According to science, our brain does not have the capacity to process the information that bombards us daily. That is why it creates these shortcuts or cognitive biases. Our cognitive biases rule our behavior, especially towards our finances. On today’s show, Patrick Donohoe speaks about these biases from a financial perspective, foremost of which is the notion of retirement and why it is so appealing to so many. Get out of what you have been conditioned on so you can gain that financial independence as soon as possible and not have to wait 20, 30, or 40 years. Tune in to this episode to learn how.
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The Framework For Financial Independence
I’m grateful for this episode. We had to be reminded about the principles of freedom and independence. I thought I’d use this show to speak to that from a financial perspective. I’m going to be talking about a mental model or framework for financial independence. It’s changed my life and I believe it could change yours. At the end of the episode, I’m going to give you a tool. It’s a calculator that will help you quantify these ideas. I’m going to explain the different pieces of it.
First, I want to create some context. It’s fascinating to think about how science has made us all aware that our brain simply does not have the capacity to process the information that bombards us on a daily basis. It’s not able to keep up with how innovative society has become. As a response, the brain creates these shortcuts or cognitive biases. There are over 100 proven cognitive biases. The Visual Capitalist has an amazing infographic. It gives you an idea of how all of these cognitive biases are connected. What this tells me is that even if we want to be objective and assess a situation, scenario, opportunity or inner working with absolute objectivity, it’s not possible. Our mind has prevented that. Being aware of these cognitive biases is vital. The primary ones are, first, cognitive dissonance. It is what happens when we hear our exposed information is contrary to what we believe. We go to this carnal state. We come up with why our opinions are right and why theirs is wrong. At first, it feels unnatural.
The second is confirmation bias. It is looking for groups or friends that all essentially believe what we believe, think how we think, have the same opinions. The other is the halo effect. It is when a political figure, a sports figure, celebrity, gives an opinion about something that is not within their expertise, yet we still take it as if it were. Our cognitive biases, if you think about it, we all have them. It’s part of our survival mechanism. We don’t choose. It’s unintentionally created because we’re wired to survive. We are looking for things constantly that could prevent our survival. Look at 2020, we all went primal to some degree, at least I did a few times where things were chaotic, unknown, and whether it’s toilet paper, water or whatever, you still want a primal.
Financial Independence: Even if we want to be objective and assess a situation with absolute objectivity, it’s not possible because our mind is preventing that.
Our mind creates these unintentional frameworks, biases, perspectives. It results in what we think about the most. There’s a very strong set of perspectives and biases around the personal finance world. I’ve been in this world for decades. I’ve written a book. I’ve done hundreds of podcasts and concluded something. First off, there’s a biased toward this notion of retirement that’s what you should be doing. It’s where all financial behavior originates to some extent. Pursuing something for 40, 50 years as a career and not having to do that anymore. There’s a whole industry, trillions of dollars around reinforcing this idea. Whether it’s asset management, insurance, brokerages and you can point to all different advertisements that continually speak to this idea of retirement. For years, I criticized the qualified plans, mutual funds, perspective until I realized something. I finally considered why retirement was appealing. It’s appealing not because people want to retire. The definition of retirement is to be taken out of service, essentially become useless. Nobody wants to become useless.
The motivation and what creates the framework is people have this urge, natural desire to be free to not have to do things any longer. That driving force compels people to act. That is the path at least they believe is going to help them achieve that. I believe there’s a much simpler way. I know you were thinking, “I’ve saved for twenty years. I have all this money in the market. I’ve been successful. I’ve been successful in my career. I’m going to work another ten years and I’m done.” Some of you may be saying that and I get it. First off, I’m genuinely inspired by the dedication, energy, commitment and fortitude to achieve these ends because many people just don’t ever retire. It’s incredibly a frustrating series of events for people. There are those that do that ended up realizing it’s not what they thought it would be and ended up going back to work.
My discovery in this profession and ultimately become my mission is to inspire and motivate people to gain financial independence as soon as possible. Not wait 20, 30 or 40 years because we’re not promised that we’re going to survive or it’s going to be the same circumstances we believe we’re going to be in at that point in the future. There are lots of different perspectives and biases around this idea of retirement. I want you to step back and start to realize that we have these cognitive biases. They’re reinforced and unintentionally created. We operate our vibes based on those belief systems. This is why this tool that I was referring to before is important because it quantifies it. It puts something into math or something that’s more objective than an opinion.
