Hey there. I'm Jonathan Tonge from Toronto, Canada. If you are visiting this page, it might be because your last name is Tonge or you received an email from me at tonge.com.

So where did the last name Tonge come from? Some say it is geographical in nature, having come from a tongue of land or peninsula. Others say it is derived from the Olde English pre 7th century "tong" which refers to a fork in a road or river. Some also theorize that it refers to a man of speech.

Our lineage has been linked to the Vikings who landed in what would be England in the eighth century. However, it was not until the Norman Conquest in 1066 and the initial rule of England that the Anglo-Norman family name Tonge was founded in Yorkshire. Here in Yorkshire we Tonges held a family seat as Lords of the Manor of Manningham which emerged in that shire before the 12th century and becoming more established at Manningham by the 15th century.

In the 18th century, challenges in England and opportunity overseas brought the Tonges to the New World. Many of us went on to make important contributions to early emerging nations such as Canada and the United States.

For instance Joshua Tonge U.E. settled in St. Mary's Bay in Nova Scotia circa 1784 where he served the Loyalist Regiment. Interestingly, my great great grandmother told my father that our lineage also descends from Sir Admiral Rodney of the British Navy best known for his acts in the American War of Independence. That puts our family back at least 83 years before Canada was founded. Another early settler, Connise Tonge landed in Virginia in 1666, 110 years before the United States was a country. Other places settled included New York City, Colorado and Aukland, NZ.

Here in Canada, us Tonges have spread from Nova Scotia to Quebec then to Ontario (and Alberta). The Tonges have a proud history that shows us exploring and establishing new worlds. I am leading the Tonges into building a new digital world and I hope that same spirit survives in the next frontier including space, Moon and Mars.

Ford GT used with permission from Ford / Team Detroit but is not an endorsement.
The Tonge family patented coat of arms depicts six marletts (swallows). Earliest documented use is in 1513, but may have been established centuries prior.

Tonge is a township about 50km outside of downtown London (see on map). It is thought that Tonges gave name to this place, as Elizabeth 43rd was in love with a gent named Christopher Tonge.
Tonge Fold is located just outside of Manchester in Bolton (see on map). The River Tonge marks one of its boundaries.

Tonge Hall is a Grade II Elizabethan manor house in Tonge, Greater Manchester, England and was built by the Tonge family in 1584. The magnificient two-storey tudor mansion stands 432 years later, although in 2007 it fell victim to arson and is now being restored.
The other half of my lineage stems from Broadhurst. My late grandfather Edwin Broadhurst was a designated British Aeronautical Engineer who designed the first airplane seatbelts and luggage carriers in England in the 1950s. In the 60s he and his young family immigrated to Canada to work with Canatom and engineer the massive hangar doors that can seal a nuclear reactor off for thousands of years in the event of a meltdown. Canada has since had a reputation for having the safest reactors in the world, potentially avoiding global catastophes such as what we are experiencing with Japan or Ukraine.

I am outside Communitech / Google in Kitchener, Ontario

North American Tech Tour

May 22, 2016

Hey Tonges. Anyone familiar with the talent in the Kitchener-Waterloo ecosystem knows it's awesome. The small city has created BlackBerry, OpenText, Desire2Learn and hundreds of other succesful tech companies. But it's great to see people from the outside recognizing it to. Today Paul Singh from 500 startups came to Kitchener on his North American Tech Tour.

Paul Singh is incredibly resourceful. Apparently his Airstream was modified for this tour as well as his F-150 pickup, whose suspension can take a 8 foot drop. Paul also has a popular newsletter that I read and you can subscribe to it at resultsjunkies.com

Paul was fielding questions from entrepreneurs over coffee and donuts. I listened to him as he spoke to other founders. The most important message that he shared was that when you ask for investment, make sure you can spell out how the investor will get their money back with a return. Specifically how your next round will be at a higher valuation. That is key to venture capitalists. Entrepreneurs are often too focused on their own interests such as the technical or sales aspects of their product. You don't have a crystal ball and the risks are high, but an intelligent convincing plan will let them know that your goals are aligned and increase your odds of attracting capital.

