The Value of Land

The value of land depends partly on its natural beauty and climate, partly on reputation, but mostly on the behavior of the people there.

The most expensive land is office space in places like Hong Kong, London, and New York City. The reason those offices are so valuable, compared to an equally lavish office 50 miles outside the city, is because the people around those offices buzz about in a way that is particularly advantageous for closing a high volume of high value business deals, and which provides a convenient and pleasant atmosphere for closing the deals.

A person who wants to run a certain kind of business can make exorbitantly more money by running it in that exact location, which explains the exorbitant price tag.

In some cases a place has a fancy reputation, like Rodeo Drive in Los Angeles, and some people will pay exorbitant prices just to have that address.

And in some cases a place has incredible natural beauty, like Waikiki, or Yosemite Valley, and people will buy land there just to camp there and enjoy the view. They might not need anyone to do anything for them in that case.

But 99.9% of the time, the value of land depends on the behavior of the neighbors.

The bad news is that the neighbors are free to choose how they behave, so the value of your land is partly out of your control. The good news is that people, and especially groups of people, are somewhat predictable, particularly in the specific circumstances studied by economists and social psychologists.

So, if we can figure out which behaviors of our neighbors make our land more valuable, and what we can do to cause those behaviors, then we can actually increase the value of our land.

And if we can figure out what causes people to change their behavior, and either do that or find out when and where it is being done, then we can predict where the real estate is going to rise or fall in value.

This is valuable information to an investor. It might also be valuable to a society. With that knowledge, a government could actually legislate economic prosperity. That would be cool, especially in places like Liberia.

So what are the behaviors that raise the value of real estate? One is opening lots of small shops, restaurants, and bakeries all within walking distance of one another other, and keeping these areas clean and free of disturbance.

Another is neighbors talking to one another about common issues, and attending civic meetings and functions in significant numbers.

Another is parents volunteering at their kids' schools and paying close attention to the quality of the education.

Another is planting trees, adding speed bumps or closing off streets, and beautifying the buildings, streets, and parks. When a community puts in large beautiful monuments such as fountains, museums, and memorials, with shady benches to sit on, it is behaving like Paris, or Boston. This tends to raise land values.

In general, when a community behaves the way the most expensive communities do, then the land tends to get expensive.

Some of those behaviors don't seem that difficult to incite. The interesting question is "What is the simplest, fastest, and most inexpensive way to incite a community to behave in such a way that the value of land doubles?"

How to get humanity to the next level

My philosophy is as follows.

1. Sufficient raw material & energy & infrastructure & technology is available to create world peace, plus a drastic reduction in violence, disease, poverty, and crime, and a drastic increase in people's quality of life (i.e. fun, happiness, health, and creative output).

2. The reason the huge gains in global quality of life haven't occurred yet has to do with inertia in our political, economic, communications, and education systems.

3. The way to overcome this inertia, and get humanity to the next level, is to look for tipping points, or areas of high social leverage, i.e. little actions that can cause big changes.

4. The key to success is accurate comparison of cause/effect relationships, e.g. being able to predict what will happen if $1 is spent here, or here, or over here. If the model covers a wide range of causes and effects (like all the available properties one could buy, and all the possible renovation projects one could perform on those properties) then a supercharged sequence of events can be developed, yielding massive results.

5. The parameters to pay most attention to are
a) cashflow (i.e. activities that return investment quickly)
b) fun (i.e. activities worth doing for their own sake)
c) the pied piper effect (i.e. activities others will want to copy)

6. Designing and running the experiments that yield this information (i.e. which activities will have the biggest impact, fastest) is the number 1 priority for humanity.

7. Let's do it! In addition to an experiment designer (which could be me or you or anyone with a scientific mind), we need a team of 1 webscraper programmer, 1 statistician, 1 field manager, and 2-10 field workers.

Non-profits could be For-profits

Much of the best work going on in the world is being done by nonprofit companies.

My question is, can people make money doing that work?

In general, employees of nonprofit companies get paid. The only difference is that the people supplying the money don't expect their money back, or a return on investment.

Why not? In some cases, the work itself is donated to poor people. But I am wondering if this is the best way to help people. Maybe charging them money would cause us to address the reasons behind why they "need help" in the first place.

I used to think that working without profit was somehow more noble than working for money. Now I think money is a good thing and trade is healthy.

The One Minute Millionaire

I just read "The One Minute Millionaire" by Mark Hansen and Robert Allen.

The book is bursting with valuable ideas and insights, and I recommend it to everyone.

I have the following suggestions to the authors on how to improve it. First of all, it is really two books, and the gimmick of alternating pages seems awkward and a waste of paper. Print the stories one after the other (or even better, in two separate volumes).

[The rest of my comments are about the left side, i.e. the nonfiction how-to book.]

First of all, it feels a little scattered and disorganised, and toward the end a bit repetitive. Create an outline and sort things under topic headings to give it a stronger sense of beggining, middle, and end.

Regarding the title, the tie-in with the "One Minute Manager" and other such books is a clever idea. However, don't get carried away. You can't make a million dollars in one minute per day.

Even if you spent this one minute meditating, or scratching lottery tickets, or cold calling billionaires, making $1 million takes more than one minute. You have to pay the phone bill, set up your computer, open your mail, and do hundreds of other things for your one minute of highly focused work to pay off. Granted, your point is that ordinary people can add a small amount of focused activity to their daily routine, with million dollar results. But this strategy will fail if they stop doing some of the things they are already doing which take more than a minute per day. And some of the things you recommend take hours and hours. Which is fine. Your message would be clearer if you skipped the part about making $1 million in one minute per day.

Your example of making $24,000 in 24 hours is misleading at best. It took you years to create the material and develop the relationships which allowed you to do that. Besides, that might not have even been a good deal for someone in your situation. Why does Disney release only one classic video at a time, for a premium price, when they could indeed make millions in minutes by offering all their intellectual property simultaneously at a deep discount? Or, in other words, why don't you continue running that program and make $24,000 every 24 hours?

The concept of the enlightened millionaire also needs a little work, in order to achieve congruence. You advise people to invest in mutual funds, without making sure that those investments are really making the world a better place. Does every company in your portfolio act in alignment with your principles? We investors are financing these activities, and it is our responsibility to see that our money is not working at cross purposes with us.

Most of your real estate advice is excellent. But does it really match your principles? You advise people to seek out sellers who are forced to liquidate due to the need for immediate cash. What would you advise these sellers to do? Does your advice work when everyone follows it?

Please don't take any of this criticism personally. I enjoyed the book and recommend it (I bought nine copies already, to give away). I see your commitment to helping people live in abundance and possibility. I am committed to that too. Please accept these suggestions in that context.

And check out my blog www.enlightenedcapitalism.blogspot.com
and my company www.affinityneighborhoods.com