Gather support for the partnership from the organization’s employees. Keep the employees informed about what’s going on and why it is occurring. Point out how the partnership will benefit the organization. Talk about how it will provide job security by increasing marketing capabilities, opportunities for product distribution, and technological innovation. The employees need to support the partnership for it to be successful.

Once the partnering team for the initial activity has been selected, it is important to choose an initial project that creates a win-win outcome for all parties and has a good chance of success. An example of such a project is one undertaken by the Public Works and Traffic Division of the District of Columbia. The city government was in a state of chaos. Among the more evident symptoms was its inability to replace damaged and vandalized parking meters within a reasonably quick time frame. The city was losing thousands of dollars a day in revenue since people couldn’t drop coins into the meters. In an excellent example of a public-private partnership, the district formed an alliance with Lockheed Martin IMS to remedy the situation.

Lockheed Martin IMS agreed to take over maintaining and replacing city parking meters. In exchange, the city agreed to give Lockheed Martin a percentage of the total revenue collected. Each party won. Parking meter revenue began to increase, and the city’s image began to improve as the public perception of meter care improved. Things looked less run-down and seemed better cared for. Lockheed Martin began to turn a small profit in the deal and was assured of continued city contracts.

I see a clear parallel with business partnerships. The time we spend getting to know our partners will pay off in terms of more trust, less friction, and more productivity in the end. In the Initiate Stage of Partnership Development, we can plan to limit pressure by negotiating realistic timelines and defining ahead of time how we’ll measure our success. We can clarify what we want from each other up front and agree on our partnership mission. Like the astronauts, we can be clear about what tasks we need to perform. But we can also commit to developing the relationship with our partner as a prerequisite for success. In the Initiate stage, we start to move away from planning our partnership and toward the activities we created the partnership to accomplish. In other words, now we are ready to start a task.

When initiating your partnership, it is important to remember to keep the task and relationship activities balanced. Spending the time up front will result in exponential benefits in the end. In the first trimester of development, you want to spend about two-thirds of your time on relationship development and about one-third on task design. This is also true once you have identified your partner and are initiating an activity. It is important to build the relationship with the partnering team implementing the initial activity. The challenge at this step is to build a strong relationship between the partners while creating a plan for a successful task.

Emotional compatibility is not a statistic within a range that incorporates the entire population such as an intelligence quota (IQ). It is a matching process. In relationships, each unique individual is matched with another unique individual. There are many types out there. If you find yourself always with the wrong type, get help.

The same is true for investment compatibility. There are hundreds of asset classes. Step 1 discusses the emotional implications of all the major and many minor investment classes. Fortunately, if you find yourself incompatible with the stock market, the chances of finding better investment satisfaction elsewhere are high. In the case of Michael and Susan, once they work on their investment maturity, they will find many asset classes that suit them better than stocks.

It’s said that the Canadian Mounties “always get their man.” In reality, the IRS makes the Mounties look like a bunch of amateurs! No other organization in America has the ability to collect on unpaid debts like the IRS and government agencies. Not only that, they’re pretty unforgiving in terms of the penalties and interest they charge to people who don’t pay what they owe, when they owe it.

With a tax code that many accountants and financial planners struggle to master, there are hundreds of thousands of individuals who are caught off guard and unprepared by large tax bills. If you find yourself in this situation, it’s crucial to begin communicating with the IRS about eliminating this debt as soon as possible.

Modern risk management depends absolutely on modern mathematics. 7 In its absence, the ancients were as handicapped as mariners without a compass. The introduction of modern arithmetic allowed thought pioneers such as Cardano and later Galileo to develop the theory of combinations—essential for figuring the probability of outcomes when rolling dice or drawing cards. Here the modern concept of probability was born.

Though useful at the gaming table, probability theory was still not very useful for real world events. The theory of statistics was needed for that, and the first statistician might have been a Londoner, John Graunt, who studied the age distribution and the causes of death from bills of mortality in London parishes.

The primitive database (i.e., the church records) from which Graunt derived his study was itself an innovation and was less than 60 years old at the time of Graunt’s study, published in 1662. Databases would go on to become a powerful source of wealth and value, but that is another story. The astronomer and mathematician Edmund Halley extended Graunt’s work into an analysis of life expectancies, creating in 1693 a scientific basis for the valuation of annuities. Still, it would take nearly another century for a modern life insurance business based on actuarial data to evolve.

From a mathematical viewpoint, the remaining big step was the discovery of the bell-shape curve. Abraham De Moivre in the 1730s, using the binomial theorem,8 developed the concepts of the normal distribution and the standard deviation, the latter being a measure of the dispersion of the distribution about the mean. In Chapter 5, we relied on his formula, coded as NORMSDIST in the Excel spreadsheet program, to calculate Black-Scholes option values! And how did we calculate volatility? We used De Moivre’s formula for the standard deviation.

The chambers of commerce of many countries put on events all over the world to lure investors to their countries. In many countries, when you go there and reveal that you are an investor, you will be treated with respect and given a lot of support and assistance.

When you have invested in a country, you will often be treated like royalty and offered even more investments that may not already be publicly available. And when you have invested sufficiently in some countries, you will get invitations to advise them, joint-venture with them, or sit on their corporate boards.

What a sharp contrast to other professions! A few people have admonished me for suggesting investors look beyond their own borders, claiming that real estate is so complex, and that the laws regarding real estate are so involved, that it is difficult to keep up with the regulations in your own turf, let alone in a foreign country. Consequently, they claim, investing overseas is risky and foolish, and I am just grandstanding or showing off by talking about investing internationally.

Well, let’s consider a few alternative attitudes. First, few people living in the United States realize this, but the value of the U.S. dollar, when measured against a trade-weighted basket of currencies, has fallen in the seven years since the year 2000 by a massive 58 percent (as tourists traveling to Europe are finding out through the increased cost of a vacation there). In other words, if you had shipped $1 million overseas with the intent of investing it in real estate, but you never quite got around to making the investment, and today you repatriated the funds back to the United States, you would have more than $2 million. I have investors who took my advice and invested in New Zealand at a time when a United States dollar bought NZ$2.40. Today, that same NZ$2.40 buys over US$1.90. In other words, the value of their investment has nearly doubled without even taking into account how the investment in New Zealand has fared.

When you are eligible or required to take distributions, you can opt to receive either the entire sum or periodic distributions for the Rest of your life. You can also take in-kind distributions. The taxable amount, if applicable, is based on the fair market value of the asset at the time of distribution. For example, Babette’s and Peter’s Roth IRAs each owned a 50 percent share of a flat in London. Because they were prohibited to use it, they leased it. The rent was paid to their IRAs, which also paid for all expenses. But when they turned sixty-five, they each took their share of the flat as a distribution without tax consequences. Now they are enjoying living in it themselves.

If your IRA owns assets offshore, determining the fair market value is not quite as straightforward. If you have real property, you will need to get an acceptable appraisal and have the amount converted to U.S. dollars. In the case of cash, the value of the currency being distributed must be established on the date of distribution in U.S. dollars. For required minimum distributions, the fair market value of the account is determined as of December 31 of the previous year. This information needs to be reported to the IRS, regardless of whether the IRA is a traditional or Roth. When distributing an offshore asset, timing is important because of fluctuating exchange rates, so select the day of distribution carefully.