In Silicon Valley successful startups understand that you need to reach out to many investors, similar to a job search or sales. Here in the much smaller VC ecosystem of Kitchener we are often unaware of just how many investors there are internationally. Entrepreneurs often give up after contacting a few poorly targetted individuals or they sit and wait after making contact with an ideal investor. Warm leads deserve nuturing but they should be no reason to pause. Investors may be polite and encouraging but are often too busy to evaluate your business seriously, especially to a deal that has no other investors chasing it. Discover which investors are actively investing in your space at your company stage and industry. Then set up an investor funnel and track your leads. If you don't have a serious approach or can't afford the resources to seriously go after investment, then you are significantly less likely to be successful.

Keep in mind that no investor will give you their money if they don't like or trust you. Be professional but personable as well. It is common for entrepreneurs to entice investors by making their deal look hot. They often bounce interest from one investor off of another to try to steam roll a deal. Experienced investors know your game. The investment community is often tight-knit and cheaters are called out. It's great to try to build momentum, but work hard enough to ensure that it is true. And never bluff to get a deal because you might be thought of as dishonest or misleading if nothing comes through!

The lesson? At the end of the day, going after investment sounds alot like how we structure marketing and scale sales. And yes, just like you can document your sales process, you can establish a formal investment process. With a process and your expectations aligned, you are free from the emotional baggage of feeling failure from rejection. Noone has rejected you. They're just not that interested enough to respond. That's life for everyone. Make sure you're talking to the right person at the right time and make your pitch interesting. This reminds me, people love stories and a good story needs conflict ;) ;).

Other than amazing coffee and high-end donuts, the day was full of meeting people and was later followed by a fantastic dinner buffet and presentation by some successful founders from larger companies such as Sandvine and FreshBooks. How spoiled are we?

I also had the opportunity to meet a mother entrepreneur and her daughter and show them around Communitech, one of Canada's most recognized innovation hubs. I think by the end of the day, everyone was very impressed with what is going in this city. Thank you to Paul and Communitech for making this great day happen!

My Journey as an Entrepreneur since 2011

October 25, 2016

In 2010 I was leading digital integration and product management at one of Canada's largest media companies. There we were charged with transitioning the company over to digital revenue. I really liked the leadership, people and our mission. However being an employee is similar to being in a zoo. You are provided with work and money, but in a structured environment you do not have the ability to independently conceive and build. This is a path that some creators need to take to find out who they are and what they are capable of, no matter where they end up down the road. I resigned from a great position to find my place in the wild.

SilverBuyer

SilverBuyer was the first business that I launched as a full-time entrepreneur. I got in when silver was still cheap and with no money invested I rode the bubble. Within six months, I was consistently earning over $13,000 per week and growing 25% weekly. Sounds like a banner ad for some scam, but it was true and I was considering franchising it. Unfortunately the silver bubble popped. With my bank topped up, I decided immediately to move on to my next project.

One of the greatest lessons from SilverBuyer was to look for channels that are less competitive. I found ways to find and buy silver beyond the website. That's where I made most of my money.

STORYFIRE Inc. (SF)

StoryFire was in the makings as early as 2012, but we didn't get it going full-time until 2013. StoryFire was a creative video agency that I designed with two other founders. We worked on a number of amazing projects. Some highlights include winning a competitive RFP process with Tourism Toronto and University of Toronto for creative video needs for World Pride.

UNIVERSE Inc.

After StoryFire I was sure that while co-founders can be great, they are also a big reason why companies fail. My goal was to be in digital technology anyways and this time I would be a single founder. This is usually not recommended because as Paul Graham says "a tech business is too much work". I had also read the Startup Genome Report which reported that it takes 3.6x longer on average to reach scale.

As a strategic move, I had been trying to get space at Communitech to found my next business. When I heard BlackBerry was taking applications for a couple startups to receive space where their BlackBerry Jams' were once held, I was stoked. I made my interest known and got in! There next to BlackBerry, Google, Desire2Learn, Christie Digital and many other leading brands, UNIVERSE was founded.

Around the same time I had applied for VP of Marketing at a rapidly growing home builder. I made it a few interviews in, but I should have prepared more for the final interview. A few weeks later I booked a meeting with the CEO who I had previously interviewed with. In the meeting he reviewed the demos and provided insight. I think as an entrepreneur himself, he appreciated the fact that I had the guts to turn this into a sales opportunity.

