Moments of Clarity

Joel Kotkin Writes another Home Run Piece

Joel Kotkin has a piece appearing in Forbes called, "The Triumph of the Creative Class".  In the piece, Kotkin deftly explains the implications of an Obama Presidency as our economic and cultural leadership has shunned a more conservative industrial economy in favor of a more liberal brain based society.

The term "creative class" was popularized by former George Mason professor Richard Florida, who used it to describe those with both brainy business acumen and a very liberal cultural agenda borrowed from the bohemians of the '60s.

I swear that Kotkin must have accessed the part of my brain remotely that stores my "favorite words and phrases list":

Today the traditional business leadership, like their Republican allies, present a spectacle of utter disarray. The commercial banks have been effectively nationalized. Many traditional manufacturers, notably automakers, also yearn to suck on the federal teat. Reduced to supplicants, these companies have surrendered their standing as independent players. At the same time, the traditional energy companies, long the whipping boys of Congressional Democrats, will be fully occupied trying to survive the onslaught of anti-carbon regulations now all but inevitable.

The article is a telling and realistic analysis of where we're headed and how lost the Republican party is for now.  Today someone pointed out a website from the Republican challenger to an incumbent Senator in a blog post.  Can't find the link but will if my fellow Des Moines'ian chimes in to tell me who it was. 

The commentary that followed was tragically true and I paraphrase:  OMG.  This website looks like a student project from the nineties.  There was a link to a blog on the site.  Last update:  Early September.  There were a few YouTube videos but they were canned political speak.  Unreal. 

The creative class social liberals "get it" with regard to leveraging their economic power and their online power.  I was the FIRST to sign up for Obama's "Text Message alert to be the first to know who his VP pick was".

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• Book Review: The Rise of the Creative Class

Des Moines a Top Ranked City for Families

Thanks to Tyler Osby for directing me to this "Kiplinger's 2008 Best Cities" issue.  I knew this all along but it's nice to see the nation recognize it. In so many ways...Iowa is the center of the USA.  I am so happy I executed my geographic arbitrage to this place.  Thanks Iowa!

Des Moines is ranked #9.  Here's some key stats they delivered in the piece.

Population: 532,425
Population Growth Since 2000: 9.6%
Percentage of Workforce in Creative Class: 32.1%
Cost-of-Living Index: 90.6 (100 being national average)
Median Household Income: $53,384
Income Growth Since 2000: 16.3%

Kiplinger went on to say:

“Des Moines’s friendly, hometown atmosphere, top public schooling and affordable cost of living make it an ideal place to raise a family. But it also has big city amenities, including a growing arts scene with galleries, a symphony orchestra, a ballet and opera, trendy shops and an expanding skyscraper cityscape.”

The full story on Des Moines can be found here. The full list can be found here.

So, who else made the cut? Here’s the top 10:

No. 1: Houston
No. 2: Raleigh
No. 3: Omaha
No. 4: Boise
No. 5: Colorado Springs
No. 6: Austin
No. 7: Fayettville
No. 8: Sacramento
No. 9: Des Moines
No. 10: Provo

On Being a Geographic Arbitrageur

What does it mean to be a geographic arbitrageur?  I have been one for 2.5 years.  Below are my definitions, observations, and findings.

1. One who keeps a job and income from company A after convincing company leadership (if you're not one of them) that it would be just as productive if not more so work remotely.  That remote location allows total flexibility for lifestyle choices since broadband and cell phone service is nearly ubiquitous.  Green acres the place for you?  No problem with a cable modem or DSL.  Frequent travelers may find that a strategic middle USA location affords them the opportunity to get to meetings and back same day.  It helped me a bunch being located in Iowa.  Besides the fact that our airport is mostly serviced by regional jets, I could still reach most destinations and get home same day. I could be in California by 11:30AM and leave early the next day reducing waste. 
2. One who quits their job, sells their real estate in a high priced market, and moves to a lower priced one allowing a big step up in quality of life, financial freedom, and personal satisfaction.  (Sometimes called an equity refugee which we see LESS of nowadays).
3. One who creates a business for themselves that supports a "locationless" model. These folks are smart!  They create businesses that have a very extensive online/outsourced model that means they can work from Baton Rouge or Beijing.

