Everte Farnell is President at 9 World’s Publishing, Inc. and a freelance copywriter. He joins the show to share some secrets to copywriting and whether success within the publishing industry is dependent solely on copywriting. He also tells us about the hedge fund advertising regulations and whether hedge fund advertising makes it easier to defraud the public.
Find out more about Everte Farnell at www.evertefarnell.com.
ANNOUNCER: 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 multi-millionaire 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.
JASON HARTMAN: Welcome to the Creating Wealth Show. This is your host, Jason Hartman, and this is episode number three hundred and forty-nine, #349. Our guest today will with Everte Farnell, who was originally slated for my Speaking of Wealth show; however, I must tell you that my guest bookers—I don’t know, they kind of book these guests strangely sometimes, as to which show they’re going to be on. And if you’re a new listeners, we have several shows that we publish, although this is the first and most popular, the Creating Wealth Show. But anyway, this guest was originally booked for that show, because he is a copywriter. However, here is what my guest booker may not have known, that I think you’ll find very interesting. He specialized in copywriting for the financial services industry, and hedge funds. So, he has quite a few interesting insights to share about the way they advertise! And I thought you’d really enjoy that. So we’ll get to that in a few minutes here.
But gosh, how you doing with your real estate investments? The market is crazy! And I was hoping for the holidays that it would actually slow down a little bit. Now, when does a businessperson ever say they want business to slow down a bit? Well, after a long and very busy year. And it has definitely been a long and very busy year. But I’m very grateful, and love what we do, and most of our clients, I hope, love what we do as well. I get notices, or notes on that all the time. Just got one this morning from one of the listeners. So we appreciate that, keep it coming, and we will keep providing the best possible educational content we can, out there for you. And a lot of great guests coming up on the shows. I know I’ve mentioned it before—our 10th show, which is the next episode—remember, we go off topic any time—I think we’ll do Peter Christ for that 10th show, and then #351 will be Kevin Armstrong, and #352 will be Harry Dent, back for the third time. And I’d say this was probably his most interesting show he did with us. The members of course got that a little sooner.
And then we’re going to do John McAfee of McAfee Security and antivirus software fame, yes, that’s who it is. And we’ve got Steve Paige is gonna talk about credit enhancement on episode #354. Jeff Desich with Equity Trust about IRA investing, #355. And John Stossel—yes, John Stossel. You know who that is, of course: the investigative journalist and reporter who is all over the television set, and does a great job getting into some of these things. We’ve got him slated for #356. These shows, by the way, have already all been recorded. And that leftist thinker, Noam Chomsky, for #357. But speaking of leftists, when are we going to have Bill Ayers? That one’s recorded too. We’ll probably do that one as #358. We’ll do two communists in a row, how do you like that? And I know, if they’re listening—Bill Ayers on the interview said he was a communist with a small ‘c.’ His words, not mine, people. But I gotta tell you, as you know I’m not much of a lefty in terms of my political leanings. However, they do make some good points sometimes, and I hope I brought that out in my interviews with Noam Chomsky and Bill Ayers. I may never live that down, doing those interviews. Sorry you right wing wackos [LAUGHTER]. Of which I agree with you guys a little more than I do the left side.
But all in all, I’m really a libertarian more than anything. Anyway, enough of this political stuff. I don’t know how I get off on these tangents. I was just telling you the upcoming shows, that’s all. Didn’t mean to go into a political conversation. But, I gotta tell you. I love Audible. Oh, by the way! I interviewed the founder of Audible last week! And he’ll be on the Speaking Wealth show, if you want to catch that one. Do you know he founded that company way back in I think it was 1994 or 1995? Yeah. That was like right after Al Gore invented the Internet. Oh! Don’t make another political remark, Jason. You’ll regret it. Anyway, and then he sold it to Amazon.com. What a fantastic company!
Of course, you can buy my products on there as well. Just go to www.audible.com and search Jason Hartman. But one of the things I love about Audible is, I’ve always believed that the automobile should be a rolling university, and I don’t drive very much anymore, however, I am constantly consuming audio books. I do love to read as well. I’ve never been a terribly fast reader. I’m quite envious of fast readers. Particularly speed readers. Hopefully some day I’ll learn how to do that one. But in the mean time, I do a combination. I read, and I listen to audio books, and watch documentaries and stuff. Learning should be a lifelong process; I love to learn, and I hope you do too. You probably do, because that’s what you’re doing right now, by listening here.
And the latest book, that I just listened to, and I’m going through it for a second time, is a book by Eric Ries called The Lean Startup. Now, our show here is—the vast majority of it is about economics and real estate investing and how to win the conspiracy that is being perpetrated against the middle class in the United States of America, and around the world, really. But I’d say mostly in the US, because the US has had, and still has, the largest middle class—and I think that’s one thing that makes it a very nice, stable country. However, the middle class is definitely under attack. And you know, one of my big missions in life is to help people jump up into the upper-middle class or the wealthy class, or to not be kicked out of the middle class, because of all these very serious forces that are working against you to impoverish you.
And so, you know, we talk on the show, on the last 348 episodes, about how to win. How to game the system. How to beat them at their own game. And use inflation to our benefit, and all this kind of stuff, right? But occasionally we do some more purely business topics. Well, whatever the case, I have always been interested in this book, The Lean Startup. And I think, at the very beginning, I thought gosh, this applies so much to real estate investing. And I’m going to play just a few minutes of the audio book for you, and then comment on it. And I think you’ll enjoy this. Because here’s the concept. We all—I know we do, I do it myself—we all, to some extent in life, get in our own way.