We aced that first project and then took the work and sold four other builders, including a Fortune-1000 company who is the largest luxury home builder in the world. Working with their corporate architecture team in Pennsylvania, we completed our first project for a development in Palm Springs, California. Our primary contact there reported that they were the best 3D interiors they've had. It's quite a complicated process to model new homes and developments because of the exact requirements including overall style, custom furniture, finishings, fixtures and surrounding environments. But in order to innovate and create new media around 3D, you need to own the 3D process. In January of 2016 I developed interactive 3D floor and site plans. We also created high-quality photorealistic exterior stills to demo, which turned out amazing. At this point I thought for sure that we'd done it. The demos brought in requests for proposals worth over a million dollars in the first half of 2016 alone.

MapSpot.com

I have been an advocate for using interactive vectors on the web for many years now. I remember when you zoomed a vector in Google Chrome, it would flicker beyond its container. I actually worked virtually with Paul Irish there to resimulate the issue to get it fixed. Not alot of people had used vectors in powerful ways, let alone on the web.

MapSpot is an early-stage framework for making vectors interactive for next generation web interfaces. This technology can be leveraged to create interactive site plans for new homes, so it has synergy with what I am doing.

In mid-2014 I reached out to John Tory's team to create an interactive map of his proposed $8 billion light rail line called SmartTrack. I like John Tory because he was CEO of Rogers and that fits in with my media background. I found his team to be very professional, honest, trusting and supportive. What a positive change for Toronto! After getting a work order I spent three weeks designing, coding and launching the map to the media as part of a well publicized SmartTrack campaign.

SmartTrack became known as one of the most successfully-marketed capital project plans in recent election history. An Innovation Fellow for the UN used SmartTracker as the primary example of how transit innovation helped John Tory win the Toronto mayoral election. We talked about what was important to Torontonians which is transit times. If you don't know, Toronto has some of the longest commute times in the world at 65.6-80 minutes seriously impacting our quality of life. To add to the congestion, both Lakeshore and Gardiner Expressway were closed that year so marketing with transit was a sure bet.

NewHomeFinder (NHF)

Building a trivial website like this one or SmartTracker is fun. But building a large scale database-driven site is a significant amount of work. NewHomeFinder was more work than StoryFire, UNIVERSE and SilverBuyer combined!

I completely underestimated the amount of work that NewHomeFinder would require. The goals of NewHomeFinder are to provide compelling articles and content that help new home buyers find a new home and outrank other new home platforms in search. Strategically it is a necessary product to achieve the vision of selling new homes online. NewHomeFinder has only been tested in my home market, but it has done all of the above. It consistently is the first site listed (after the official site) if you search for a specific development by a specific builder. It also is on the first page of google for searches such as "New homes in Guelph." It draws thousands of high-value home buyers every month at no cost.

How I Just Fought a "Disobey Stop Sign" and Won

October 30, 2016

On August 30th I went to one of my favourite provincial parks with family to go camping. The campgrounds are a long drive from the front gates of the park. At a major intersection, I was pulled over by the Warden for "Disobey Stop Sign." I felt I had come to a complete stop albeit for only a moment. More importantly I felt that the Warden could not determine beyond a reasonable doubt that I didn't stop. In fact he said I blew through the intersection, which was most definitely not the case.

As you can imagine I was disapointed to get a ticket on the first day of camping! I have a clean driving record and was concerned about its impact both on my insurance and the time and stress to fight it.

Back home I did some research about tickets. 90% of people don't fight tickets. Most said that fighting a fail to stop was near impossible. If it comes down to the officer's word and yours, the Crown will see the officer as the more credible witness. For me it also meant a 2-hour drive to Sarnia which is where the court house would be located. However I wanted to fight it so I checked the box on the back of the ticket to plead not guilty.

It was a surprise when two weeks later I received my trial notice in the mail with a court date set in just three weeks on October 27th. On the 20th of October I requested disclosure by regular post mail. On the day of the trial the Prosecutor had the disclosure ready for me and then asked if I would like a resolution.

As I found out they pretty much offer anyone who fights a ticket a resolution. A resolution is a reduced offence or fine in return for a guilty plea without a trial. There were about fifty resolutions on the day of my trial. The court prefers you to take a resolution because trials can take an hour each and they don't want to be in court all day. I was actually the only one who went to trial. You can hire an agent to take a resolution for you so you don't have to even show up on your court date.

