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Sun Tzu’s The Art of War is a renowned ancient Chinese military treatise that has been studied and applied for centuries. Although originally written for warfare, the principles outlined in the text can be applied to various fields, including business and startups.

Ancient wisdom shouldn’t be discarded quickly even in modern circumstances. The principles of the world haven’t changed much despite the ever-changing makeup of our time.

Here are five quotes from the ancient text that can inspire and guide modern startup founders:

1. “Every battle is won before it is fought.”

This quote from Chapter 6 emphasizes the importance of preparation and planning in achieving success.

Before launching a startup, founders must conduct thorough market research and analysis to identify opportunities, competition, and potential challenges. This preparation is essential in developing an effective strategy and positioning the startup for success. Startups must also have a clear mission, vision, and goals to guide their efforts and keep them on track.

2. “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

To be successful as a founder you must have a deep understanding of the strengths, weaknesses, opportunities, and threats to your project. You must also understand your competition, including their strengths, weaknesses, and strategy.

While this is obvious, it is much easier said than done. Having a surface level understanding of either could be fatal, as the devil is in the details. This is why the best way to acquire deep knowledge of your project and its environent in the early startup stages is to run validation tests.

3. “All warfare is based on deception.”

Chapter 1 highlights the importance of deception in warfare. While deception is not the right term for startups (since they are not in an adversarial situation with most of their stakeholders), creativity and originality are crucial for success.

Successful startups use storytelling to create an emotional connection with their audience and differentiate themselves from their competition.

4. “Opportunities multiply as they are seized.”

Chapter 5 stresses the importance of opportunism.

This is likely even more important in the startup field – innovative projects must be agile and quick to respond to changes in the market, including emerging trends, shifts in consumer behavior, and competitor moves. This requires a culture of innovation and experimentation, where failures are viewed as learning opportunities and pivots are embraced as necessary.

5. “In war, the way is to avoid what is strong and to strike at what is weak.”

As a startup, you can’t take on established corporations head-on. Instead, you need to differentiate yourself and provide more value for customers in areas where corporations struggle ot do so. Usually those are market new dynamic market niches that require rappid innovation and agility – qualities that large corporations lack.

Every great empire that has come before the United States has eventually fallen. Some have fallen at least somewhat gracefully, like Great Britain. Others, like ancient Rome, well, not so much. 

As I write these words, more and more ink has been spilled regarding the looming threat to the American-led world order. Words such as “de-dollarization” and a “multipolar world” are thrown out often, perhaps simultaneously or even interchangeably.

And indeed, “de-dollarization” is happening, albeit at nowhere near the speed some doomsayers describe. And we are likely already in a “multipolar world” where the United States is no longer the sole superpower. Instead, a new cold war—this time between the United States and China—seems to have dawned as East and West once again bifurcate and globalization slows down and begins to reverse.

Not surprisingly, what plays out over the next few years will have a significant impact on investors. But first, let us strip away the hyperbole and describe what exactly is happening.

A Crash Course on the History of Reserve Currencies

Before the Great Depression, the United States and most other countries had a gold-backed currency. In other words, citizens could have their dollars redeemed in gold bullion. This remained true until Franklin D. Roosevelt severed that link during the Great Depression. 

While most currencies had been convertible to gold, this was rarely done. And during most of the 19th century and the first half of the 20th century, Britain’s pound sterling was the reserve currency of the world. It was World War II that changed this, as Britain put itself into such enormous debt to pay for the war (peaking at 270% of GDP) that the position of the pound was severely eroded. 

So much so, in fact, that when Britain, along with France and Israel, invaded Egypt during the Suez Crisis of 1956, the United States effectively vetoed the action by pressuring the International Monetary Fund to deny Britain financial assistance. Without such assistance, Britain, which once held the reserve currency of the world, would have to humiliatingly devalue its own currency. Britain decided to withdraw from Egypt (and eventually devalued its currency in 1967, anyways).

While the Suez Crisis symbolized the changing of the guard, the shift from pounds to dollars was all but codified with the Bretton Woods Agreement of 1944. This agreement opened a “gold window,” allowing nations (but not individuals) to convert dollars to gold at a fixed rate of $35 an ounce. At the time, most of the world was devastated, and the United States controlled a whopping two-thirds of the world’s gold supply. Bretton Woods all but made it official that the dollar was now supreme. 

However, such power usually leads to excess. And American exceptionalism, in this case, just meant exceptional excess. The United States very soon found its gold supplies being squeezed as the “guns and butter” of the 1960s (the Vietnam War and Great Society programs) were costing a fortune. To pay for both, the United States printed a lot of money, causing the currency to depreciate. Remember, though, the Bretton Woods system had a fixed exchange rate for gold. As dollars lost their value, gold was still priced at $35/ounce, and a run on America’s gold reserves began.

Thus, in 1971, Nixon closed the gold window, and dollars were no longer convertible to gold.

Now, the dollar was the reserve currency of the world, yet it was backed by nothing but the “full faith and credit of the U.S. government.” At the time, this left something to be desired, especially given all the money the U.S. had printed to help pay for so many guns and so much butter. The United States began to suffer from stagflation with low growth and inflation rates consistently north of 10%. 