You can access the calculator at TheWealthStandard.com/Calculator. You can complete it in less than one minute. What the calculator does is it gives you an outcome. That outcome is a date that you could be potentially financially independent. I’ve come to realize that financial independence is not a dollar amount, it’s more of a mindset. The mindset is most often created based on a couple of factors. Number one, you have investment cashflow. You have passive income coming in every single month. That pays either half or the majority of your living expenses. When you establish that, there’s still a gap. I believe that gap as far as from the outcome of independence and freedom, it’s filled by a profession, a career or meaning full work.
Work that aligns with who you are. It’s something that you love doing and you connect what you do with how you benefit others that are very high level. You come to this conclusion that you are meant to do this. It’s that type of meaningful work. I believe we’re all unique. We may not be operating or doing what that type of work is right now. That is where you start to pursue that type of work and find opportunities to do it, where you don’t necessarily have to work full-time but you work because you love it. You recognize it because you have cashflow and passive income coming in. You are not living to work. You are working and doing meaningful work in order to live. This engages these feelings of independence and freedom what I believe everyone’s after.
You don’t have to wait 20, 30 or 40 years. Many of the people I work with are able to do it right now. The fact that they know they can do it right now gives them this sense of freedom and independence that they don’t necessarily have to be doing what they’re doing. It is now a choice. What I encourage is to be open to these ideas. I know what you’re saying, it’s contrary to many of your belief systems as they stand right now. If you connect with the outcome of retirement, it’s freedom and independence. Consider the possibility that it is possible. That feeling can be achieved sooner than 20, 30 or 40 years into the future.
Financial Independence: The notion of retirement is so appealing not because people want to retire but because of this natural desire to be free and not have to do things any longer.
The parts of this calculator that are most important are you enter in your income or what you make on an annual basis, the investible assets that you currently have and then you use a couple of factors. The rate of return you’re getting from your assets. Also, it’s the establishing of a reasonable rate of return to gain passive income. When you have that number, usually we look at 50% of your current income as this freedom income which is doing meaningful work on your terms at 50% of what your current income is. When you look at the growth of your assets and the cashflow that would come from that plus 50% of your current income, that is going to equate to whatever dollar amount you have to earn on your investments and gives you a specific date at which you could potentially be financially independent. This calculator opens eyes.
By no means does it get down to every single detail of how things work but it gives you an idea of what is possible. When you realize that, you start to look at investments and work differently, what you’re doing for a career. That is the point of the calculator. It gets you out of what has been conditioned, what cognitive biases rule your behavior especially your financial behavior. It puts you into this position of, “There could be another way. Here is potentially a path that gets me what I want sooner.” I believe we live in an amazing era. There’s a lot of chaos. There is a lot that is going wrong and news, websites, social media point all of these negative factors out. That comes from this natural carnal state of wanting to survive. We’re always looking for what can hurt, harm and kill us because our brains are wired to survive thousands of years ago, not in our era. I believe, there are miracles are happening all around us if we’re aware whether it’s the innovation with healthcare, food, energy. There are some amazing things happening.
I believe that meaningful work, being able to connect who we are, we’re naturally gifted with the value creation for others in receipt of an exchange with monetary exchange. This is a level of living that is possible for more people now than ever before. At the same time, it is first the recognition that you have to make certain changes and do things that snap you out of what and why you’re doing it in to look at another way. TheWealthStandard.com/Calculator is a link to download this specific tool so you can see where you stand and how far off you are from financial independence. There are some other resources there as well. I hope you can take advantage of that offer. It’s free. No cost. Hopefully, you’ll gain a better understanding of what’s possible for you. I wish you a great week of celebrating and being aware of the principles of independence and freedom. I hope you get to spend it with people that you love. Have a blast. Until the next episode.
Is top performance something you’re born with or do you have to practice 10,000 hours to achieve it? If those are the only two choices, then most people would have given up on success already. But what if somebody said you could reverse engineer success and get to it quicker? Award-winning organizational psychologist and nonfiction author Dr. Ron Friedman goes one step further. In his latest book, Decoding Greatness, he argues that we actually reverse engineer top performance all the time. The missing key is being intentional about it. In this conversation with Patrick Donohoe, Ron explains how his book and the free course that goes along with it teach us how to emulate what the greatest thinkers and doers in history have done to carve their own path to success. Do you think you’re not born with enough talent to make it? Is practicing 10,000 hours too much of an investment for you? Tune in and learn why you shouldn’t give up on success just yet.