Unfortunately with a "Disobey Stop Sign" the Prosecutor was limited in what resolution he could offer. He said he could reduce it to "Disobey Sign" which carried one less demerit point and was only $80 (vs $110). That didn't sell me and I explained I would be going to trial. He let me know he would be in the court room if I changed my mind.

The court opened at 10am and I went in to sit amongst the officers, agents and people who were fighting tickets. I was dressed in a nice suit and tie to show that I was serious and that I took the court seriously. Most people were dressed poorly. However they all took resolutions so it didn't really matter. I was ready for a trial.

It was not until 1pm that I had my trial. I was the first trial of the day. The Worship (judge) explained how the trial process worked. She then offered me an adjournment when she discovered that I had only received disclosure this morning. I kindly explained that it was too much work to get down here again. I requested a 'stay' but she explained that was reserved when the disclosure process fails completely. I had reviewed the disclosure while waiting and found the parts that strengthened my case. I requested that we move ahead with the trial.

The Warden who issued me my ticket took the stand. The Prosecutor and Worship asked him questions to get all the facts clear about the case. They asked me if he could review his notes which I was fine with. Some people make it difficult with the courts, sending in hard-to-complete disclosure requests, denying the officer to read his notes, etc. However, if you play hardball on a minor offence, I would bet the court will play it back. I was being respectful and kind and I feel that court and everyone there reciprocated that back to me.

It was now my turn to question the Warden who was on the stand. Just after getting the ticket in August I took photos from all angles of the intersection. I printed those photos off and brought in images from Google maps. Generally I made a statement and then framed it as a question. So for instance, I would say "The Park was at 95% capacity that day and the parking lot obstructing your view looked like this photo, would you agree?"

In the disclosure it referred to the large white SUV that completely obstructed his view of the intersection and my car at the stop sign. He said he saw my wheels go underneath the vehicle as I passed it on its far side. But when challenged on the full parking lot, trees and hydro poles in the way, it weakened his case. I also asked him how fast did I enter from behind the vehicle, which he didn't know.

This is my car.
I explained to the court that my car is a hybrid that has an electric motor that can generate 150 pounds of torque instantly. Actually, I framed it as a question: "Are you aware of how a hybrid works?" I'm not sure how much faster it accelerates, but bringing up that it was a hybrid made the court understand that my car is different. Even though my sedan is the same size as its non-hybrid version, it reinforced that my car was smaller than this white SUV. I also wanted to communicate that I am a responsible citizen.

I took the stand next. The Prosecutor then asked me questions and challenged me on whether the right lane was marked, which it was not. In my closing statement I reinforced that I have a clean record, that I did stop, and that the Warden was unable to determine that I did not stop. In the end the Worship said that there was reasonable doubt in my case and dismissed the ticket completely. I shook the Wardens hand, thanked him for his great park, and then left the court room. It felt amazing! What a great moment. The Pinery offers camping on Lake Huron with amazing swimming and breathtaking sunsets just two hours from Toronto near Grand Bend.

HTML5: Zoom and Pan with Transform-Origin

October 21, 2016

A little over 2 years ago Chris Coyier from the world's most popular web blog CSS-Tricks.com offered to pay me to write a guest article on how to use transform scale to zoom an image and transform-origin to pan it. I was honored but at the time I had two business partners and was focused on a new business. I thought I'd share this technique as zoom functionality is important to many websites and who doesn't want simplicity and hardware acceleration for buttery smooth animations? Warning. There is some basic JavaScript, CSS and HTML involved.


The code itself might seem long for this forum and instead of going through it line by line, I'll tell you how it works so you can code it up on your end. My plan is to get it up on GitHub so it can be polished and incorporated into other libraries.

The HTML is very simple. <div><img src="image.png"></div> The div has overflow hidden set, so when you use scale the image, it enlarges without expanding beyond its container.

After being zoomed, we need to be able to pan the image left to right and up and down so we can view the area that we are interested in. Transform-origin specifies to the browser at what point in that image do we scale from. If your origin is set to 50% 50%, you are scaling the image from the center. However if your origin is set to 100% 100%, than you are scaling your image from the bottom right corner. With that principle in mind, you can see that by adjusting the origin to mouse or touch movements, you can use it to pan or swipe an image in any direction.

