these examples are overly simplified. Dr. Fuller went into much more depth with his explanation of this important principle, one of the prin-ciples he used to predict the future. The main points are that things start out small, grow, and soon become big . . . maybe too big. The other point is that after 1957, the new technology would be invisible. Today, not only do we have the business of smaller business jets booming, but video conferencing is also finally beginning to be accepted. Video conferencing is the growth industry that is taking away business from the larger airline industry. Video conferencing is one of the invisible technologies of the Information Age that are replacing the need for giant aircraft.

Mutual Funds Are Too Big

Since the late 1980s, the mutual fund industry took off. There are more mutual fund companies than public companies. Some mutual fund companies are even larger than many of the companies they invest in. The question is, Have some mutual fund companies become too big? I'll leave that answer for you to decide. The fact remains that more and more people are becoming independent stock market investors because a little investor can be far more maneuverable than a large mutual fund. Also, there has been an explosion in people investing in hedge funds rather than mutual funds. Again, the reason is the same reason Warren Buffett would invest in a small jet company rather than in the major airlines. The reason is, when things become too big, they are less maneuverable and often think they are unsinkable.

How to Improve Your Vision to See the Future

One way for you to see the future is by watching things getting too big. Then watch for something small or invisible to replace it. For example, soon after the attack on the World Trade Center, Chevron and Texaco, two giant companies, announced that they were merging to become a giant of an oil company. On the same page of the business section, a smaller company announced a breakthrough in fuel cell technology, a new technology that has the potential of taking a lot of business away from big oil companies.

Bill Gates and Steven Jobs became very rich young men by seeing what big companies could not see. Bill Gates got the software contract for IBM's PCs because IBM did not see the spread of powerful and smaller computers. Steve Jobs became a rich man by using a technology that Xerox did not know how to market, a technology that helped create the Macintosh computer.

Invisible Skyscrapers

In early November, I returned to New York for the second time after Septem ber 11. On this trip I met a friend who had moved his office from the Empire State Building to a smaller office building. He said, “My staff were quitting be cause they did not want to sit in the next target.” After he made that com ment, I realized that we had officially entered into the Information Age . . . the age where being invisible is better.

The network marketing industry is an Information Age business because it is an invisible business. Because it is an invisible business, it is often hard to describe the business's benefits to people who think with Industrial Age minds and who still try to see the business with their eyes, rather than their minds.

It would be hard for a terrorist to attack the network marketing industry simply because the business offices are also invisible. Most network market ing offices are hidden in homes throughout the world. There are people who are running massive businesses from their homes that are invisible. But if you could see their business, it would look like invisible skyscrapers rising from neighborhoods all over the world.

The Invisible Economy Is Strong and Growing

Dr. Fuller predicted that we would soon witness the death of the Industrial Age. He also predicted that it might be difficult for people to see the dawn of the Information Age simply because the changes would be invisible. Dr. Fuller died in 1983 and did not live to see many of his predictions come true, but they did.

Just look at the Internet and you will see that the world of the invisible is here. This invisible economy presents a growing problem for governments because governments are by-products of the Industrial Age. The government is trying to collect taxes and define borders for the invisible economy of the Information Age. This problem for governments will grow if the invisible economy becomes too big and government cannot collect taxes or define borders. If this happens, the currency of the country will eventually weaken simply because the power of a country's currency is linked to its ability to collect taxes. So have governments gotten too big too? Will there still be government, as we know it, in the Information Age? Can government become invisible?

Dr. Fuller believed governments were obsolete. He believed that humanity was about to evolve or disappear because of government's diminishing powers. Fuller believed that humans had to choose between utopian worlds of greater personal integrity and bigger government, or humanity, as we know it, would disappear. In other words, we as individual human beings needed to solve more problems rather than turn those problems over to the government.

Lookouts on the Bow

For centuries, captains of ships have always posted a lookout on the bow of the ship as well as one in the crow's nest or on the bridge. As captain of your own ark, you too will need to post lookouts on your bow and in the crow's nest. Metaphorically that may mean:

1. Keep your word. Dr. Fuller said that we were entering the age of integrity. Integrity simply means whole or complete. That means that your thoughts, your words, and your actions need to be the same. If you will do that, the future is yours.