And I may have shared with you before one of my favorite quotes, and I think it’s by Jack Parr, who said, “My life is one long obstacle course with me as the chief obstacle.” We all like to think about the forces out there in the world that maybe keeping us from our goals, and not allowing us to get what we want out of life. But mostly, all we have to do, as Michael Jackson had a song about, is look at what? The man in the mirror. Right? Just look in the mirror! We are, many times, probably almost all the time, our greatest obstacle. So, that’s what we’ve gotta overcome. And as real estate investors, I constantly—look, I know that our listeners, by the way, are all over the spectrum. Some of them are dreamers. They’re like I was when I was 16 years old and I read my first real estate book. Well, three chapters of it. I grew up pretty poor—not destitute or anything, but we certainly didn’t have much money at all growing up in my family.
And as such, I wanted to get out of that! Because I realized that in about 9th grade, material stuff matters. And material abundance matters. And having nice things is not a shallow idea. It’s a legitimate thing. We all, as human beings, have needs, and we all need resources. And yes, we don’t need to have a Ferrari and a private jet, and 10 mansions around the world, starting in the south of France, to live a happy life, but we do need a certain amount of basic resources. And if you look at it, I talk about money—or really, it should be called currency; the dollar is just a currency. It’s a symbol of something. An ever-devaluing symbol of something, I say. And it doesn’t really matter. But what does matter is things. Resources. Because things help us live a more comfortable life.
And if you want an example of this, you’ve probably seen the movie, but the movie Castaway with Tom Hanks. Well, why was Tom Hanks’ life so hard on that desert island after his FedEx plane crashed, and he was one of the survivors of the plane crash? Well, his life was so hard because he didn’t have any stuff! He didn’t have any things! He didn’t have the material things he needed to make life easier and more pleasant. So, things are important. But what I was getting to with talking about The Lean Startup, is the concept of diving in and doing it. An on-the-job training. And it’s really the process of iteration, and you’ve certainly heard that word—iterative. That’s how the media is nowadays, and Ryan Holiday, who wrote the book Trust Me I’m Lying: Confessions of a Media Manipulator—very interesting book. I had him on my speaking of wealth show, and he talked about that. And his book’s quite fascinating.
It talks about how the news media now, through online publishing and blogs, is really—they’re an iterative process. Or in the olden days, the newspaper would come out, and that would be the only edition, until the next edition came out. And they couldn’t change the story and update the story very quickly. Now, it’s instant. It’s iterative. There’s a new iteration all the time. Well, the same is true with the new concept of business, and that’s The Lean Startup concept that Eric Ries talks about in his book. Whereas in the old days, and I remember, because about 13 years ago I had actually applied for a patent for an Internet company I wanted to launch called Publicity Lab. Publicitylab.com, and I never really launched this company. However, I wrote a business plan along with a consultant that I hired. And it was like 60 pages long, and had all these projections going out 5 years, and very complex spreadsheets and all this kind of stuff. But folks? No one can possible anticipate what will happen as you go along the way.
And in the old days of business, which really aren’t very old—but kind of before The Lean Startup business model that you see in a lot of the tech companies in Silicon Valley nowadays, and elsewhere around the world. The concept is let’s launch something that we call an MVP: a minimum viable product. And sometimes, a kind of crappy product. And let’s gain knowledge very quickly from our consumers. And we will put the product out there—the minimum viable product—and there’s something called Startup Weekend, and it’s sponsored by the Kauffman Foundation, which was very involved with us in YEO, when I was in the Young Entrepreneurs’ Association years ago.
And these startup organizations, that’s exactly what they do: they have a whole weekend, and Friday night, people show up, and they stay there sometimes all weekend, and pull these 24 hour work-a-thons, and by the end of the weekend, the goal is to create the minimum viable product. Now, why is the minimum viable product so important? Because you throw it out in the marketplace, you let consumers use it, and then you obtain data from what they do. And I remember Tony Robbins giving the analogy about this a long time ago, back in, well, a long time ago. On cassette tape. Longer than I want to admit ago, that I was listening to Tony Robbins. And he would talk about how an airplane that leaves Los Angeles, it leaves LAX—what a crappy airport LAX is, by the way. Hey, I grew up in LA, I can make fun of LA all I want, okay? [LAUGHTER] Anyway, it leaves LAX to fly to Hawaii. And as it’s flying to Hawaii, it’s off course about 98% of the time. And it’s constantly making adjustments to stay on course, because it’s constantly being thrown off course.
And you know, I’m a sailor, okay? I used to sail all the time, and be a member of a couple different sailing clubs back when I lived in Newport Beach. And that’s one of the things about sailing: you’re off course most of the time. But with these adjustments along the way—these iterations—because sailing and flying and driving a car is also an iterative process. And so is investing in real estate, and so is a business plan for a company. Because what this iterative process does, is it allows companies to produce a much better product for the consumers than they’ve ever produced.
I mean, think about Henry Ford, right, in the old days. And the famous funny quote that I’ve heard about for years and years: Henry Ford would say, you can have the Model T in any color you want, so long as it’s black. He wasn’t doing something iterative; he had to take the car he was going to make, and mass produce it in order to get the price down low enough. And you know, he’s not the inventor of the automobile, which people commonly mistake. That’s Karl Benz, who named it after his daughter, Mercedes, who invented the automobile. Henry Ford invented the assembly line, or at least perfected it. So, Ford couldn’t iterate in the old days of big manufacturing, you know, steel and widgets. You had to just decide you’re going to make, and throw it out there, and hope and pray that the consumer didn’t have any other choice, so they would buy your product.
But nowadays, companies use an iterative process, okay? And that’s the same way we have to invest in real estate. So let me play just a few minutes of the audio book here, The Lean Startup, and I think you’ll enjoy it. And then I’ll be back to comment and tie it into our real estate investment business. Oh, and by the way, before I do this, I must disclose to you that I am literally holding my iPhone up to the microphone. So, don’t hate me for bad sound quality. I just want to get this done. I’m being iterative, okay? I know, I could somehow download and clip the part and send it to our producer, and he could splice it in, and that would be better, I agree. But it would take like a week to get that all done and manage it, and make sure he got it all right. So I’m just doing this very primitive process. Here you go.