A large part of the reason for such inflation was that there were too many dollars chasing too few goods. To alleviate this pressure, the Nixon Administration made a deal with Saudi Arabia in 1974, which brought about what is now referred to as the petrodollar.

Under this and subsequent agreements, Saudi Arabia and all OPEC members would sell oil exclusively in dollars. Then, as Investopedia notes, “subsequent deals deployed Saudi oil export proceeds to pay for U.S. aid and development projects in Saudi Arabia and to finance U.S. weapons sales to the kingdom.”

The petrodollar both increased the demand for dollars and also created an important reason for other countries to store them. And so, they did. In 1975, a full 84.6% of currencies held in reserve were dollars. After oscillating for a while, it settled in at 71.1% in 2000. Then, well, things started to unravel, albeit slowly.

Things Fall Apart?

After Russia invaded Ukraine in February 2022, Russia quickly became the most sanctioned country in the world, surpassing Iran for that dubious title by a factor of three. Unfortunately, though, the sanctions didn’t work, and the Russian ruble hit its strongest level since 2015.

Perhaps this was a sign of America’s eroding economic position in the world. Since then, a smorgasbord of countries have abandoned the dollar for trade in whole or in part. Not surprisingly, Iran and Russia abandoned the dollar. But in addition, India has signed an oil deal with Russia that forgoes the dollar, as has Brazil with China. France is doing the same, bringing de-dollarization right into the heart of NATO. And so is Saudi Arabia, the progenitor of the petrodollar.

So, needless to say, the petrodollar’s preeminence is being tested. Now, it’s important to note that this is not de-dollarization per se. The dollar reserve standard regards the currencies world governments hold, not the currencies they trade in. Still, the latter moving away from the dollar bodes poorly for the dollar to remain the world’s hegemon.

And that is what is happening, although at a very slow and steady rate. Over the first 23 years of this century, we have seen a notable decline in the dollar’s reserve currency status, falling from 71% to under 60%.

Here’s a chart from the Federal Reserve that shows how foreign exchange reserves have changed since 2000. The dollar has been slowly but steadily losing its share of foreign reserves: pic.twitter.com/1CRpMWJCPu

— Genevieve Roch-Decter, CFA (@GRDecter) March 29, 2023

At the same time, the United States is flirting with the same things that brought down the pound sterling and the Gold Window: too much debt. 

The U.S. trade deficit has been negative for decades and sits at negative $948.1 billion in 2022, up over 10% from 2021. And the federal budget deficit is even worse, at $1.1 trillion during just the first half of fiscal year 2023—up 63% from 2021. 

Bipartisan Policy Center

And there is no Covid nor lockdowns to explain this away.

Should We Panic?

Fiscal implosions rarely look like real-life implosions. After all, the United States bounced back from the Great Depression and Great Recession at least relatively quickly. A country’s collapse is usually due to war or revolution. Think of the Goths with Rome, the Bolsheviks in Russia, the Americans, British, and Russians with Germany, etc.

Fiscal unraveling may hollow out and leave nations vulnerable to such destruction, but it rarely destroys a country by itself. And there doesn’t appear to be anyone likely to threaten the United States militarily. We should also remember that Britain did not collapse after the pound sterling fell to second behind the dollar. 

At this point, the only possible contender to the dollar is the Chinese yuan. There’s no way the dollar will fall to third, and it has a long way to go just to fall to second. 

Despite many doomsayers, cooler heads on both the right and left have cautioned against delusions of the opposite of grandeur. They note that “the Chinese yuan has no adopters outside of China” and “Middle East oil-producing nations have other reasons to stick to the dollar. A crucial one is that most of their currencies are pegged to the greenback, requiring a constant influx of dollars to support the arrangement.”

Furthermore, despite fiscal recklessness spanning multiple administrations by both Republicans and Democrats, the United States still has the largest economy in the world. The GDP of the United States is $20.49 trillion, 50% larger than China’s and just a few trillion smaller than the next eight countries combined.

And it should also be pointed out, as Robb Nunn succinctly did, there are other reasons the U.S. dollar isn’t going the way of the Dodo. One is that it’s backed by the world’s most powerful military.

It’s that the US dollar also comes with the underwriting of the most powerful military on Earth. Assured by alliances with 8 of the top military powers on Earth with it. The Euro-Dollar system is where capital reserves are held etc etc

— Rob Nunn (@robfnunn) March 30, 2023

What Does This Likely Mean for the United States and Investors?

What we’re seeing is unlikely to be a calamity but is instead the slow but steady deterioration of the dollar as the sole reserve currency of the world. The future is likely that “multipolar” world with the dollar being held as the plurality of the world’s reserves but no longer the dominant position it had for so long.

What this means is that there will be more dollars returning to U.S. shores that were once occupied in some foreign country’s reserve accounts. Not a tsunami of dollars returning, but a noteworthy amount in a relatively steady stream.