So now you just need to figure out how to calculate the origin based on input events. To do this you take the X and Y changes in the mouse or touch event and then change the transform origin accordingly. You can do a 1 to 1 where the object pans at the same rate as the touch event, or often I like to save users time by amplifying their movements about 2 to 1. move_x = ( ( distX / ( screen_width * 0.8 ) ) / curScale ) * 200. Limit transform origin to 0 to 100% and your image won't go out of bounds.

One of the beauties of using transform-origin to pan an image is that you don't have to make any calculations when zooming. It will continue to zoom in on the exact point that is in focus without any further calculations.

The UNIVERSE where E=MT2

November 2, 2016

Copyright 2016 UNIV-ERSE Inc. All rights reserved.

Would you agree that what you sense is "when matter released energy?" Think about it. You are seeing and feeling energy. Energy released by matter. You can't see the matter. You can only sense the energy it releases. As time progresses, what's around you will evolve due to the interaction of matter and energy. However the sensory experience of this world will be entirely made up of energy.

We sense free energy like photons in time after they are released from matter. But how do we know light is travelling across a distance in the same way as we think of matter travelling? Noone has ever measured energy or matter on its own. There could be a reason for that. Only matter can detect waves of energy. Only energy can detect matter. Do the two only exist together?

What if light does not travel? That is saying 'the speed of light' is grossly invalid. What if the distance between two objects is time? Distance = Time. Something that is far away from you is in a different time. Rather than light 'travelling', time passes. 300,000 km is one second. E does not equal MC2. E = MT2 where T is the constant time of the universe. Energy, matter and time, all in one formula. The only difference is rather than per second, it's 300,000 km equals one second. Since we'd also have to redefine the newton and joule to reflect this new assumption, the equation would hold.

Without energy, you wouldn't sense matter. Without matter, you wouldn't sense energy. Without time, you wouldn't sense either. Energy, matter and time are interdependent and only exist together in the fourth dimension.

Thinking of the universe in these terms produces some further thoughts:

  • Matter is bound to time, but seeks to destroy it
  • Free energy is not bound to time, but seeks to create it
  • Free energy and matter wrestle and are converted to captured energy. This process creates the fourth dimension.
  • The Big Bang was the start of time. All free energy remains at that point.
  • Gravity tries to bring captured energy into the same time
  • A wave might have to do with the creation of time vs 'travel'.
  • Seconds of Time =  joules / kgs   300,000,000

Einstein said that light is everywhere in the universe all at once. If all energy is at a single point than it makes sense. He also said if matter could move at the speed of light, you would not age. If distance is time, than that makes sense too. Perhaps this is also why the universe is expanding. Time is expanding. Time as distance also explains the so-called "singularity" before the Big Bang.

As humans we think of distance as the physical measurement between matter, versus the time between us. Is not a distant galaxy far away because it takes a long time to get there? We even refer to it as light years! Have we underestimated time as just some fourth dimension, when in truth the first, second and third dimensions are all time as well? E=MT2 makes sense.

Think about it once more. You've never seen matter. All you've ever seen and felt was energy. Energy at a point in time. Energy released by matter. Would you agree to each of those? They exist together. Yet you walk around everday thinking it's all just matter and distance is only meters and feet.

We've made assumptions that work in our society but result in putting blinders on us scientifically and philosophically. Then we apply the concept of speed to free energy, even though it doesn't make sense. Only when energy is captured by matter at a point in time does speed apply. Or in other words, only in the fourth dimension does speed apply. The space between us all may in fact be time.

Testing with a Black Hole

I'll try to apply this theory to explain a black hole. Physicists describe their theory that everything that goes into a black hole ends up at a single point where nothing exits past the event horizon. It could be that a black hole contains a large amount of matter where all its captured energy has left. As a result time does not exist (E=MT2), explaining why it is a single point (distance is time). Matter however is still bound to time, so you would expect to see a black hole in the first three dimensions. This is compared to free energy that does not exist in the first three dimensions. As time does not exist at the centre point of a black hole, free energy can never get to the matter to rekindle the fourth dimension. This process eats time around it as energy is released but not recaptured. However the black hole would not have any mass. Only objects in the fourth dimension have mass. 1kg is an object where one newton of force will acclerate it 1m/s2. Time, mass and free energy exist together.