ERIC RIES (AUDIO BOOK): The Lean Startup asks people to start measuring their productivity differently. Because startups often accidentally build something nobody wants, it doesn’t matter much if they do it on time and on budget. The goal of a startup is to figure out the right thing to build, the thing customers want and will pay for, as quickly as possible. In other words, The Lean Startup is a new way of looking at the development of innovative new products that emphasizes fast iteration and customer insight, a huge vision and great ambition, all at the same time.
Henry Ford is one of the most successful and celebrated entrepreneurs of all time. Since the idea of management has been bound up with the history of the automobile, since its first days, I believe it is fitting to use the automobile as a metaphor for a startup. An internal combustion automobile is powered by two important and very different feedback loops. The first feedback loop is deep inside the engine. Before Henry Ford was a famous CEO, he was an engineer. He spent his days and nights tinkering in his garage with the precise mechanics of getting the engine cylinders to move. Each tiny explosion within the cylinder provides the motive force to turn the wheels, but also dries the ignition of the next explosion. Unless the timing of this feedback loop is managed precisely, the engine will sputter and break down.
Startups have a similar engine that I call the engine of growth. The markets and customers for startups are diverse. A toy company, a consulting firm, and a manufacturing plant may not seem like they have much in common, but, as we’ll see, they operate with the same engine of growth. Every new version of a product, every new feature, and every new marketing program, is an attempt to improve this engine of growth. Like Henry Ford’s tinkering in his garage, not all of these changes turn out to be improvements.
New product development happens in fits and in starts. Much of the time in a startup’s life is spent tuning the engine by making improvements in product, marketing, or operations. The second important feedback loop in an automobile is between the driver and the steering wheel. This feedback is so immediate and automatic that we often don’t think about it. But it is steering that differentiates driving from most other forms of transportation. If you have a daily commute, you probably know the route so well that your hands seem to steer you there on their own accord. We can practically drive the route in our sleep. Yet, if I asked you to close your eyes and write down exactly how you get to your office—not the street directions, but every action you need to take; every push of hand on wheel and foot on pedals, you’d find it impossible. The choreography of driving is incredibly complex when one slows down to think about it.
By contrast, a rocket ship requires just this kind of in-advance calibration. It must be launched with the most precise instructions on what to do: every thrust, every firing of a booster, and every change in direction. The tiniest error at the point of launch could yield catastrophic results thousands of miles later. Unfortunately, too many startup business plans look more like they are planning to launch a rocket ship than drive a car. They prescribe the steps to take and the results to expects in excruciating detail, and as in planning to launch a rocket, they are set up in such a way that even tiny errors in assumptions can lead to catastrophic outcomes.
One company I worked with had the misfortune of forecasting significant customer adoption—in the millions—for one of its new products. Powered by a splashy launch, the company successfully executed its plan. Unfortunately, customers did not flock to the product in great numbers. Even worse, the company had invested in massive infrastructure, hiring, and support, to handle the influx of customers it expected. When the customers failed to materialize, the company had committed itself so completely that they could not adapt in time. They had achieved failure, successfully, faithfully, and rigorously executing a plan that turned out to have been utterly flawed.
The Lean Startup method, in contrast, is designed to teach you how to drive a startup. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called the build, measure, learn, feedback loop. Through this process of steering, we can learn when and if it’s time to make a sharp turn called a pivot, or whether we should persevere along our current path. Once we have an engine that’s revved up, the lean startup offers methods to scale and grow the business with maximum acceleration.
Throughout the process of driving, you always have a clear idea of where you’re going. If you’re commuting to work, you don’t give up because there’s a detour in the road or you make a wrong turn. You remain thoroughly focused on getting to your destination. Startups also have a true north, a destination in mind, creating a thriving and world-changing business. I call that a startup’s vision. To achieve that vision, startups employ a strategy which includes a business model, a product roadmap, a point of view about partners and competitors, and ideas about who the customer will be. The product is the end result of the strategy. Products change constantly through the process of optimization—what I call “tuning the engine.” Less frequently, the strategy may have to change, called a pivot. However, the overarching vision rarely changes. Entrepreneurs are committed to seeing the startup through to that destination. Every setback is an opportunity for learning how to get where they want to go.
JASON HARTMAN: Okay. Isn’t that great advice? For the real estate investor, too? It’s not just for a startup business. Think about it. If you’re one of our clients, and you have already invested, versus if you’re new and you haven’t invested in any real estate, and you don’t own any income property, and you’re thinking gosh, what is this going to be like? Let me figure it all out now. Let me build a rocket. Versus those who just jump in; they’re driving the car. See how he separates those analogies? You’re not building a rocket with your real estate investing. You’re driving a car. You’re driving your real estate investment portfolio. You can’t figure everything out all in advance. I mean, even if you own a whole bunch of properties, and you have a vast amount of experience. If you’ve got hundreds of properties, for example. Or hundreds of units, at least. You don’t know what’s going to happen tomorrow.
Tomorrow’s a new day. You’ve gotta take feedback, like you’re driving a car. Like you’re flying that plane to Hawaii. It’s an iterative process that develops as you go. Okay? And that’s what I wanted to say. Because I see so many people out there who are constantly getting ready to get ready, or those people out there who have a detour like he said in that book there that you were just listening to—a detour, well, you don’t just give up and not finish your drive. You go around the detour and get to your destination!
I mean, there are twists and turns and problems and setbacks. This is life! I mean, what can I tell you? That’s how life goes! I remember Zig Ziglar saying that the wealthiest, most successful person in America, and the bum, the most destitute bum on Skid Row—they used to call them bums. Now they call them homeless people. Sorry if I’m not politically correct—on Skid Row have one thing in common: they both have problems. It’s just that the most successful person has learned how to deal with those problems, and learned how to overcome those problems, so that they own the problems, the problems don’t own them. That’s not exactly what Zig Ziglar said, of course, but he used that analogy of the bum and the most successful person.