At the same time, global trade and integration is slowing and likely to reduce as countries retrench with more nationalist policies and the world again divides between East and West. While this has its benefits, low costs are not among them.

Furthermore, the baby boomer generation is retiring, taking a disproportionate percentage of the labor pool out of the workforce. And this is a global phenomenon. The United States isn’t even close to the worst when it comes to upside-down demographic pyramids.

These new retirees are and will be switching from savings mode to spending mode. As geopolitical strategist Peter Zeihan notes,

“In the world of 1990 through 2020… all the richest and most upwardly mobile countries of the world were in the capital-rich stage of the aging process more or less at the same time. Throughout that three-decade period there have been a lot of countries with a lot of late-forty-through-early-sixty-somethings, the age group that generates the most capital… Collectively, their savings has pushed the supply of capital up while pushing the cost of capital down…” 

But once those Baby Boomers start retiring (as they already are), the math switches,

“Not only is there nothing new to be invested, but what investments they do have tend to be reapportioned from high-earning stocks, corporate bonds, and foreign assets to investments that are inflation-proof, stock market crash-proof, and currency crash-proof.” (The End of the World is Just the Beginning, pg. 200-202)

In short, the eroding of dollar hegemony, the fiscal deficits, the pivot away from globalization, and the reduction in savings from retiring baby boomers is all going to be putting significant upward pressure on interest rates.

Inflation in the United States has cooled significantly since the highs of 2022. But long term, the “good ole days” of interest rates in the 3s and 4s are likely a thing of the past. There’s simply too much upward pressure on prices and interest rates.

Already, there has been talk of moving the Fed’s inflation goalpost of 2% up to 3 or 4%. While Fed chairman Jerome Powell has rejected such ideas so far, it will likely become inevitable in the relatively near future.

Given the long-term trends, it would make me hesitant to refinance old mortgages in the 3s and 4s, even if rates drop back into the 5s. (Unless, of course, you have a really good place to put the money you refinance out.) Fixed rates are also better than adjustable, at least once rates come back down from their current high.

While no one has a crystal ball, rates appear to be coming down in the short term, but all signs point toward persistently higher interest rates in the long term.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

It’s safe to say that artificial intelligence can evolve nearly every business. The question is, can it completely revolutionize them? Can your business transform from slow lane to fast lane, from service to product, from a million to a billion, by incorporating AI?

Whatever you think about the AI hype and bandwagon that followed, winners are emerging and the gains aren’t slowing down. Be smart, think differently, make the moves that no one else is making, and you might create a business you didn’t realize was possible.

Here are 4 simple steps to revolutionize your business using AI.

Step one: Start experimenting with AI

The first step is to undertake an intentional phase of learning about artificial intelligence. Adopt a beginner’s mind and dig into everything it involves. Talk to those in the field, subscribe to those that were there before it was cool, and immerse yourself in theory and application until you know the jargon and can conceptualise like a pro. Do the research, join the masterminds, get hungry for information. Aim to develop a solid understanding on which you can build.

After that, get some practice using the tools that already exist. Dozens of AI directories will show you ones in every industry. Map out your entire business on an A4 sheet of paper including all the processes it carries out every day. Break your operation into production lines, each with a clear purpose and list of tasks. Armed with your business map, use the AI tool directories to find a platform for your every need. Don’t do this solo; empower your team and ask your freelancers. Challenge them to ramp up their output by incorporating AI. Give thanks when they find faster and cheaper ways of getting their job done.

Step one scratches the surface of what might be possible with AI, saving you time and money in the process.

Step two: Build something you want to use

Now that you’ve surveyed the landscape and are familiar with the scene, you’re starting to approach challenges with AI in mind. A capacity problem can be solved with a few prompts; an output problem with a specific tool. You’re spotting gaps in the capabilities of what already exists and coming up with ideas for tools that you’d love to use in your own business.

These insights are gold dust and should not be ignored. Every idea that you have for a tool you would actually use yourself (a concept known as dogfooding) is key to revolutionizing your company using AI. If you love it, chances are other people will too. So build it. Map the tool out (perhaps with a second opinion from a pro), add your spec and budget to Replit Bounties and have a prototype within a few weeks. It doesn’t need to be perfectly polished because you’re only using it within your company. Once it starts making your life easier, turn it into a case study and tell your network.

Step two is where you build the tools that you want to use and assess the appetite for making them available to others.

Step three: Think in terms of the platonic ideal

Elon Musk solves problems in specific ways. One way is thinking in terms of the platonic ideal. This means, rather than taking something that already exists and making marginal improvements, you reimagine it entirely, from the top, down. Identify the most fundamental need of your ideal customers, look purely at the outcome you want to achieve, then work backwards from there, without any preconceived notion of what’s possible.

Think about how your business incorporates AI through the lens of this platonic ideal. That way, you find what the perfect version of your business looks like. In this new version, you need only be constrained by the laws of physics, everything else is optional. Ignore budget and time restraints and ignore the fact that something might have never been done before because you could be the first.

Step three stops you being confined by thinking small and moves your business from evolution to revolution.