Why Matter Can't Travel at Accelerate to the Speed of Light Time

Einstein said that matter could not travel as fast as light because its mass would become infinitely heavy. Some have trouble understanding how that works. However if distance is time, than this becomes easily explainable. The reason is acceleration.

Let's say you were going 90% as fast as time through time. Time would slow to 1/10th the rate. Now to accelerate it would require accelerating ten times as fast just to get the same acceleration you had at 0/km/hr.

At 50% the rate of time, it would only require twice the acceleration to achieve the same increase in speed. At 83%, it requires 5x more acceleration. But at 99.9% the rate of time, it requires 999x more acceleration. As your speed approaches the rate of time, it would require you to accelerate infinitely faster just to achieve the same increase in speed.

The key to time travel and exploring cosmic space is to avoid the acceleration. If you don't need to accelerate, you could go as fast as time and maybe even faster. Perhaps the key is to seperate matter and energy and then recombine it back the next instant, of course at your final destination. Or perhaps there is a way to create millions of miniscule increases in speed without using acceleration.

If matter were to travel at the rate of time, time would stop. As time is distance you would then exist at a single point. You might form a black hole. As you travel you would slice through space, suns and planets unscathed, since time relative to those objects has stopped. As long as time has stopped, nothing will be able to reach you. You will slice through just as you can imagine a single point would be able to go through anything.

Decisions

Life is the only matter we are aware of that can harness energy so it can make decisions over time. Is that a coincidence? Energy, Matter and Time define life. The three together create reality. Indeed E=MT2 would be a game changer for religion. What I love about this theoretical time universe is that it points out exactly why life is very special. The universe is a reality to make decisions in.

"It's not where you are or what you have. It's the decisions you make that count."

Particles, fields, bosons, fermions and what's energy & matter?

This thought experiment is to see the universe where distance is time and that light does not travel. Time passes. One thing to note is that physics has become more sophisticated and somewhat more pretentious than the days of Einstein. Some have taken ownership of the definitions of matter and energy, and physcists speak more in terms of fields, particles and more. I understand the importance of aligning definitions, but I believe talking in complex terms is not a good place to start if you are challenging the basic concepts. It can make thinking outside the box difficult. For those who consider themselves experts, they are more likely to accept the basics as truth. History has shown over and over across all disciplines that this is where things can go wrong. Innovation comes from new ideas and concepts. We once thought the earth was flat. Would you need to prove gravity to question if the world is round? If so, the earth may have remained flat. However I fear not the scorn. I hope to test this theory over time to see how it stacks up against the current science and observations, which themselves, don't always align.

Here are the basic definitions for now. Matter is something that is bound to time, whereas free energy refers to something that is not bound to time. Captured energy is where matter and energy have combined to become an object and in doing so, create the fourth dimension (E=MT2). Fields, like gravity, may be something that can operate in time to bring things into the same or different times or even to record their place in time. Also distance represents a time difference in our reality, not a speed. That is something that is 300,000 km away from you, is one second away. It's not necessarily a before or after.




Inflation Targetting using Interest Rates

October 24, 2016

Toronto 2006 from my terrace on Queens Quay near Spadina. Hundreds of condos have already been built west of this location.


One of the most important calculations in the accounting world is net present value, also referred to as the NPV. You don't need to be a designated accountant like myself to use it - everyone with a business education should have a firm understanding of NPV.

NPV is measured by taking the discounted future value plus all discounted cash flows minus the initial investment. In a high interest rate environment, your future value is going to be very low. So will distant cash flows from rent or farming in say twenty years from now. But when the central banks set interest rates below inflation and the cost of capital drops, the future value and future cash flows on assets become increasingly valuable.

It is also why when real interest rates have a sustained rising, you should stay clear from any investments in land in increasingly dense areas or anywhere where long-term speculation is high as land prices are at risk of correcting.

Central banks have taken control of our economy creating interest rates that are often different than what would freely exist in a capitalist market to ensure price stability. It's there new macroeconomic model. They've been targetting inflation with interest rates since the early eighties and 'perfected' it in the 90's spreading to 37 countries.


I don't think it is a coincidence that debt levels and bubbles exploded in this new interest rate era. People might temporarily feel like central bankers are increasing wealth. But when you measure earnings per dollar of asset value, you can see that central bankers encourage people to borrow more during deflationary periods and subsequently triggering a market crash in assets when inflation heats up.