And that’s how we’ve gotta think as real estate investors. We’ve gotta take an iterative approach—an approach where we start driving and then we get feedback, instead of standing there in the laboratory and trying to calculate the exact trajectory of the rocket. See, rockets—they have little retrorockets on them—they don’t get much chance to correct their course. When the space shuttle—the late space shuttle—or the really late Apollo rockets that would take people to the moon—when they would take off, almost all of their fuel was burnt up very, very quickly, just to break out of Earth’s gravitational pull. And after that, they could do very little to affect their course.
So that’s when you need a bunch of brilliant mathematicians and quants, and nowadays those quants are working on Wall Street instead of building real things, unfortunately. But, my little editorial there. That’s when you needed a bunch of scientists and physicists to figure it all out in advance. But with a startup business, or building a real estate portfolio for oneself, you figure it out as you go. It’s a feedback minimum viable product iterative approach. And that’s how we’ve gotta look at it. We’re not launching a rocket. We’re driving a car. There’s your feedback mechanism. You take feedback from the outside—as Tony Robbins calls it, he calls it sensory acuity. And that’s what that airplane has as it’s flying to Hawaii. It’s off course most of the time, but it keeps using its sensory acuity to think gosh, let’s correct this way, let’s correct that way, how can I do that better? And you keep learning things as you go.
Like I mentioned a few minutes ago. Did any of you think, before you owned your first piece of property, that it would be like this? Probably not! There were probably a whole bunch of things you just didn’t know you didn’t know! And you know what? It’s like talking to a young person. It’s great that you get educated, and it’s great that you’re listening to the podcast, and believe me, I appreciate you listening. However, when you talk to a young person, and you try to explain life to them, and you try to—maybe you’re talking to your child, and you’re trying to save them from all the problems that you had, and help them benefit from your experience. You know what I’m going to say here, right? Some people just have to fail for themselves. You just can’t teach some things to people. They’ve just gotta jump in and do it.
And that beautiful poem that I shared many, many shows ago, and I’ve talked about it a couple times. If you want to find it, just go to www.jasonhartman.com and type in ‘mission success.’ It’s a book by the late Og Mandino who was such a great author and motivator, and this book, Mission Success, is awesome, and in the book Mission Success it tells this really, really neat story. But in the book, there’s a poem that takes about five minutes to read, and it’s called The Seeds of Success. And one of the things that he says in the poem—and I wish I had it in front of me so that I could just read that little passage to you.
But, he talks about how you will not fret the future, that he doesn’t know what’s going to come next, but he will take off his coat and jump in with gusto, and muddle through as well as he can, and that’s how we do it as real estate investors. We’ve gotta just earn our stripes, we’ve gotta just jump in, we’ve gotta do it. And if we’re already doing it, we’ve gotta do more, and we’ve gotta keep stretching, and we’ve gotta keep growing.
It’s like Ray Kroc, the founder of the McDonald’s franchise chain. He wasn’t the founder of McDonald’s—that was a restaurant he bought from a couple of brothers that he used to sell cups to, okay? That’s the story. But Ray Kroc really was almost the founder of franchising, really. I mean, certainly the founder of the McDonald’s franchise, certainly one of the most successful, if not the most successful, in the world. And by the way, just a little tangent here, one of the things that makes McDonald’s so incredibly successful is really given away in the preamble to the initiation for the National Association of Realtors, when it says, under all is land.
McDonald’s is one of the biggest real estate companies in the world. And they own property on many, many very desirable corners in big cities, okay? All over the planet. They’re a huge real estate investor. So, we’re definitely in the right business. The most powerful wealth creator in human history, at least for the average Joe. That’s income property. But one of the things Ray Kroc—you know, his favorite quote, so far as I understand from reading about him, it goes like this. It says, as long as you’re green, you’re growing. And as soon as you’re ripe, you begin to rot. So we always have to be growing, we always have to be learning. We always have to be doing, and we always have to be stretching ourselves, and taking on the next challenge.
Whatever you’re doing now with your real estate investment—you can do more. What can you do next? How can you grow? Constantly think about that. What problems can you tackle and overcome? And that will determine how great you can be as a real estate investor. And really, in any other area of life. Okay, enough of that. I always think these little intro portions, these little monologues are gonna be short, but there goes a half hour, right? Anyway, let’s jump over to our guest, and let’s talk about some of the ways that Wall Street advertises. I think you’ll find this pretty fascinating.
Before we do that, though, a couple more things: I still—yes, I still—have some of those physical products that you’ve been buying. Thank you so much for all your orders. They’re such a steal that—the products you’ve been stealing, okay, for the Meet the Masters Home Study Course, this is a closeout deal. We want to get rid of these. I want them out of my storage unit. And the Creating Wealth Home Study Course as well, because we have some of those, so buy those physical products at a super huge discounted price at www.jasonhartman.com. Check that out.
And I think Brittany also has some Black Friday specials there as well. And I don’t know exactly what they are. I think on the other products they’re like 35% off, and I think it might apply to events too. I’m a little bit laissez-faire free market guy, I kind of trust my people and I let them do what they want, so, whatever she did, I’m sure it’ll be okay, and if it’s not, you’ll take advantage of it, and then I’ll give her a hard time about giving the store away [LAUGHTER]. So go to www.jasonhartman.com, click on the products and events and check that out, and also of course, the properties. We’ve got some great properties there as well. And we will be right back with our guest here in just a moment.