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Decoding Greatness: Reverse Engineering Success With Ron Friedman
I have been studying mental models and information frameworks. The reason being is I’m learning that more information is not beneficial to people. Our brains are designed to survive. They’re old and have not evolved to the point where we’re able to properly evaluate and understand new information, especially as it relates to making progress. Our brain forms these shortcuts that allow us to make sense of things, but they are cognitive biases, preventing us from understanding new information and evaluating new processes. These mental models and frameworks are a more conscious and intentional way of understanding new information. More information without these mental models and frameworks will go in one ear out the other. We will continue to reinforce what we already believe and understand, which prevents us from getting what we want. I’m going to speak to that more in more detail on the next episode.
In this episode, I have an organizational psychologist joining me. He has a new book out that we discuss. It is an informational framework that you will want to know about. Dr. Ron Friedman is an award-winning psychologist. He is serving the faculty of the University of Rochester. He has consulted political leaders, nonprofits and many of the world’s most recognized brands. He is published in multiple newspapers, The New York Times, The Washington Post, The Guardian and magazines like Psychology Today and the Harvard Business Review. I can keep going on and on with his accolades.
He founded an organization called Ignite80 which is a learning and development company that translates research in Neuroscience, Human Physiology and Behavioral Economics into practical strategies that help working professionals become healthier, happier and more productive. The 80 out of that company name is based on studies that have been done that show the percentage of employees who are disengaged at work.
His new book isDecoding Greatness which is a way to reverse-engineer success and apply it to your specific life. It’s a great mental model or information framework. You should pick up the book. There is also a website that you can get access to. The access is a free course. All you have to do is buy the book, take a picture of the receipt and then upload that to a link that is available on DecodingGreatnessBook.com, which will show you how to apply this information framework or mental model to your life to gain even more success. Thanks for supporting the show. Enjoy this interview with Dr. Ron Friedman.
Ron, it’s awesome to have you on. From your background, you’re a voracious reader and intellectual. You’ve already written one book. I’m excited to interview you. Thanks for taking the time. Welcome to the show.
It’s my pleasure.
I thought it would be helpful to start with what led to the decision to write another book. You wrote a book in 2014. Writing another book is quite an endeavor, especially Simon & Schuster being your publisher. What led to that decision?
Decoding Greatness: How the Best in the World Reverse Engineer Success
I love reading. One of the best ways I can apply reading academic journal articles is translating that into plain English so that everyone has access to the insights. That’s the genesis of my first book called The Best Place to Work. In that book, what I did was I took over 1,000 academic journal articles and translated them into plain English so that regardless of whether you’re a CEO or someone starting out, you had access to the latest science about how to elevate your performance and create a great workplace. My background is in Social Psychology. My experience was I left academics after teaching for a period of years and I joined a polling firm. My job was to measure public opinion, figure out what customers believe and how we shift those opinions by applying psychological principles.
In that experience of being in the corporate world, after having studied top performance in the lab and writing about it in academic journals and book chapters, what I discovered was that there’s a massive gap between what science knows and what business does. I wrote a book that showed organizations how to become great workplaces, but there was something missing from that first book. What was missing is that even within the best organizations, there’s a range of performance levels. Some people are top performers, others are not. The question was, “What are top performers doing differently?” That became the focus of Decoding Greatness which identifies a particular skill that they have that is learnable to all of us that we can then use to both accelerate our abilities and succeed faster.
How would you characterize we? You put us in a group as far as how we succeed faster. Who’s the person that was in your mind as you were writing?
I’m thinking about business professionals who do work that involves some level of creativity and that’s about any kind of knowledge worker. If you think about creativity, the prototypical thought that comes to mind is artists or poets but creativity at its core is about problem-solving. We all need to be creative in the way that we approach to solve problems. If your job involves any problem-solving or creativity, this is a book that’s going to show you how to succeed faster.
How would you characterize the obstacles? What was in the way of those who were in these creative leadership positions? What holds them back?
This is the big idea of the book. If you think about the stories we’ve been told about how people succeed they fall into two camps, the first story is that greatness, top performance or success comes from talent. The idea is we all have certain inner strengths that we’re born with and the key to finding your greatness is to identify your talent and then find a field that allows your innate strengths to shine. The second story is that greatness comes from practice. This is the Malcolm Gladwell story, 10,000 hours and practice. Eventually, you will elevate your skills and get to a higher level of performance but within knowledge work and work that involves creativity, thought and problem-solving, there’s a third story. It is one that people don’t often talk about but it is a remarkably common path for artists, entrepreneurs and inventors. That path is reverse engineering.