When I became a geographic Arbitrageur, I did a little of all 3. 

1. By selling our CA home 2.5 years ago and moving to Des Moines, IA, we had the virtually limitless housing choices in the Midwest at much lower values. 
2. I gained back 2.5 hours of my life EACH DAY by removing the commute that I'd done for 10 years.
3. I gained back an additional 5-10 hours per week spent in what I'd call "generally getting around traffic".  It's hard to imagine but just getting from point A to point B in CA, maybe 7 miles can often take 20+ minutes each way. 
4. I used the extra time and freedom to work on creating the best life possible for me and my family.
5. I became an avid cyclist and am training for a triathlon in June. (Side affect is losing 25lbs and still on the way down).  Des Moines has a great network of trails to make fitness yet that much easier to attain.
6. I created a company, www.RentalMetrics.com and am building a business model that I can manage from anywhere in the world.
7. Due to my flexibility and freedom, I've been able to cultivate a network of wonderful people here in Central Iowa.  I only hope to give back as much as they've given me. 

Good luck on become a geographic arbitrageur.  Executing on my plan has truly set me free.

If I can be of assistance in anyway, let me know.

Livin' the Dream.

From Flyover to Tech Hotspot: How Global Warming Has Shifted the Where of Cool

Let's assume for a moment that global warming is happening on some scale, man-made or otherwise. 

**FOR IMMEDIATE FICTITIOUS RELEASE** February 15, 2008

Global warming today has been credited with making the Midwest "cool".    Now that the Western half of the U.S. and the Northeast are plagued with the inability to reliably produce electricity and severe drought...places like Iowa have become highly desirable.  An unnamed Iowa legislator said under the condition of anonymity that, "It's about time that global calamity worked in our favor.  I'm not sure if global warming is real or not...but for now, I'm loving it."

It's been almost a year now since Google (GOOG) announced that it was building a data center in Council Bluffs, Iowa.  Now we  find that Microsoft (MSFT) is getting close to deciding on an Iowa location for a similar data center operation. Local and state governing bodies are scrambling to put together incentive packages that sweeten the deal.  It seems that Iowa has become cool.  Or more accurately, Iowa is hot.

Iowa's Paris Hilton "hot" stems from its abundant water and ability to produce massive amounts of electricity.   "Look, we know that the public thinks that we're bending over for Microsoft, and we are," said a confidential city source.  "But look, we have rain, snow, and land free of aging hippies so we can build more electrical plants.  Those few key elements put us in a great position  to get on the news...and that's what we need to do.  Hi mom."

So it seems that for now, Global Warming has turned Iowa into the technology and biofuel capital of the world.  For these humble Midwesterners, used to news coverage only every 4 years, time are a changin'.  Now everyone seems to want a little piece of their globally warmed pie. 

**

Longing for Spring - Watching Golf on TV

I finally found something I do miss about California..and that's year 'round golf.  Watching the Pebble Beach Pro-Am made me salivate.  Of course most courses are nowhere near that level of beauty...but just the same I really want to play.  I know we're almost to March and things should be looking up weather wise around here.  Until then, I'll watch the flurries fall from the office window and train for the triathlon. 

Blogging can help you OWN a search term: Geographic Arbitrage

When you have passion for something, and blog about it, you just may author a definitive post defining that topic. 

Just recently, GOOGLE search results for "Geographic Arbitrage" have yielded me 1st and 6th place results.  The milestone that makes me most proud, is that I've surpassed the links from FORBES magazine, who's publisher...and author Rich Karlgaard, gave me the term in the first place in his book, Life2.0:  Finding the Where of Your Happiness. This book played a major part in my decision to execute geographic arbitrage in 2005.