JASON HARTMAN: Be sure to call in to the Creating Wealth show and get your real estate investing and economics questions answered by me personally! We’d love to have you call in, share your experiences, ask your questions, and a lot of other people listening have those very same questions. So be a participant in the show! At 480-788-7823. That’s 480-788-7823. Or, anywhere in the world via Skype: JasonHartmanROI, that’s JasonHartmanROI, for return on investment. Be sure to call into the show. And we are going to enter all of the callers in a drawing for some nice prizes as well, so be sure to call into the show, and I look forward to talking with you soon.
JASON HARTMAN: It’s my pleasure to welcome Everte Farnell, and he is president of E. Farnell publishing, and a freelance copywriter, and known as America’s good news guy. And we’re going to talk to him about copywriting, and we’re going to talk especially with a little bit of focus on the financial services industry, and hedge funds, and what their advertising does to people, and some of their techniques. I think you’ll find this interesting in multiple ways. Welcome, how are you? You’re coming to us from Florida today, right?
EVERTE FARNELL: I am. I’m doing wonderfully, I appreciate you asking. During the winter months I get to tease everybody because it’s a frigid 70 degrees or something.
JASON HARTMAN: I know, it’s hot and humid, right?
EVERTE FARNELL: Right now it’s about 962 degrees outside, so everybody else gets to tease me now, so….
JASON HARTMAN: Yeah, exactly, exactly. Well, the problem with Florida is the darn humidity. It’s not even the temperature that’s really so bad, it’s just really humid there, right?
EVERTE FARNELL: Well, tell my hands that when the skin peels off on my steering wheel.
JASON HARTMAN: Yeah [LAUGHTER], yeah, I guess the heat is an issue too. Well hey, tell us a little bit about your background, and you’re a copywriter, but you’re particularly versed in the financial side of copywriting, right?
EVERTE FARNELL: I do, I do some work in the financial…the financial world, as it were. I also have—oh, I also work with small and medium sized really entrepreneurial businesses all over the country, and help them generate more sales, get better returns with their marketing dollar. The financial world—the financial newsletter world that I do a lot of work in—is a lot of fun. But, quite frankly, the entrepreneur—the regular just entrepreneurial business guy, just really needs some help in the market today.
JASON HARTMAN: So, what kind of help do they need? I mean, just getting their message out obviously, but, be specific about that, if you would.
EVERTE FARNELL: Okay. Well, really when it comes to marketing, they need help with understanding the type of marketing that helps, that works very well with their size business. And when I say their size business, I mean—for example, I used to know a guy who had a local pool business. Very successful pool business, but he had inherited it from his parents, and it was successful based on the reputation it had in the area. But he was having an incredibly tough time with marketing, because his wife had been the president of Phillip Morris in Europe—the president of their marketing division in Europe. So, she ran Phillip Morris’ marketing across Europe. Well, her marketing budget was 10 times his gross revenue. You know what I mean? There’s no way—so, she was telling him how to market, he was trying to market that way, and it was a miserable failure, because when you’re doing—when you’re an entrepreneurial business, these guys don’t have $10 million, $20 million, $30 million, $50 million to devote to a marketing campaign to try and sway the thought process of large populations of people.
They have to narrow in specifically who they’re talking about, and they have to do something that will generate direct revenue. It’s called direct response marketing. And you see it—the thing most people are familiar with is Billy Mays, screaming at you about OxiClean. That’s direct response. That’s a direct response commercial. They—it pops up, here’s a response mechanism, here’s how much it costs, call and order now. And that’s what we try to help small businesses do, so that they know that when I mail this letter, when I run this ad, I spent this much on it, I got this much in revenue, I made this much in profit. Was it a profitable ad to run, or was it not a profitable ad to run? If it was profitable, great! Keep it. If it wasn’t profitable, scratch it and move on to the next media or the next ad or, you know, etcetera, etcetera.
JASON HARTMAN: Well, tell us about the financial services industry, and are they deceiving people, in your opinion, with their advertising? And specifically hedge funds?
EVERTE FARNELL: Well, hedge funds specifically are, you know—of course, they’ve just—the advertising has just come online for them. And the rules about advertising have not changed, however the rules about who they accept—pardon me, the rules about advertising have changed, but the rules about who they can accept have not changed. So, in general, big broad umbrella, do much of the financial services advertisements mislead people? Well, I will just say this: you don’t see any of the big brokerages putting up track records in their advertisements. They talk about how wonderful they are, how trustworthy they are, how this, how that, and in general, the truth is that brokers are salespeople. Stockbrokers and financial planners are salespeople. Their job is to sell you on buying stocks and other investments through them, or in the alternative, sell you on hiring them to advise you, if they’re not taking a commission, if they’re a fee-only organization. As far as specifically to hedge funds—now, hedge funds are—that’s not dissimilar.
If you look at the industry, and now I’m not talking about specific hedge funds, but if you look at the industry, their track record is pretty abysmal. But they do a wonderful job attracting gobs and gobs of money. You know, so of course, the question is, how do they do that? Well, they do that because they’re brilliant when it comes to marketing. They’re not doing the same kind of direct response marketing that many of the newsletter businesses and the financial publishing business is doing. They’re also not doing a lot of the direct response marketing that I teach with local businesses.
But, when you’re George Soros, who rules change, you have more money, you have more influence, you have the ability to do things that smaller players can’t do. So, a lot of these places are attracting huge sums of money because people in general are looking for a wizard. The old joke in the direct marketing business—and I’m probably letting the cat out of the bag here, which I shouldn’t be doing, but—the old joke is, the people are walking around, umbilical cord in hand, looking for a new place to plug it in. And when they find a wizard, like a Soros, or some other fund manager, with whom they have something in common—it doesn’t even have to be that the fund manager is that great, but they have some kind of link in common, then they’ll often put their money in, even if it’s a losing proposition. Case in point, while it’s a very, very, very—these sorts of things happen very rarely—but case in point would be Madoff. Bernie Madoff. The Bernie Madoff scandal. He had all the credentials. He made a ton of his money off of the wealthy Jewish community around the United States.