Reverse engineering simply means finding examples that are the best in your field and then working backward to figure out how they were created and how you can apply them to create something entirely new. Within Silicon Valley, this is an approach that is very well-known. This is how we got the personal computer, laptop, mouse and iPhone but it’s also how Stephen King and Malcolm Gladwell learned to write, Pablo Picasso and Claude Monet learned to paint and people like Judd Apatow learned to write comedy. Reverse engineering turns out to be a lot more common than anyone had ever realized. It’s something we don’t often talk about. I wanted to bring it to the fore demystified and show people how they can apply it in their lives to become more successful.
You, as a psychologist, the specialty and understanding what makes people tick and why do they do what they do, you have to look at the two primary stories that you referenced. Those stories have been recurring over again. With psychology, we’re designed in a sense to develop habits. We keep doing things the way we’ve done them and it’s hard to break those habits. What are typically the events, feelings and experiences people in the camp of repeating those stories thinking that’s the road to success? What do they have to experience in order to be open to a new story?
There’s some truth to both of the stories. I’m not suggesting that talent or practice doesn’t matter. Both of those things matter. The challenge with those two stories, however, is that they’re not the only paths. More than that is we’ve been told these stories for so long that they’ve become problematic from the perspective of, “If I don’t feel like I have talent or ten years to invest in practice, then I capitulate.” I’m like, “Greatness is for somebody else. That’s not for me but this is a faster way to learn.” Part of the reason this has remained under the radar for so long is because we’ve been taught that if you study someone else’s work too closely then you’re going to copy their work, hack and there’s something wrong with you.
The truth is that’s how learning happens. We study others, figure out what their model is and then find a way to make it our own. To be clear, this isn’t about copy because even if you do copy, chances are you won’t be successful. The reason you won’t be successful is, let’s say I figured out what you’re doing on your website, I steal it and making my own. Some countries do that. They copy products and intellectual property. It’s not what we’re talking about. What we’re talking about is having an analytical framework for understanding why something works. To follow through on that example, if I copied your website, am I going to have the same revenue as you have? No, because there’s going to be a mismatch between my expertise, experiences, personality and your execution, number one. Number two is that audience expectations shift over time.
I gave an example in Decoding Greatness of the book Twilight. Everybody remembers this book. It’s about a teenager falling in love with a vampire. After Twilight came out, there was an explosion of young adult books about kids falling in love with vampires and they all failed. It wasn’t because they were all terrible. It was because audiences were familiar with the formula and were bored by it. What worked was a few years later, Abraham Lincoln fighting vampires. That exploded because it evolved the formula. That’s what we’re talking about. It’s figuring out why something works, identifying the different elements that make it unique and then combining it with other elements to evolve it in a new direction that allows you to be more successful by leveraging something that was successful in the past but also evolving it to make it consistent with your actual strengths.
What comes to mind as you were giving that example is that directly copying something is prone to failure. At the same time, there’s a framework such as a hero’s journey that is evident in so many different movies and books, yet it’s this very similar if not the same framework that then could be applied to what you were referencing before, the uniqueness and individual creativity of somebody.
I’ll tell you a story that builds on that. This a story in the first chapter of Decoding Greatness about Kurt Vonnegut. Everyone has heard that name. He is a very famous writer. What Kurt Vonnegut would do for fun is take stories and turn them into pictures. What I mean by that is he would graph them out where on the X-axis at the bottom from left to right was time from the beginning of the story to the end of the story. On the Y-axis from the bottom to the top was the trajectory of the protagonist’s fortune. Meaning, “How are things going for the main character? Are things good or bad?” As he did this what he realized is that if you take all the stories ever told, there are six basic stories. One of them is the hero’s journey. He called it the man in a hole.
The other thing he realized when he did this was that a lot of the stories that we have fallen in love with we don’t realize them but they’re the same story. They have different characters. He gives the example of Cinderella and compares that to Annie. If you think about it, it’s the same story. At the beginning of the story, both Cinderella and Annie are in a bad place. Annie is an orphan on the street. Cinderella was being abused by her stepsisters and stepmother, then something good happens. Cinderella gets invited to the ball. Annie gets rescued by Daddy Warbucks then something bad happens. Annie gets taken by people pretending to be her parents. The clock strikes midnight. Finally, they both live happily ever after by being reunited with the person they were meant to be with all on. It’s the same story. We don’t realize it.
Reverse Engineering Success: A lot of the stories we have fallen in love with are the same story. They just have different characters.
