Hi this is Diane Kennedy. Today is Day 16 of the 30-day Coundown to the release of my new book, The Maui Millionaires™ that I co-wrote the book with David Finkel. The book is scheduled to be released on November 3, 2006, and from now until then I’ll be checking in every day with a Wealth Tip excerpt from the book, written either by myself or by my co-author, David Finkel.
Wealth Tip 16: Master the Skill of Negotiation—it is one of the Most Important Wealth Skills you can Cultivate
Whether it be on the job as you are negotiating a contract with a vendor, or working through the specific pricing on a consulting contract you are offering to your number one client. Or even with a contractor who is giving you a bid to repair your house. The skill of negotiation is one of the highest paid skills around, and you will be paid handsomely for learning it well.
For example, my wife and I recently built a second home for ourselves. During the course of the construction our general contractor bought over $40,000 of building materials from a local vendor. I spent about 30 minutes total negotiating with that vendor over a month to give us a 5 percent rebate on all our purchases in his store in exchange for us giving him such a volume of business. This time saved us $2,000. Or take the case of a business deal I negotiated whereby a seller of a business I wanted to purchase sold me his interest in this multi-million dollar business for less than $100,000.
The skill of negotiation is what helps you buy a $500,000 house for $420,000. Or save $10,000 on the wedding you are throwing for your daughter.
In the business world the skill of negotiation has made me millions of dollars, and it can do the same for you. Imagine you are selling a business that you have built and are down to the final negotiations on price or terms. Or that you are hiring a new employee and are negotiating the compensation package. Or perhaps you are considering funding part of a real estate deal in exchange for a significant equity stake. In business and investing you negotiate at hundreds of times each year, with any one of those negotiations meaning a great deal of money, security, and freedom for yourself. This is why this skill is so critical for Maui Millionaires™.
So how do you learn this critical skill? That is the subject of our next two wealth tips (Wealth Tips #17 and #18, which you can read on October 18th and 19th) …