JASON HARTMAN: Yeah, but Madoff didn’t advertise. He was just a networker, right?
EVERTE FARNELL: Right, well, and that’s how these organizations—that’s what these organizations have done in the past. But, see, there’s—advertising and marketing are two different things. So you’re right, he didn’t buy an ad in a magazine. And for the most part, the average person is not going to see a lot of hedge funds advertising in a magazine. You still have to be a certified investor, which means that you have to have a million dollars net worth between you and your spouse, not including your primary home—
JASON HARTMAN: Accredited investor—
EVERTE FARNELL: Oh, right, my apology.
JASON HARTMAN: And earn $200,000 a year in income?
EVERTE FARNELL: Right, for the last two years, with a reasonable expectation of that continuing. Or $300,000 in marital income. So it’s 200 personal, 300 marital, and yes, you’re right—I said certified instead of accredited. But yeah, so you have—I mean, they’re not going to be running ads in Time, most likely. A lot of people are not going to see advertisements from them. But what they will do is, they’re going to see marketing take place, and they will see marketing take place, and positioning, where these guys, meaning the people who are out in front of the crowd will present themselves as brilliant investors. And some of them are brilliant, and some of them not so much.
JASON HARTMAN: Yeah. I just think it’s amazing how much money Wall Street has to advertise. And all of their commercials, they hide behind the SEC. So I’ll just mention that in a couple ways. Number 1, their commercials that you see on TV are so generic, they’re just absurdly generic. They’re like, well, if you want to have a better future…and it’s kind of like these drug company commercials, as they’re listing all the terrible side effects of these drugs—you might die, you might get diarrhea, all these terrible things are going to happen to you. Splitting headaches, whatever. And they’re showing people enjoying life, and living the good life [LAUGHTER].
It’s unbelievable how contradictory it is. But these commercials on television for these investment houses are so esoteric! They’re meaningless! When I see those I say, where’s the beef? Show me your rate of return, and then when you even ask them that, they say, well I can’t mention that, because it’s SEC regulation and all this stuff. I called the SEC—I heard this name from somebody else, I can’t remember who—the Scoundrels and Encouragement Commission [LAUGHTER]. And that’s what the SEC stands for.
Because, what these advisors do, is they love being regulated, secretly. They’ll never say that—they’ll always act like it’s a big burden, and a big onerous pain in the rear end. But in reality, they love it, because it makes their job easier, and it allows them to promulgate all sorts of BS on the Republic. Whenever you ask them, show me your performance, your track record—oh well, I can’t send that over email, because it’s an SEC regulation, they’ll always say. What a bunch of crap. I don’t believe that it is. Maybe it is, who knows. But you know, it’s like, you can’t evaluate these people! They’re so squirrely! They never give you anything that you can actually sink your teeth into, in terms of numbers, or return on investment, or anything, you know?
EVERTE FARNELL: Well, and that’s why they—I mean, if you look at the ads—who was it who had Sam Waterston on—and of course, he had Law and Order fame. He came on—
JASON HARTMAN: That was Ameritrade, I think, possibly.
EVERTE FARNELL: Was it Ameritrade?
JASON HARTMAN: Maybe, I think. I could be wrong.
EVERTE FARNELL: He didn’t even say he invested with them. He just said, you know, this is—
JASON HARTMAN: And even if he said he did, what’s he gonna do, invest a thousand dollars with them? Okay. I’m an investor, I’m a client. Whooptidoo. A thousand dollars versus my couple three, four, five million a year that I earn, or maybe more, a lot more than that if he was on Law and Order. So what?
EVERTE FARNELL: And that’s what I mean when I say that what these guys do is, they work with—and I use Madoff because he’s a high profile example, not because he’s the norm. I don’t mean to suggest that these guys are involved in illegal activity. But what does happen is that you take guys—I mean, the perfect example is Buffet. Now, he is undoubtedly very successful. But there’s the Buffet premium. Now, he doesn’t actually run a hedge fund, obviously. Or even a mutual fund, or any kind of—but there’s the Buffet premium. So, companies that Berkshire own trade at a higher premium than their peers, because Buffet owns them. Well, why’s that?
Well, the only reason is because Buffet’s gotten on TV and done a brilliant job of marketing himself. He didn’t advertise, necessarily, but he marketed himself in a way that made people believe that he’s brilliant. The miracle of Omaha, and all this stuff. Now, he may not have been out there coming up with those names, but he sure as heck has done nothing to discourage their use, I promise you that. He’s brilliant the way he has done these things, and the way he has done this. And that character, that grandfatherly old man character that he puts on—that’s all, I promise you, that’s all contrived and specifically created for a reason.
Now, I’m not saying that’s a bad thing. What I am saying is, if you have money that you’re investing, you don’t want to invest it with somebody based on the image that they’re putting on on TV, or the image that they put in a magazine, or the image that they put in an advertisement. You want to invest with them based on what they’ve done in the past. You don’t want to look for a place to plug your umbilical cord. If you want to trust somebody because of their marketing, or because of their positioning, to come clean your house, well then fine. They might miss a spot on the floor. But not with your investing. That’s very, very dangerous.
JASON HARTMAN: Yeah, very good point, very good point. It’s hard to say that’s an unfair advantage though, because—I’m sure everybody in the public eye manages their image, to some extent. People even do that in social situations. They probably even do it at home with their spouse, you know? To some extent.
EVERTE FARNELL: No question about it. And I’m not beating up on Buffet. From his point of view, it’s exactly what he should be doing. He’s brilliant about it, and he’s done exactly what he should be doing. So I’m not even saying he’s doing something wrong.