Step four: Find the right partners

By now you know what you’re talking about, you have a sense of what’s possible with tools, you’ve scratched your own itch with a few that you’ve made and you’re well on the way to understanding how you fit in this exciting new world. Next, get more clarity and a sense of feasibility by talking to developers about productizing your business. Assuming you don’t have a technical background (like many of the world’s greatest tech entrepreneurs), you’ll need to find trusted partners to turn your in-house prototypes and vision of the future into lines of code and real life products.

The best way to get the advice of an AI engineer? Pay them for their time. Find reputable people on Upwork, reach out and get a quote for a few hours of chatting. Tell them your ideas, explain what you want to achieve, describe a specific problem you’re trying to solve. If they’re duly fascinated with the field, they’ll love the challenge. They’ll explain their thinking, suggest new ways forward and add elements you hadn’t considered. Chat to more than one to get multiple perspectives and go forward with those you want to partner with. Keep an open mind about the potential of the role; this person could end up being your CTO.

Step four is where you decide the role your company will play in building the future and assemble the dream team to make it happen.

Immerse yourself in learning, find the gaps in the market for the tools that business owners like you are crying out for, then imagine them from the ground up and get help turning them into products. Revolutionize your business using artificial intelligence with these four simple steps.

For centuries, investing as a group has been a key ingredient in building wealth. I recognized early in my journey that earning a college degree, landing a steady W-2 job, and contributing to my 401(k) would only get me so far. I was participating in a vast investment world as an individual—but the real investors were “playing” on teams.

More than a decade ago, my three brothers and I came together on a trip where we shared our desire to obtain financial freedom for our families and future generations. We knew we couldn’t do it alone. We also knew that combining resources was nothing new. For the wealthy, outsourcing the administrative process to pool their money may cost tens of thousands. But that is a drop in the bucket when considering the size and scope of these investments for each group.

For my family, we struggled to get started in those early days. Like grappling over the last piece of cake as kids, we were challenged to get on the same page, navigating things like joint bank accounts, being transparent, managing a cap table, and so many other hurdles, twists, and turns. 

I took it upon myself to do something about it and change the industry. Since founding Tribevest in 2018, we’ve solved countless issues to make it safe, easy, and transparent to form an investor group—or what many like to call—an Investor Tribe.

Let’s take a look at the top five ways to invest as a group.

1. Investor Tribes

Investor Tribes are an excellent fit for anyone, from experienced investors to newer investors, looking to break into opportunities and level up their knowledge and wealth. If you’re interested in teaming up with friends, family, or like-minded people to invest in anything from real estate to alternative investments, an Investor Tribe is a great option. 

Suppose you’re looking to partner with friends and family or a business partner to transact in multiple investment opportunities. In that case, an Investor Tribe may be the best investing group structure to consider. 

Investor Tribes have the benefit of simplicity. They are quick to launch and inexpensive. An Investor Tribe consists of a founder, or the leader of the group, and members, who are equal participants and contributors to the group’s investing efforts. 

The primary consideration you want to account for when pursuing an Investor Tribe is that you can only accept capital from active partners in your LLC. Your tribe cannot accept contributions from limited partners or passive investors. If you take money from investors outside your LLC at any point, you may be subject to SEC regulations.

2. Real Estate Syndications 

Another format you can use to structure your investment group is syndication. Syndication involves investors coming together to purchase a real estate asset and is typically led by professional investors, also known as sponsors, who need to finance a specific project according to a particular timeline.

A long-time hurdle for real estate syndications is the minimums, which could be $50,000 or $100,000 per investment. Unless you have millions of dollars to invest each year, it can be difficult to diversify your portfolio into different asset types and markets. 

Large minimums and a lack of diversification were additional issues we solved at Tribevest. If you don’t have millions of dollars to become a sponsor, you can always use Investor Tribes or SPVs to invest into a syndication. 

3. Special Purpose Vehicles (SPVs)

Special purpose vehicles are a fit for professional investors. If you are a professional making a living through finding, assessing, and participating in private deals for clients and passive investors, an SPV may be a good fit. 

SPVs generally consist of general partners and limited partners. General partners are parties who take a role in helping to manage the SPV. These partners are liable for the SPV’s debts—meaning they’re on the hook. On the other hand, limited partners are silent or passive investors in the deals pursued by the SPV. 

SPVs aren’t without their downsides, however. First, you’ll want to consider the cost: setting up an SPV can be expensive. A standard setup fee for an SPV is up to 7% over six years.

Another factor to consider when looking into an SPV is that you will be subject to the rules and regulations of the SEC. If you don’t have the knowledge, expertise, or time to navigate all the appropriate SEC requirements in pursuing your investment, an SPV might not be the right fit for your investment group. 

We recently launched Pro Investor Tribes, which allows an entity raising funds for a single deal to easily create a multi-member LLC with active investors. This is a great tool for savvy investors who are looking to expand their investment business and need a streamlined process. Through the Pro Investor Tribe process, multiple investors can contribute capital towards a specific deal under the umbrella of an active multi-member LLC. Similar to an SPV, but with active members. 