Years later, computer analysts took thousands of movie scripts, Broadway shows, novels and looked to see what the patterns were. What they found was, analytically, Vonnegut was right. There are six basic stories. Once you know those formulas, many things become clear. For example, Harry Potter is a book that we all love. The movie is great. When you read it, it’s so easy to be enchanted by the characters, setting and storyline. When you step back and analyze what’s happening, what you realize is, “This isn’t the first time I’ve heard of an orphan who is living with his aunt and uncle who has whisked away on an adventure to find an evil villain and discovers their secret powers. There’s another story like that and it’s calledStar Wars.” That doesn’t mean that JK Rowling’s work isn’t creative, entertaining or remarkable, but when you recognize that there’s a formula at play, that empowers you to create your own unique fit.
That’s why I wanted to go off on that tangent again. It’s the idea that there are these formulas out there that you can copy using the word you used before. It doesn’t mean that you’re not creative or unique. A lot of it is Psychology. You can have a lot of psychological background as to why these stories lead to a successful outcome. Let me get into the third story that you’re talking about, reverse engineering. What is that formula? How can somebody take that formula and apply it to their uniqueness and creativity?
What I love about this is that it is applicable to any field. Regardless of what you do, there’s a way that you’re going to be able to apply this. It is distinct to the particular field. To give you some examples, I’m a writer. Non-fiction writers will often go to the back of the book to the bibliography to see, “What are the sources that went into creating this book?” Chefs will order dishes to go. They’ll take an intricate sauce and line it up on a white plate. Sometimes there’s a magnifying glass involved and they’ll look to identify, “What are the ingredients that went into this dish?” Photographers will look for clues that are hidden within the image. For example, they’ll look at the reflection in the eye of the person in the image because that tells them where the light source was placed. They look at the length of the shadows that tell them the intensity of the light.
I don’t do that because I’m a novice but experts have these techniques that they use to work backward and deconstruct how something was created. The critical thing is to think about don’t passively enjoy something when you come across it, whether it be a website, well-written email or presentation deck that you found impactful. Take a step back and think about, “What’s different about this example? What can I learn from this? How do I apply this to the thing I’m working on?” To make this concrete, the first step to reverse engineering is to become a collector. What I mean by that is to start your collection of works that you consider remarkable. When we think about collections, we think about physical objects, artwork, wine or stamps. That definition is way too narrow. Collections extend to knowledge work as well. Designers collect logos. Marketers collect websites. I’m a writer. I collect powerful words, stories, academic articles and sometimes I look to pair them up, “What’s a good story that connects to this study?” That’s the key to supercharging your creativity.
Also, once you have that collection, you can start comparing what’s in that collection versus what didn’t make it. That process is like playing Spot the Difference, which we played as kids. We got two images side-by-side and compare them, “What’s different about this versus the other?” That’s what you’re looking to do here because of that process of getting analytical about, “What’s different about this?” example, once you do that consistently, you can’t help but identify the ingredients that made it successful and you’re forcing yourself to think on the blueprint’s level. You’re not thinking about like, “What’s happening on the word level?” You’re zooming out and looking at the totality of a piece. That’s where you start identifying patterns.
Let me take a step back when a person goes in and decides, “I’m going to start identifying patterns outside of what I’m doing to lead to more success.” It’s typically because they face some chokeholds, disruptions or challenges. Talent and effort only got them so far. The frustration of not being able to get to the next level typically in my experience at least leads to, “I need to find another path.” This next path is, “I’m going to go and reverse-engineer the successes that I see whether it’s at the macro-level or micro-level like a website, book, movie or leadership style.” When you’re reverse engineering this, what’s the other part of the formula where someone is able to extract the ideas and then apply them to their particular situation?
First, if you’re waiting until you’re in a bad place, that’s too late, you got to do this all the time. This is a mindset. This isn’t about a one-time shortcut or fix. We talked about starting a collection. You need a process. That process should be easy for you to use so that you use it. If it’s not easy, you’re not going to do it. For me, it could be bookmarking things. I can put things into Google Docs. Some people like to use Pinterest. You need a process that allows you to dump it somewhere quickly so that you don’t have to think about it but then you have that option to revisit it later on.
You asked, “What becomes the process for using this?” The answer is once you’ve started analyzing what makes things unique, you can create a template. I like to use the word templatized. It’s not a word. It should be a word because you can take a well-written email and figure out what’s happening in each of the paragraphs. I call this reverse outlining. Outlining is when you bullet-point what you’re going to put in a finished piece. Reverse outlining takes somebody else’s finished piece and then works backward to create an outline of what is happening in terms of order and chronology. Once you do that, you can create a template for yourself.