JASON HARTMAN: The thing that I think is very wrong, that Warren Buffet does, is—like during the financial crisis a few years ago, he was saying, I’m buying stock in B of A, and then I think he bought some stock in Goldman Sachs, too. He went around like, backing up the government’s position, and trying to like, act like you should invest in these companies too. It’s such a bunch of crap! Because he’s an insider! He’s not buying at the same price you’re buying! And he has all sorts of special privileges and insider information…it’s just not the same game. But what they do is, they use this to influence the ordinary middle class investor, to the detriment, I’d say, of those middle class investors. So that’s the problem.
EVERTE FARNELL: Absolutely. And that’s why it’s so important that you educate yourself, and not just go with what these guys say. I mean, I’m constantly—now, part of it is just because of clients that I have, I’ve gotta stay up on the news. But I’m constantly working to learn about another piece of the market, learn about another strategy. Constantly studying some sort of economics textbook. Now you might say, that’s unrealistic, to expect people to do that in a general sense, and yes, I do have a professional motive for doing it. However, if I was investing—I mean, if this was my livelihood? I wouldn’t really be interested in learning how to invest from the brokerage company that’s investing my money, you know? I want to go find independent information, and gather information from truly independent, completely unplugged sources. And that’s really what’s missing.
Unfortunately, to the detriment of the investor, as you mentioned, they watch what Buffet does, they watch what these guys do who are, as you said—they’re insiders. And play by a whole, completely separate bit of rules. They watch what these guys do, and then they think that if they do the same thing—it’s like the advertising—it’s like the small business who thinks if, well, if I could just advertise like Phillip Morris advertises, only I’ll do it in my county instead of round the whole country. Well yeah, but you don’t have the millions and millions and millions of dollars you need to get the results that Phillip Morris can get, because like you said, they’re playing by different rules. They have different amounts of money, they’re getting different ad rates, they’re not running—they’re not paying as much as you are for the same piece of media. Etcetera, etcetera, etcetera. It’s gotta be—people have got to educate themselves, and not just look at the marketing.
JASON HARTMAN: Yeah. Well, let’s not make this all about the modern version of organized crime that I call Wall Street. But, I can tell you, if anybody listening wants to become a millionaire in the stock market, it’s really not that difficult. Just start with two million, and you’ll probably have a million left after you’re done. [LAUGHTER].
EVERTE FARNELL: [LAUGHTER] Sounds like the old Richard Branson joke…Richard Branson wrote, “If you want to make a million dollars, it’s not difficult at all. Just start with a billion, and open an airline.”
JASON HARTMAN: Exactly, exactly. The best way to become a billionaire in the airline industry is to start with two billion.
EVERTE FARNELL: Yeah, right.
JASON HARTMAN: Same with Wall Street. But hey, give some copywriting advice out for small businesspeople, or for speakers, authors, information marketers—people with any kind of small business that want to promote themselves and want to have more success. What are some of the fundamental rules of copywriting? And I guess this also begs the question, can someone do it themselves, or do they need to hire somebody.
EVERTE FARNELL: If you’re willing to put the time in—and when I say the time, it is not a difficult skill to learn, but it does take some time to get it down. But if you’re willing to put the time in, you’re far better off writing for yourself. Just because you’re gonna know your business, you’re gonna hopefully know your customers better than any copywriter is ever going to know somebody. With that said, most people won’t put the time in, unfortunately. Most entrepreneurs won’t put the time in. But if you’re willing to put the time in to do the studying and do the background and learn the skill, then you’re far better off writing for yourself.
JASON HARTMAN: Explain to us just for someone who wants to take a crack at it—what are some of the most basic skills that someone can know about copywriting?
EVERTE FARNELL: Well, the first thing is: get rid of the institutional voice. When you’re writing a piece of copy, you wwant to write it from somebody to somebody. Don’t think that your business owners—pardon me, that your market—is too sophisticated. The same ads, believe it or not—the same ads that work in the National Inquirer also work in Investor’s Business Daily. It’s not just the same gambit, I mean, the same ads in the past have worked in both areas. So your market is not too sophisticated, number one. Number two, you always have to have a headline, and the headline should be something that grabs attention. But more than grabs attention, it really touches somebody on a deep, emotional level.
So you’ve gotta understand what your market really wants on a deep, emotional level, not just what they say they want. So for example, when I’m marketing to entrepreneurs, I understand that entrepreneurs—they all say they want more money. That’s the easy one. But in reality, there’s a couple things. First, most of them got into business with the idea of getting out. They got into the business looking to sell their business, number one. Number two, they don’t want to be told what to do. They have a fiercely independent streak, normally speaking. And along those lines, they want freedom. So I know that that’s the emotion—those are the emotional keys, that if I can get that in my headline somewhere, that I’m far more likely to get their attention. So you have to have a good headline when you’re putting an ad together. And that, as a matter of fact, the standard wisdom on that is 80% of the time—pardon me, 80% of your market is going to read the headline only. 1 in 5 people are going to read the whole ad. 4 in 5 are only going to read the headline. So you really need to make the headline powerful. If you ran it by itself with a phone number, would somebody call? That’s the headline test, as it were. The other thing is a call to action. Zig Ziglar once said—and if anybody knows who Zig is—he was a great sales trainer—
JASON HARTMAN: The late, great Zig Ziglar. I went on a speaking tour with him once. We did several speaking engagements together, it was a real honor to share the platform with him. And he’s so darn funny!
