A LESSON FROM WARREN BUFFETT

Warren Buffett, arguably the greatest investor of all time, understood how to be faithful to models. In graduate school, Buffett studied the teaching and models of economist Benjamin Graham, the author of Security Analysis, a classic guide to investing. The book is a thorough examination of investment strategies and models, and Graham published four editions from 1934 to 1962. In Buffettology, the authors write that Buffett believed that “one learns through experience, and if not from experience, from those with experience.” In other words, the greatest investor of our time, possibly of all time, understood the power of learning from others and following models. Later, after getting some professional investing experience, Buffett vowed not to make another investment until he had read Security Analysis twelve more times. You see, he was not content simply to be familiar with the leading models in his field, Buffett wanted to be a true student of them. Purportedly, he still keeps all four editions of the book on his desk and regularly consults them, picking up on subtle nuances each year based on his continued working experience applying the models. For Warren Buffett, the right models really do matter. And, his tremendous success proves that following the right models can have really big rewards.

It is our hope that the Four Fundamental Business Models of the Millionaire Real Estate Agent might serve you as the theories in Security Analysis have served Buffett. Start with them as they are. As you implement them and understand them more profoundly, you’ll find the occasional need to experiment to see what works best for you in your market. Ultimately, everyone will end up with their own personalized versions of the models, which, while faithful to the underlying principles, will reflect your style and your market. Just remember to base your efforts on a solid proven model rather than on unproven, ungrounded creativity.

From all our experience and research, four key models stand out as foundations for a highly successful real estate sales business. Following these models should put you on the surest and quickest path to great real estate sales achievement. Our discussion of these four models will be divided into the two sides illustrated in the figures we saw earlier. First, as an overview, we will briefly explore the key areas of each model. Then we will analyze in much greater detail the key issues and numbers of each model as they specifically relate to the goals of the Millionaire Real Estate Agent. We’ll walk the surface of the models to get familiar with them and then dive deep to reach the understanding you’ll need to apply these models at a high level. To be highly successful in your real estate sales career it is important that you understand that you need not only to think like a businessperson— you need to become one as well. You must take on the actions of a successful business in order to have one. Models are about action. These four models represent the four major arenas in which you must take effective action to build your real estate sales career to its highest level of success.