I’ll give you an example of how I learned this. This is how I came across the idea of reverse engineering and what initially sparked the book. In graduate school, I needed to write academic journal articles in order to get a job as an academic. I didn’t know how to do it. It was a painful process. Nobody taught me how to do it. There was no course on how to write academic journal articles. Everyone was supposed to go figure out how to do it themselves. For a long time, I was stuck. Until one day, I decided, “Instead of trying to stare at a blank screen and try to come up with it, I was going to take some other academic’s work, bury myself in it and read one article after another. Because this guy was a great writer, I wanted to understand why he was great.”
Through that process of reading one article after another, what I came across was a formula and it was apparent once you had read every article one at a time in a row. What you would discover is that he starts off the article by posing some startling facts, something that was surprising and eye-opening then he would pose a rhetorical question, do a literature review and then present his thesis. That was the formula. Once I knew that I had a template for writing academic journal articles. All I needed to do was find my startling fact, pose my rhetorical question, do my literature review and then present my thesis. That was my approach to identifying his formula.
Once I knew how to do that, I realized that I had an approach that I could use for writing anything. It’s how I wrote my first book proposal, book and presentation decks as a consultant, finding great examples, working backward, creating a template and then applying it. When I would share with people what I was writing in Decoding Greatness, if they were a creative professional, invariably the reaction was the same, which is, “I’ve been doing that all my life and never read about it. I didn’t know that was a thing.” The intention in writing this book is to show people, “This is how the top performers are doing it and how you can apply it to create your marketing materials or whatever it is you need to create, this is an approach that can help.”
Something is coming to mind and this may seem somewhat bizarre. Elon Musk has praised this idea of reasoning by first principles and talks about what first-principles thinking is versus how most people think which is thinking by analogy, taking what already exists and applying that by slight variation. How does reasoning by first principles differ than reverse engineering? Are there some similarities and harmony with those two ideas?
Reasoning by first principles is breaking something down to the primary purpose. If you look at Tesla, Elon Musk says that the first principle that led to Tesla’s success was creating a sustainable battery. If you go to SpaceX, he says that first-principles thinking led to being able to recycle rockets. It leads to this fundamental baseline idea. It wasn’t taking the electric car that already existed and improving it. In a sense, it’s reverse engineering. That’s why I’m asking the question, breaking it down to the fundamental principles and reasoning up from there.
I want to distinguish between reverse engineering as figuring out how person A created something versus reverse engineering as figuring out how I can learn from that thing that he created and recreate it myself. My focus is more about how I can recreate it much less than what was their intention or how they went about it because that’s irrelevant for me. What I’m more interested in is how I can build my skills. That’s the way I look at it. For example, I might be able to give you an analysis of Barack Obama’s speaking style or how Malcolm Gladwell writes. In the book, I reverse-engineer the most popular TED Talk of all time. It’s Sir Ken Robinson. I show you what he’s doing differently versus everyone else. I’m not interested in how he wrote it. I want to understand what makes it work and what I can learn from it.
Reverse Engineering Success: The first step to reverse engineering is to start your own collection of works that you consider remarkable.
That’s where I see a harmony between the two ideas. That’s what I was trying to get to because it’s not necessarily using words or body language. It’s not the specific point but it’s more of the framework and the outlined idea that is general enough but not specific to exactly what they were talking about. Your book goes through a lot of this. As you look at what makes people tick, everyone wants to be successful but people aren’t. Some of it is the unwillingness to change because it is too hard.
It provides again that third path which I like. It’s not to discount necessarily paths 1 and 2 because there’s still relevance there but this is path 3, which is more of a shortcut. It’s the ability to find what’s already successful and the commonalities so that you can be successful. Number one, what are some examples that you’ve seen based on this work that led you to believe that this was the truth? What have you seen as failures of a person not able to take these ideas and apply them to their situation? It’s important sometimes to identify the successes but also, if you don’t use it, what’s going to happen?
We talked about Vonnegut as an example. He’s a prime example because it’s a real creative field. I’ll show you ways in which other people have applied this in a way that perhaps is different than the way you’re thinking. One of my favorite stories in the book is the story of Barack Obama. Most people don’t realize this. When he first entered politics, he was a little bit of a disaster. He got trounced his first race for Congress. He lost by a margin of more than 2 to 1. The problem, if you can believe it was that he was a terrible speaker. He was a law school professor. He was used to talking in abstractions and lecturing students. Voters do not like to be lectured to and they let them know when it came time on Election Day. He was lost for a while, broke and thinking about leaving politics.