The tribe will be protected by a ratified operating agreement and offer the ability to pool capital safely and quickly. Once all the funds are pooled from all the members of the LLC, the tribe can invest in a specific deal as one business entity. For example, if an Open Tribe of 10 people contributes $10,000 each, their LLC can reach a $100,000 minimum for a single investment.

Since the number of members in a Pro Tribe is capped up to 15, and the members are active owners with a ratified operating agreement, voting rights, and quarterly meetings, a Pro Tribe is not required to register with the SEC.

4. Crowdfunding

Crowdfunding suits startup founders looking to fund their growing businesses with friends, family, and employees. If this sounds like you, crowdfunding may be an option for your investing journey.

Technically speaking, crowdfunding isn’t the same thing as an investor group. However, it’s still a good fit for some specific cases.

A benefit of crowdfunding is it can be an incredible way to raise capital without pursuing traditional financing or in addition to conventional financing. If you’re crowdfunding for a startup or other business venture, it’s also a great way to build a solid base of brand advocates in the early stages of your business. You may also get media exposure if your crowdfunding campaign is a smash hit. This exposure may be through traditional media like a mention on a news station, trade publication, or social media if a popular user shares your crowdfund on their feed. 

Crowdfunding can be powerful, but its use cases are rather targeted. Similar to an SPV, a crowdfunded venture is subject to SEC regulation. This can make things complicated or stressful to manage. 

Crowdfunding can also be expensive, where platforms require you to pay various fees. For example, if you’re using Kickstarter, you will pay 5% of your raised capital as a platform fee, then an additional 3-5% fee to process all contribution payments. 

5. Fund

An investment fund might be a good choice if you’re a professional investor looking for a long-term opportunity. A fund allows investors to pool capital to purchase securities together. An investment fund is a complex investment group structure best reserved for seasoned professionals. The advantage of a fund is that each group member controls their shares, maintaining autonomy while investing as a group. 

Generally speaking, investment funds are formed by professional investors looking to create an ongoing investment business that lets them access more deals and leverage the entire group’s experience. 

Some of the benefits of funds include diversifying to a greater extent, pursuing a wider variety of investments, and formally registering your investment group with the SEC. You can also seek accredited passive investors to further boost your investment fund’s capital. A fund tends to be a long-term commitment, with an expected buy-in of ten years or more. 

Another downside of investment funds is that they are often blind pools. This means passive investors don’t always know what assets a portfolio includes when they sign on to contribute funds. 

Conclusion

Which investing group structure is the best one? That depends on your goals for your group, your investment, and yourself. Each structure has its benefits. If you are considering an Investor Tribe or Pro Investor Tribe, please reach out to me or our team at Tribevest.

This article is presented by Tribevest

Tribevest has made doing business with partners easy, safe, and transparent. Investors use Tribevest to form active business partnerships through Tribes and streamline their back-office operations.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

It’s common to fear failure. When trying to avoid ridicule, embarrassment or a dent to the ego, we act in predictable and unhelpful ways. No one really wants to fail, but failure is inevitable when aiming high. Its lessons hold growth, so learning to love it will serve any entrepreneur well.

Fear of success is a different beast, and one you might not realise you have. Fear of success is the concern that once we achieve something, there may be associated suffering. When you sabotage your efforts for seemingly no reason, when you keep yourself playing small no matter how much you dream big, and you can’t seem to shake those old ways and thought patterns, this fear could be holding you back.

Why would anyone fear success? What’s scary about fame, fortune and fun on new levels? Your conscious mind can explain all the benefits, but your subconscious might be terrified of them coming to fruition.

Maybe you’re afraid you won’t be able to handle it: the money, the attention, the influx of enquiries. Perhaps you’re afraid you’ll lose yourself to ego, not enjoy the spotlight or the inevitable criticism, change too much or lose some friends. Are you scared you’ll have to work too much, find out you’re not as good as you hoped, or have to deal with a backlash?

Consciously or otherwise, these fears impact your actions. Here are six obvious signs you fear success, and how to overcome them.

You avoid hiring

Deep down, you know that with the right people on the right seats, you could remove all bottlenecks in your business. You, as the owner, are probably the main bottleneck. Your tasks could be done by someone else but you’re avoiding hiring them. You’re coming up with multiple reasons why someone else won’t do a good job. You say you don’t want to manage people or have the burden of more suppliers. You test the waters but don’t fully commit to training people sufficiently, or you find problems in the service, then take the responsibilities back and declare no one can do things as good as you.

This is a sign you fear success. As long as you’re keeping your tasks and doing the busywork, you can’t possibly get to the next level. Your fear is putting a ceiling on you and making up excuses for why you can’t step up. It wants you to stay inside, remain focused, and persevere with the small roles so you can’t ever access the big ones. When the working week’s hours have run out and you have nothing to show but the status quo, you’re within your comfort zone and safe from the danger that success might bring.

There’s no denying that working more top level and less in the detail will grow your business, so stop avoiding the role.

