Enlightened Capitalism

Essays about how to harness people's natural desire to create wealth and improve their quality of life to solve global problems such as war and poverty.

Monday, August 08, 2005

Seek and you shall find

I am very good at finding things.

Let's say mom has misplaced her car keys again. Normally, we would "look for" the keys; that is, we look at an object and compare it to our mental picture of "mom's keys". If it matches, Eureka! If not, look at another object, and so on.

The problem with this approach is there are too many objects. A spoon is an object, a fork is an object, and a fork and spoon stacked together make a third object. Lumps in the upholstery are objects, pictures in the newspaper are objects. A fire in the fireplace will cast shadows on the wall creating millions of fleeting objects. This is why the "looking for" method often seems kind of endless and hopeless.

Elimination, on the other hand, is the opposite of "looking for" the keys. I know how big the keys are, and I have an idea where they might be, so I start in the most likely places, and prove that the keys are not there. Rather than "looking for" the keys in mom's purse, I prove to myself that the purse is key-free. Same with on the table, on or in the sofa, on the family room floor, in the entrance hall closet. Sometimes this can seem ridiculous, probing and shaking old shoes and such to prove the keys are not in there, but it's quick and guaranteed to work. The best part is that after eliminating a room, I no longer have any interest in looking there. If I eliminate the whole house, I am confident the keys are not at home, and I can proceed to check the grocery store, grandma's house, or wherever mom could have left her keys recently. In the positive "look for" approach, I'm always wondering, perhaps the keys might still be there, hidden.

This same principle works when seeking jobs, dates, apartments, investment opportunities, or anything else that can be hard to find. Here's how I apply it to real estate.

Assume that a great deal on real estate could be anywhere. By "great deal" I mean a great property at a great price which I can afford. I start by eliminating all the places that are too expensive. Then I eliminate the places that are too cold, too hot, too dark, too sparse, too polluted, too dangerous, too dilapidated. What I am left with are great deals. If my criteria are too stringent and no place on Earth qualifies, then I can relax my criteria and try again, confident that there is no deal available which is THAT great. With this approach I will identify the best deals available.

Compare that with the normal method, looking at deal after deal in search of a good one. Not only does it take longer, but when I find a good deal by the "look for" method, I am not sure how good it is, relative to what's available.

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