When someone in his campaign staff said, “Why don’t you take a look at what pastors are doing at the church and how they’re engaging their listeners?” He came back a little while later and all of a sudden, his speaking style was transformed. He was now telling stories from the Bible, using repetition and inflections on certain words. He was modulating and his tone was slowing down at times for effect. That approach transformed him and the rest is history. What I love about that story is that Barack Obama didn’t go and find his talent. He didn’t spend 10,000 hours practicing. He looked at what was working in a different field and incorporated it into his approach. That systematic approach of looking around at other fields not what’s going on in your industry turns out to be critical. It’s to identify and spot the difference, “What are they doing differently? How do I apply this to my field?”
Another great example of this is The Doors’ Light My Fire. When you hear Light My Fire, it sounds pretty different. When you look at the story of how that song was written, initially, they came up with a song that was rock and roll. Some people in the band didn’t like it. They called it Sonny & Cher, which at that time was a way to dismiss something as not being unusual. It’s mainstream and lame. They decided that they were going to riff on this rock and roll song by adding elements from other genres to make it a little bit different. They added bossa nova to the beat and baseline. They started the song by riffing on Johann Sebastian Bach. Those different musical elements are combined to create something that was completely unique.
It was by looking at what was going on in different genres and combining the elements. That’s how creativity happens. “What happens when you don’t do this?” The problem is that we think that creativity is about thinking deeply and going inside, but that’s not how creativity happens. Creativity happens by looking at what’s going on in other fields, genres and combining the elements that are working into unique and novel combinations. We’re often told that practice is the way to get better, but the problem with that formulation is that outside of sports, you can’t practice an idea you’ve never considered. If you are looking inward and operating within intellectual blinders and if you want to get better, particularly in knowledge work, if you’re working in any white-collar job, the only way to get better is to study others and figure out why it is that their work is successful and how you can apply that to your work.
What goes through my mind is people are naturally inclined to be creative. It’s the formula for expression. There is no formula. People try to express themselves in different ways, and it doesn’t work. This is ultimately a formula so you can take that unique creativity and have the formula to express it successfully.
To make this concrete, let’s say you’re a real estate magnet reading this and you want to start a podcast. You have a formula you could potentially use by the one that’s used here or you can listen to other podcasts and figure out what you like about those podcasts and what makes them different. You can combine those elements and use them with your expertise to create something that is brand new that allows you to express your ideas in a completely new way.
The alternative to this is to find your talent. What are you good at? Think about it for yourself or practice. By the time you have practiced your 10,000 hours, no one is listening to your podcast because you were terrible the first 10,000 hours. You’ve got to get it right out of the gate. The way to do it is by reverse engineering what’s working for other shows. Maybe figuring out what other genres or forms of entertainment capture your attention and see what’s working there.
In my case, I’m a writer. It would be easy for me to say, “Gladwell is the most successful writer. Why don’t I figure out what he’s doing and apply that formula?” That’s not going to work because many writers have tried that. His work is now popular. People are aware of the formula. It’s not going to work if you copy his formula. In my case, what I have found as a reader is that I don’t have the patience for long stories. I like quick stories that get right to the action item. I embrace that about myself.
In my book, I’ve got hundreds of stories about both celebrities and business titans that show you why what they’re doing is working and how you can apply it. That style is a little bit different because it’s quick and action-oriented but I embrace that about myself as a reader and I’ve emulated that. I made it concrete as a writer and executed against it. The point here is not simply to copy blindly. It’s to be more sensitive to why something is successful, listen to your preferences and be methodical in bringing that to life.
Ron, this has been awesome. I’m learning a lot and looking forward to reading/listening to your book. Any final words? There are some definite nuggets of wisdom in this interview. Anything else you want to leave the audience with?
I want to emphasize something we said, which was that the stories that we tell ourselves about success matter. If you have assumed that you don’t have the talent or the 10,000 hours and therefore it’s too late for you to either switch careers or try something new because it’s never going to happen, I want to urge you to rethink that. This book is going to show you how to get there faster by learning from the best. All you need is a methodical approach to learning from the best so that you can accelerate success. That’s what Decoding Greatness allows you to do.
Especially these days, there’s so much information and media. There are so many ideas out there, people’s attention and capacity to learn is almost in this state of inertia. They’re looking for shorter ways and those nuggets. I like how you’ve broken it down into simple terms.