You don’t spend money

Spending money is a privilege that you aren’t taking advantage of. Money can buy you time and output. Money, spent in the right way, can bring trials and users and customers that stay forever. Money can bring awareness and clicks and website traffic. Money can free up the time you would have spent fixing your own car or loading your own dishwasher. But your fear of success wants you to be slow, busy, inexperienced and invisible. That will keep your business small.

When you fear success, you avoid spending money. You’ve developed a scarcity mindset and you’re aligning yourself with frugal values that you now take pride in. You ignore ways to access cash and you believe it’s scarce. You adopt the personality of a scrooge, always trying to find discounts or save a few bucks here and there. You’re sweating the pennies without going after the pounds. Limiting beliefs around money hold many entrepreneurs back.

See spending as making investments and flip your thinking. Instead of waiting until you have the money to spend it, invest to make more. Think of spending cash as something you “get” to do, not “have” to do. Act accordingly and you will reap what you sow.

You don’t explore new ideas

If you don’t explore new ideas, it might be a sign that you fear success. Stuck in your ways, you prefer the safe known to the potentially prosperous unknown. You aren’t convinced what you’re doing right now will lead anywhere impressive, but you keep going under the guise of focus and determination, nevertheless. You ignore new technology and only adapt when necessary. You dismiss inventions as hype and close off completely.

Speculate to accumulate. Going down rabbit holes of research can bring ideas for improvement and new pockets of customers. One concept from a book, one method from a YouTube video, one insight from a friend with experience, and your company could entirely change its trajectory. But your fearful mind wants to close off these inputs and get back to what is familiar, because it knows that way doesn’t hold big, scary achievement.

Rapid technological advancement means exploring new ideas isn’t just essential for growth, it’s essential for staying still. Even if you don’t want to progress, don’t let yourself go backwards.

You shut down suggestions

When people you trust want to give you suggestions, but you find yourself shutting them down, this could be a sign that you fear success. Friends and networks have cool ideas for where you could take your products or services, but you respond with reasons why they probably won’t work. You won’t give it a go. You won’t entertain their proposals. Are your fears of expansion masquerading as limiting beliefs?

What if you heeded their advice? What if you made a few edits and the opportunities rolled in? Then you’d have to show up, figure stuff out, and face new challenges. This is a daunting prospect for someone who secretly wishes for normality and wants to live a quiet, comfortable life. Being open to suggestion means hearing people out. You don’t have to take action, but at least listen. When you start to see that exponential growth, you’ll have people to celebrate with.

Instead of shunning the suggestions, consider their impact. See what happens when you try a few things out.

You don’t ask for help

You think you have all the answers you need to run your business well, so you plough on with what you know. You have no coach, you take no guidance, you seek advice from no mentors. There are people all around you, but you avoid asking them for help. They might be too busy, they might think you’re taking liberties, they might not want to talk about work. That’s what you say to avoid getting their opinion.

If there are people in your network who have had the success you think you want, but you’re not getting their advice, this is a clear signal you fear success. You could get the answers so easily, but something is holding you back. Perhaps you do ask for help, but you ask too late. Your plan has already failed, which is maybe what you really wanted. Procrastination (before asking for help) or self-handicapping (by not asking all together) are sure signs of sabotage.

Emulating proven strategies could work out really well, but something is stopping you moving ahead. Figure out what and find out why.

You shirk responsibility

You could put your name forward for new experiences, but you shy away. You could take on more responsibility, but you avoid the limelight. You could ask the question, request the chance to prove yourself, and put your art out there, but something is holding you back. You know you’re capable and you know your work makes a difference, but you’re scared of proving it. That would mean you had to change.

If your business took off in a big way, if people were banging down your door to work with you, you’d have no excuse not to grow. But maybe you want the excuse. You’re content with chugging along, getting by with the bare minimum. You only have a few hours of client work and you’re convincing yourself that’s a good thing. More responsibility comes with drawbacks as well as perks, and you’re inflating the problems. If people knew how good you were, you’d be a billionaire. So why not let them know?

Take on more than you think you can handle and find out how capable you just might be. Remember you can stop at any point.

There are six signs that you fear success that you might not have realised so far. Avoiding hiring, spending money or taking on responsibility keeps you within the realms of comfort. Not taking advice, asking for help or exploring new ideas close you off to outside inputs that could change your game. Recognise when the signs that you fear success are cropping up so you can explore what’s behind them. What’s the worst that could happen, and wouldn’t the pros outweigh the cons?

There’s been a lot of alarm in the real estate investment community lately over a newly enacted Federal Housing Finance Agency rule for Fannie Mae and Freddie Mac loans regarding mortgage fees. 

The gist of the complaint is that homebuyers with good credit will now have to subsidize those with bad credit. Technically, this is true. However, the way it is being framed is quite misleading. The general argument goes something like this: Those with a 620 FICO score will get a 1.75% discount, and those with a 740 FICO score will pay 1%.

Or another example would be this particularly popular tweet:

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Homebuyers with credit scores of 680 or higher will pay ~$40 per month more on a home loan of $400,000.

Buyers with down payments of 15% to 20% will get socked with the largest fees.