EVERTE FARNELL: I never had the pleasure of meeting Zig. But fantastic, fantastic. I learned a lot from him. But he said one time that timid salespeople have skinny kids. Don’t be afraid to put a call to action, and a very clear call to action. I’ve seen people go so far—and they’re more right than wrong—go so far as to say in an advertisement or in a sales letter—stand up off your couch or wherever you’re sitting, walk over to the telephone right now. Pick up the telephone, dial this telephone number. You know, get out your credit card, put your—it sounds silly, but I’m telling you, the more specific and the stronger call to action you have—you’ll be right more than you’ll be wrong. So do whatever you feel comfortable with, and crank it up like two or three times. Chances are you’re going to get better response. So, and try and be conversational. Now of course, we have a very limited period of time, but I would say the headline, the call to action, and a conversational tone will get people a lot further than what they try to put together.
JASON HARTMAN: What about the length of copy? There’s these two schools of thought, but, it seems like the world of copywriters is this really long, long copy, and frankly, I subscribe to all these lists, and I get that stuff, and I think it’s just incredibly compelling. The problem is it’s just so darn long that I don’t read it.
EVERTE FARNELL: Well, the trick to that is called double readership path. So you want to—there’s nothing wrong at all with long copy. As a matter of fact, kind of the joke is that, would you send your salesperson out, if you have an outside salesperson—would you send your salesperson out and say, okay, you have 750 words on a sales presentation, don’t you dare say 751. I mean, it would just never happen. You go out there and say whatever you need to say. I mean obviously within boundaries of ethicals and morals and you don’t want to lie, but that goes without saying. But go out there and do whatever you need to do, and be as long as you need to be to close the sale. That said, there’s the—I came up years ago. 20 years ago I used to sell vacuum cleaners. We walked into a house one day—this isn’t a long story, I promise I won’t bore you, Jason.
But we walked into a house one day, and we were running late. I was in training, and we were running late, because we had been late on a previous call. So, we got there, we sold the previous call, we got there, the woman was there, and she was not a wealthy woman. But she drove a nice car, obviously had good credit, you could tell. And she kept a meticulous house. The house was beautiful. So, she said, you were supposed to be here an hour and a half ago. I go to bed at 9 o’clock. It’s 8:30 at night; I go to bed at 9 o’clock. You have 20 minutes, and then you have got to go, because I have work in the morning. So, the guy who I was training with—his name was Bernard. He says—he smiles, and he says okay. He gets out, he gets his baking soda out of the bag, he sprinkles it on the rug, he says, can you go get your vacuum cleaner you use for your house now? She sends her son to get the vacuum cleaner. He says, vacuum that up. The boy vacuumed it up. I say boy—he was 16, 17 years old. He vacuumed it up, and Bernard said, lick your lips. And the guy licked his lips. He said, what do you taste? He says, I taste baking powder. He says, that’s right, you taste baking powder.
But what you don’t taste that’s all over your lips too is everything that was on that carpet, everything that got tracked inside, everything that—all the dirt, all the grime, everything that was on that carpet is now on your lips too, because it spit out of the bag. The boy looked at his, turned green, ran to the bathroom, and threw up. And the woman said, do you take payments? That’s double readership path. We had a two-hour presentation, but we had to condense it down to a very short period of time. We did it, and got the sale. And that’s what you have to do with the sales letter. You have to have a double readership path. So you have the whole thing where it’s laid out, where if somebody reads it—if they’re an engineer type personality and they read everything, fine. But if they read the headlines, read the subheads, and read the PS’s, they should be able to get it.
JASON HARTMAN: So in other words, the theory is that double readership, because you write long copy but you also make highlights to where someone who won’t read the long copy can simply skim and hopefully you catch them as well. So you get both, the best of both worlds.
EVERTE FARNELL: Exactly.
JASON HARTMAN: Okay. One more tip, and then let’s wrap up.
EVERTE FARNELL: Okay, the PS is the second most read part of a sales letter. So, if you’re going to spend your time—a lot of time on the headline, and a lot of time on the PS. You want the PS to create curiosity so the person will hopefully go back and read through the sales letter to try and find whatever you mentioned in the PS. So, you don’t want to give prices, you don’t want to give anything away in the PS. You just want to allude to something that will create a level of curiosity so that you can hopefully get the person to go back and read the letter.
JASON HARTMAN: Yeah, good. Good. So, those are some good tips. Well, what else would you like people to know in closing, just to wrap this up? And please give out your website too.
EVERTE FARNELL: Okay. Well, just that things are—you know, it’s trite, but what’s going on in the White House is a lot less important than what’s going on in your house. In the Great Depression, people became millionaires by selling air conditioners. There’s still plenty of money going around. Yes, it’s not 2007 anymore, 2006 anymore. Money’s not flowing uphill, and you have to work for it. That’s fine. But there’s still good news to be had, and there’s still plenty of money out there. So don’t throw in the towel. And my website is, they can find me at—actually you know what, probably the best would be Copywriter In A Kilt. I wear a kilt a lot. And what that’ll do is that’ll take them directly to my Facebook page, where they can like me, and they can get all the information—how to contact me, and everything. The other one would be www.evertefarnell.com. And I’ll spell it phonetically very quickly, because I know we’re short on time, so I appreciate you running a little over with me, Jason. But, it’s echo victor echo, Romeo tango echo, foxtrot alpha Romeo, November echo, Lima, Lima. So it’s www.evertefarnell.com, or Copywriter In A Kilt. And ‘writer’ is spelled with a ‘w.’
JASON HARTMAN: Good stuff. Well hey, thank you so much for joining us today. And I learned some good lessons. Number one, stay away from Wall Street—I already knew that one. But, I learned that one the hard way a couple of times in my life. And some good tips about attracting more customers, and new business, and certainly I share your optimism—there’s a ton of money floating around in the world. All people need to do is get a little piece of it. So, there are definitely customers out there, regardless of the economic times in which you find yourself. So, thanks again for joining us today!
EVERTE FARNELL: Thank you, I appreciate it.
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Transcribed by David
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Episode: CW 349: Professional Copywriting & Deceptive Hedge Fund Advertising with Everte Farnell President of 9 World’s Publishing
Guest: Everte Farnell
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