2. Keep an open mind and your ears tuned for change. Since changes are now invisible, you will have to see more with your mind than your eyes.

3. Learn to read financial statements. Regardless if you invest in companies, stocks, real estate, government securities, or yourself, a financial statement allows the mind to see the true financial condition of the investment, government, or person in question. Always remember that a banker wants to see neat and complete financial statements. Many times a banker decides to lend or not to lend you money in the first three minutes. If you do not have neat and complete financial statements, are not articulate in explaining your financial position, then the chances are that the only kind of debt you will be granted is bad debt at high interest rates.

4. Use technology . There are now computer programs that allow the indi vidual to see what before only the rich or powerful could see. I have friends who trade stocks or options. They now have charts and software that give them the same power to see and search for investments that giant invest ment firms have. The individual investors have the same power as the big firms because of these new tools of the trade. Similar advances in technology are available for businesses and real estate. As stated earlier, the game of golf remains the same; just the tools have changed.

5. Watch for bigness. There is a saying in the investment world that when someone becomes famous enough for the front cover of national magazines, their career is over. Not long ago, in the Industrial Age, a blue chip company may have been a leading company for sixty years or more. Today, with ad-vances in technology, the life expectancy of a company is much shorter. In other words, the moment something or someone becomes too big, they are about to decline and be replaced by something or someone new. That same observation tends to be true for mutual fund companies, real estate, and ca-reers. There is always something or someone new coming along to take the place of the leader. Your job is to be aware of people or things becoming too big and then watch for the replacement.

6. Watch for changes in the laws. Rich dad was forever watching for changes in the laws and the effect the laws had upon our future . . . ERISA and its subse quent amendments are an example. The law that created Social Security has created a problem that will have to be solved one way or the other. I suggest you watch how government ultimately decides to handle this massive mess. As rich dad said, “Changes in the law change our future.”

7. Watch out for inflation. Just as markets go up and down, so does inflation. Right after September 11, 2001, the Federal Reserve Bank flooded the world with U.S. dollars to provide economic stability and liquidity. The long-term effect of all this printed money may lead to inflation, which means the

U.S. dollar goes down in value. If inflation sets in, anything of questionable value will lose value, while things of value, assets such as real estate, gold, sil ver, and utility stocks, may greatly increase in value.

Governments do five basic economic things:

1. Print money

2. Collect taxes

3. Spend money

4. Push problems they cannot solve forward into the future

5. Control the economy through interest rates

During the 1990s, two more reasons stock prices went so high were low inflation and low interest rates. When inflation goes up, the government of ten counters it by raising interest rates. When interest rates go up, stock markets usually come down. That means during periods of high inflation, mutual funds generally take a beating or fail to increase in value.

Those of us old enough to remember the late 1970s may remember when inflation went through the roof. When inflation went through the roof, interest rates hit all-time highs, and the stock market went down. I am not saying that such a time will come again, but I would be vigilant. If we enter a period of high inflation and high interest rates, people counting on their DC pension plans and mutual funds may find themselves in serious financial trouble. If inflation rears its ugly head, savers will be punished and debtors will be rewarded just as in the late 1970s.

8. Pay close attention to government's handling of its social programs. It is not news that Social Security, Medicare, Medicaid, and other government programs are in trouble and the problem is getting worse. As stated earlier, government is not solving these problems . . . it is pushing these problems forward onto future generations. The problem is, sometime around 2016, all this pushing the string forward is about to come to a head. Pay close attention as to how the growing problem is handled. If governments begin raising taxes excessively, be prepared for anything, and be prepared to act quickly. Today, money can literally move at the speed of light.

A 2002 report from the National Conference of State Legislatures detailed how serious the problem is becoming. Twenty-eight states have spending overruns and lower than expected revenues.

The report also shows the specific programs the states are overbudget on. Medicaid is the leading reason for overspending. The problem is only go ing to get worse as more and more people grow old and need medical care they cannot afford. This is why we all need to watch how the handling of this growing problem unfolds.

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