The debt however continues to accumulate. And the central banks now are resorting to unconventional policies to keep the debt binge going. Is it too soon to declare a victory in inflation-targetting? Credit continues to grow, but at some point, that growth must end. What happens in this credit-deflationary period? Let's remember that these are the same guys who were 'controlling the money supply' to target inflation in the 1970s, which they abandoned in the early 80s.

Inflation-targetting using interest rates destroys wealth, generate bubbles and inflicts trauma on the pricing efficiency of capitalism. Market interest rates are important for healthy economic growth and should not be influenced. Sound money, more realistic today than ever thanks to computers and online retail, has its challenges but it is more reactive as it trusts capitalist markets. It also significantly reduces the Fed's involvement in the economy.

Periods where the Real Fed Interbank Rates has Changed (USA) 1976-2012
"Mild, Moderate and Very" express steepness of slope (rate of change)
Decreasing Real Fed Interbank Rates
(good for land)
1985-88.5
(very)
1990-93
(moderate)
1998-05
(very)
2007.5-08.5
(very)
2009.5-11
(mod)
Increasing Real Fed Interbank Rates
(bad for land)
1977-84
(very)
1988.5-89
(very)
1993-98
(mild)
2005-07
(very)
2008.5-09.5
(very)

Now compare that to how land (and housing) has done during those periods and year after.

Ten Rules of Negotiation

September 21, 2016

You might have heard of the rules of negotiation before. I thought I'd list them below. These are old school and surely you can think of situations where they apply, or would fail. At the end of the day you need to create win-win deals using your integrity. If you can do that, you'll make lots of deals and long-term business relationships.

1. Don't Negotiate

If you are the seller, you should understand your value proposition and sell to it. You know your value and should expect to get it.

If you are the buyer, you should calculate how much you want to spend and the value of what you are buying. That's your offer.

If you come in ready to negotiate from your starting point, than the other party is going to establish a new starting point that is less desirable. Then they will negotiate on top of that. You need to be an expert ready to communicate your value proposition.

2. Don't Negotiate With Yourself

If you are the seller you lead with your list price. Don't grind it down or diminish your confidence in it.

If you are the buyer, you have a set figure or expectation. Don't lose your confidence in that price.

3. Never Make the First Offer (if possible)

4. Never Accept the First Offer

The other party is always holding something back. If the other person is an expert negotiator they are also following rule 2.

5. Listen at least 80% of the time

Everything you say and do tells the other party how far you are willing to negotiate. Listening reduces the signals you send. Just as important, it lets you understand the other party better. Communicating your agenda is not as important as understanding the agenda of the other party.

6. Never give a free gift

Information, cooperation or discounts have value and should not be offered for free. Today's gift is tomorrow's starting point.

7. Don't Break Apart Pricing

Don't break apart your pricing unless you are interested in breaking apart the sale. The other party will now be able to negotiate multiple deals, only accepting the ones that offer the highest value. Tell them the value you are offering, but only give a total price that reflects the value proposition.

I've made this mistake in the past and I was left having to negotiate each line item. Customers will ask, but don't do it. Come with a total price for the offering. Bundle prices for other offerings. Only give specific numbers if you desire to sell them independently.

8. Avoid Regret with Three TQs

Could you have gotten more? You can use the Three Trading Questions to figure it out.

Expect something in return that costs them as much as you and offers you the same value as you are offering them.

9. Avoid Quick Deals

If the other party is pushing for a quick deal it is because they have noticed something beneficial in the deal that you are not aware of. Either that, or you are about to sell out of something in demand. You should try to figure this value out of ahead of time. But since it is now occuring, you know you didn't do all your homework. If the other party tries bending your arm, it is likely because they're scared that you will leave and reassess your price at a much higher value. Don't sign or shake until your understand the value you are offering.

10. Never Disclose Bottom Line

Your bottom line is not something you ever disclose to the other party. Imagine shaking hands on a deal after lengthy negotiations and feel that it is a win for everyone involved. Then the other party says you left money on the table. It's insulting and will cause remorse. Your bottom line is irrelevant because you can't grow a business to its potential on the bottom line.

Integrity

Your goal should be a long-term business relationship. Be authentic and don't play games. Negotiation is an art, not a game. Never treat another person like you are smarter than them. Honest win-win deals are your path to profit and will let you sleep well at night.