In the last month, I've been linked to in various articles by some great writers.  This morning, I noticed traffic coming from this piece by uber author and blogger Anya Kamenetz

Her site and book are called Generation Debt

What's even more amazing to me is that I've been linked right next to author Tim Ferriss (The 4-Hour Work Week) one of my favorite works.  Ferriss is a big advocate of Geographic Arbitrage...or Taking a position of monetary power like cashing in a coastal house and moving to a more affordable area, working remotely with your larger coastal income while living somewhere inexpensive, or using currency differences to live like a king in foreign lands, etc.

Takeaway
Let this be an example to all business bloggers out there just getting started.  Are you ready to offer the world the defining post or two on a topic that you're passionate about?  Writing with regularity and passion may grant you "Pole Position"...and along with it, many more unique visitors, potential new customers, and implied authority that propel your business to its next level.

730 days in Iowa...Geographic Arbitrage Success

We've just eclipsed the 2 year mark here in this beautiful state.  During that time, I've been blessed with wonderful opportunities and met a fantastic group of people that have helped me shape the next chapter of my life. 

Executing my geographic arbitrage (moving from the high priced CA coast to the Midwest) has afforded me the option to explore what really matters, define what it takes to build a new infrastructure (both personally and professionally), and to dive into my "personal brand" and make some clear distinctions about it.

I cannot think of a better place than Des Moines, Iowa to live out the desire to have few hassles, no or low commute miles/minutes, no traffic, and just about everything a family could want to live and thrive. 

Thanks Iowa for a great first 2 years.

A Journey Back to the Heartland

I was contacted yesterday by someone from the Orange County Register News Paper, my paper of choice when living on the Left Coast.  Apparently I have a blog reader out there that found me and thought I'd be interested in this feature by Tom Berg called, "A Ride Back In Time to the Corn Fields".

The tale begins with Paul O'Brian, a Seal Beach, CA resident and successful designer trying to ready a 1935 Ford pickup for its trip back to Grand Mound, Iowa.  O'Brian's trek to the heartland is just something he had to do to reconnect with his father's legacy of values and work ethic.  Life sure wasn't easy back then, but the elder O'Brian set Paul on the right track with a steady dose of agrarian practicality and appreciation for what's important in life.

If you have family roots in agriculture, you'll surely appreciate this story.  If you don't, it will make you wish you did. 

Enjoy.  Thanks for finding an expat OC'er living the dream in Iowa.

Geographic Arbitrage Update

Are you considering a Geographic Arbitrage plan to abandon the higher price coasts for middle America?  Have your plans changed now that real estate has "adjusted" somewhat?

I'm VERY interested in hearing stories of folks that didn't pull the trigger on their moves and the fallout (positive or negative from it). 

We seemed to have accidentally bailed from CA at the peak of the real estate market.  Now however, I know many people (they look and act like you and me by the way) that are totally UPSIDE DOWN in their properties meaning they owe more than their house is worth.  Years of footloose refi's have left them with low interest rates (good) but no chance to move (bad if you want to).

I know that the Des Moines real estate market and Iowa in general will feel less of the pinch because our houses never did "explode" like the coasts.  Also, our economy is strong and growing at above average rates.  New jobs are being announced weekly.  But don't get me wrong, Des Moines will feel the crunch.  Houses do stay on the market much longer now...but prices aren't falling too much just yet. 

I believe that over the next 12-18 months we'll see the true nature of this housing slowdown/credit crunch manifest itself. 

The key has always been to not over extend oneself and while that may have prevented you from getting the new hummer and the boat with a home equity loan, you're probably a lot less concerned now with what's happening in the world of real estate.

Please share your thoughts.

Please welcome a new blogger to the family

After a lengthy diatribe over a cup of Sumatra...my friend and Des Moines area real estate investment guru Nigel Chapman has launched a Des Moines area real estate centric blog.  In this market, we really need this kind of information and commentary.
Please check it out here.

Like most converts...Nigel just needed to see what business blogging was really all about before committing.  I recited many "Mike Sansone'isms" and referred him to some key posts to brush up on tactics. 

A quick learner, Nigel has deployed his blog, used widgets, and has started contributing to the community by sharing his brain.

If you need real estate assistance as a buyer, seller, or investor, I highly recommend Nigel.  Please check out his blog and get to know him.  He's committed to the next summit in Sept.