Buyers with riskier credit ratings and lower down payments will get lower rates and fees. pic.twitter.com/yVEp3btNJg

— Wall Street Silver (@WallStreetSilv) April 19, 2023

While what is said is technically correct, it sounds much worse than it is.

First and foremost, this would only affect Fannie Mae and Freddie Mac loans. This accounts for most loans made to homeowners but would not affect FHA and VA loans nor the non-conforming loans that many investors get.

The fee being discussed here is called the Loan-Level Price Adjustment or LLPA, which predominantly takes into account the borrower’s FICO score and the LTV of the mortgage. To a lesser extent, it also takes into account whether the property is owner-occupied or not, if it’s a condo or single-family residence, whether it’s a second or first mortgage, and if there is any cash-out on a refinance.

The LLPA fee is then effectively added to the mortgage. So, for example, if the mortgage is $100,000 and has a 1% LLPA, the LLPA would be $1,000. This could be paid as a fee but is more often absorbed by the lender in exchange for a higher interest rate on the loan. 

This added cost on the mortgage is to cover Fannie Mae and Freddie Mac from the added risk of lending to riskier borrowers.

Riskier Borrowers Are Still Paying More

The mistake being made by many here is that the percentages given are the changes, not the totals. Well, not quite even that. The 1% fee mentioned is what someone with a 740 FICO score would pay if they are taking out an 80-85% LTV loan. The 1.75% “discount” is not the fee someone with a 620 FICO score would pay, but instead the reduction in that fee from before. And in this case, it is for someone taking out a 95% LTV loan or higher.

Before this rule was passed, the LLPA fee for someone with a 620 FICO score taking out a 95% loan was 3.5%. Now it is 1.75% (a 1.75% reduction). Here is a chart from Mortgage News Daily showing the effects the changes of this rule would have on loans for borrowers depending on the LTV and FICO score.

And here are the actual rates people would pay.

As Mortgage News Daily sums up,

“As you can now plainly see, if you have a score of 640, you’ll be paying significantly more than if you had a 740. Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That’s a difference of 1.375%, or just over $4000 on a $300k mortgage. This is almost half the previous difference, and that’s certainly a big change.”

In fact, this rule change was made back on January 1, 2023, and only came into effect now. Here is the announcement from the Federal Housing Finance Agency, and here is the full loan-level price adjustment matrix from Fannie Mae itself.

The long and short story of it is, however, that those with low credit will still pay more than those with high credit. The real estate world has not been put completely upside down.

Is it Still a Subsidy for Those with Low Credit?

At the beginning of this article, I said this new rule still involved those with good credit subsidizing those with bad. Given those with good credit still pay less, how is that so?

The reason is that those with low credit scores are much more likely to go into default than those with good credit. And the difference is probably bigger than most people realize.

For example, a white paper from FICO concluded their model showed that “at a score of 800, we expect approximately 180 borrowers to consistently pay their loans on time for every one borrower that defaults. This compares quite favorably to consumers with a score of 600, where one out of every 11 borrowers is expected to have payment problems.” 

Overall, this was the relationship they found between FICO scores and mortgage default rates was as follows:

Another paper found that between 2000 and 2002, those with a FICO score of 750 or more had a probability of default of just 1%, whereas those with a score of 600-649 had a default rate of 15.8%, and those under 500 had a default rate of a whopping 41%. Similar results were found in another study by the SEC of mortgages taken out between 1997 and 2009.

The general result should not be surprising, although the size of the discrepancy might be too many (Does the 2008 financial crisis make a little more sense now?).

The LLPA is meant to cover some of this added risk. But from just eyeballing the chart above, it would appear that even the old LLPAs were a bit generous (especially given the average loss a bank takes on a mortgage that gets foreclosed on is something like 40%). Reducing the LLPA for risky borrowers is likely going to increase the costs to Fannie and Freddie even more so. And as basic economics would indicate, that loss would need to be made up for by increasing rates across the board, including on borrowers with high credit ratings. 

Thus, it is true this rule is likely to mean that borrowers with high credit ratings will be subsidizing those with low ratings.

But no, the outrage clickbait headlines are false. Borrowers with low credit ratings will not be paying less than borrowers with high credit ratings. And it’s important to be precise about what exactly is happening.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Americans are collectively spending nearly $65 billion a year on sneaky fees, according to the White House. “It really seems like companies have become addicted to junk fees,” Lina Khan, chair of the Federal Trade Commission, told CNBC. Junk fees are indeed adding billions to companies’ revenue. Watch the video above to learn more about where junk fees hide, proposals for change, where policy may fall short and whether increased oversight may be enough to squash junk fees once and for all.

In April 2023 Greg Brockman took to the TED stage to share the inside story of ChatGPT’s astonishing potential. In a 16-minute talk he showcased upcoming features of the AI tool that many entrepreneurs have been experimenting with and emphasised, “it’s incredibly important that we all become literate in this technology.”

After the talk, which in Brockman’s words covered, “a bit of the future of AI tools, how we teach AIs to follow our intent, and how the tools themselves can help scale our ability to give high-quality feedback” came 14 minutes of questions from TED founder Chris Anderson.

Here, Brockman was probed by Anderson on how everything he shared had been made possible as well as how OpenAI is handling aspects of AI that many people are worried about, which Anderson called “a pandora’s box” of potential problems.

Brockman’s answers hinted at his beliefs and principles, which are presumably woven into the culture of how OpenAI thinks and builds products such as Dall·E and ChatGPT. From Brockman’s responses on the TED 2023 stage, here are some principles that surfaced, for ambitious entrepreneurs to emulate.

1. Get intentional

“We made a lot of deliberate choices from the early days,” said Brockman, who cofounded OpenAI with Sam Altman seven years ago because, “we felt like something interesting was happening in AI and we wanted to help steer it in a positive direction.” The OpenAI approach, explained Brockman, has always been, “to let reality hit you in the face.”

Deal with reality as it is, and work on your mission from there. Let things happen, observe them, draw conclusions and plough on. Become a student of trends, human behaviour and technology and figure out what you can create within that. Brockman said OpenAI is intentional about, “push[ing] to the limits of this technology to really see it in action.”

2. Be prepared to fail

“We tried a lot of things that didn’t work,” said Brockman. Like with many success stories, “you only see the things that did.” For every ChatGPT product that secures 100 million users just two months after launching, there’s hundreds of ideas that didn’t make it out the meeting room, months of cutting losses and moving on, and years of trial and error.

“I don’t think we’re always going to get it right,” said Brockman. But you only need to be right once. Being prepared to fail makes that far more likely, because you take more risks and you know where to draw the line. Plus, failure is nothing to be embarrassed about.

3. Welcome misfits

Brockman believes that a big part of making progress lies in getting, “teams of people who are very different from each other to work together harmoniously.” If everyone is the same, there is no range. The ideas come from the same pool, the worldviews are too similar and the mind-mapping becomes repetitive.

Misfits, rebels and oddballs, each committed to the purpose and prepared to work hard. Strong, supportive management and an underlying feeling that you’re onto something lifechanging. And as Brockman walks through ChatGPT placing a grocery order as well as saving the life of a sick dog, you can see why that might be true.

4. Advance existing knowledge

“We’re all building on the shoulders of giants,” admitted Brockman, pointing to the progress in computers, algorithms and data past and present. OpenAI didn’t invent AI, they just explored it to create a range of products. ChatGPT isn’t the only AI language model, but it was arguably the first to be widely accessible to all.

Engineers work on problems and build on the knowledge of other industries before they make it big, and that’s exactly the message here. See what’s already happening, learn from the work of those that go before you and build right on top. Learn from other people’s mistakes, get a head start, and follow that “ever-increasing up-and-to-the-right trajectory” that Altman swears by.

5. Place big bets

“We always knew we wanted to be a deep learning lab,” said Brockman, but ChatGPT came from an unexpected place. He then told the story of his OpenAI colleague, who created a tool that could predict the next character in Amazon reviews.” When this colleague got a result, the team doubled down on that specific methodology, and that’s when things got interesting. “We knew,” Brockman said, “you gotta scale this thing. You gotta see where it goes.”

Placing big bets is similar to Altman’s method of, “make it easy to take risks,” which he says comes from having, “your basic obligations covered.” OpenAI has been raising funds since 2016, so it was well prepared to tinker and go down rabbit holes. Place bigger bets, win bigger prizes. There’s no proof like ChatGPT.

6. Rebuild old methods

Once OpenAI knew it was onto something with aspects of its tech, Brockman said, “we had to rebuild our entire stack,” adding that, “you have to get every piece of the stack engineered properly.” Paving a successful way forward will require new paths and footholds. Old processes might not be relevant, and the foundations won’t support the growth that’s about to arrive.

Once the new stack is in place, the now-snowballing idea can fully form. In Brockman’s talk, he described the behaviour of ants where, at first, “single ants run around,” and then as you get enough of them together, “you get these ant colonies that show completely emergent, different behaviour.” Rebuilding old methods allows for new results.

7. Scale with caution

“As you scale up, it surprises you,” said Brockman. Anderson then asked about the, “huge risk of something truly terrible emerging.” OpenAI knows the dangers, and Brockman does too. “We think it’s so important to deploy incrementally,” he said. With the ant colonies that act differently at scale in mind, Brockman said they, “take each step as we encounter it,” which gives people ample “time to give input.” They then “figure out how to manage it,” as they add capabilities to their tools and algorithms.

With AI and business in general, you cannot predict everything that will happen with large datasets and multiple moving parts. A small shop might be destroyed by a million customers, but one that already has ten million can handle a 10% increase. Scaling with caution is on the agenda for OpenAI, with Altman confirming that there is currently “no GPT-5 in training.”

Replicate the success of ChatGPT by following the principles that emerged when the cofounder spoke at TED 2023. Get intentional, be prepared to fail, and welcome misfits in your company. Stand on the shoulders of giants so you can place big bets and rebuild your systems as you find potential ways forward. Finally, scale with caution so the whole thing builds in a sustainable way.