One of the strategies in the book for evolving formulas, in other words, we talked about if you take a formula that’s working and apply it to yourself, you’re probably going to fail. You want to evolve it somehow. One of the formulas for evolving is willful ignorance. What I mean by that is deliberately not listening to all the podcasts and not reading all the newsletters everybody else is listening and reading to because by tuning out the same influences as everyone else, you will have different ideas than everyone else. It’s about being very deliberate about what you consume and combine those elements with the best practices in your field. It’s all about intentionality and having a method. That’s what I’m trying to help people achieve.
Reverse Engineering Success: The stories that we tell ourselves about success really matter. If you just assumed that you neither have the talent nor 10,000 hours to practice, you need to rethink that.
There’s a power with vulnerability and authenticity. It’s one of those first turning of the lock of creativity or at least the expression of creativity happens. It’s well said. Thank you for that final thought. Ron, it was awesome to meet you. Thanks again for being on the show. How can readers learn more about you? I know your book is on Amazon and Audible but do you have another material website? Are you on social media? Give out some of those links so that people can follow you.
If you’re interested in the book, you can get it in any bookstore, but once you do, go to DecodingGreatnessBook.com and send us your receipt because we will send you a free course on how to apply the strategies. You can also find me at RonFriedmanPhd.com and at my company website, Ignite80.com. The reason it’s called Ignite80 is because over 80% of employees are not fully engaged at work. The mission of Ignite80 is to teach leaders science-based principles they can use to help elevate people’s productivity, performance and make them healthier, happier and more successful.
We’ll have you back on to do another episode on that. Ron, you’re awesome. Thank you for your time. I appreciate it. It’s great to meet you. Good luck with your book.
As the world becomes more and more digital, the arrival of a fully technological future is at hand, if not already here. Critical thinking will be centered on the absolute reasoning of math and the logical conclusions of science. In this final part of Patrick Donohoe’s interview with Todd Langford of Number Analytics, they focus on the evolution of collective knowledge as time goes on and with society always moving forward. Todd emphasizes the undeniable role of the ever-advancing technology with how people consume information, focusing on the rapid ability of humans to learn thanks to the many digital means today.
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Todd Langford: The Relationship Of Math And Science Towards A Technological Future
What would be true for you if optimism led to everything youwanted out of life? Pessimism is easy. In my experience, it only gives you the scraps of life. Optimism engages your creative muscles. It brightens your vision and it motivates action. I love the saying, what’s wrong is always available but so is what’s right. Now to the last segment with Todd Langford and the series of The Truth About Money.
It’s a discovery. It’s not a creation. Math was always here. That’s like saying, “Since we discovered gravity, that’s a human creation. From now on, I’m not going to believe in gravity anymore.” Good luck with that one. We’re all going to experience gravity exactly the same way. There are certain laws in nature that exist and they are absolute truths. Math is one of those. When you start to confuse those, it was interesting that the same article about Relativity by John Messerly that I was talking about. He put this article out there and then somebody came back with the rebuttal who didn’t believe in absolute truths that said, “To take that same 2+2 formula with a module is 3 and the answer is 1. You changed the facts.”
The math is still there. You can change the facts all you want to. Another example from the same guy. He was talking about relativity. He said, “I can’t just declare that I’m a poached egg. I may believe that, but that didn’t make it so.” This guy that responded said, “If you were wearing a poached egg costume in a play, then you would be a poached egg.” No, you would not be a poached egg. The difference is we can change. We have biases on different pieces but there are absolutes that are absolutely true. Math is one of those. Have we had some faults with the math? Yes, because the assumptions were wrong. Not because the math was wrong. I think this idea that we have Mathematicians being willing to give in on that makes me think that we’re in a strange place. If math has gray areas and we have all the facts, I think we’ve got some problems.
Technological Future: People have a bias on different pieces, but some absolutes are absolutely true. Math is one of those.
It goes to this separation. You have the non-constant environment that exists, which is always changing. It’s always evolving. I think human biases are always evolving and changing. When you start to mingle the two, that’s when you get into problems. You have to separate the two of them, both the math, the logic and the evaluation tools, and the environment that is being evaluated. It’s the idea that physicists have proven time travel but the environment doesn’t allow for time travel. We’d be time-traveling. It’s this idea of separation and recognizing that there are some objective constant tools to evaluate that have been discovered. The environment that they are used in is constantly changing.
This is especially true probably in financial mathematics. Whenever we’re using financial mathematics, again, the math is absolute but the environment is not anywhere close to being absolute. That’s why people have that breakdown where they say, “The math is not right. It’s relative and can move around.” It’s not the math that moves around. It’s the assumptions that support the math that move around and that’s going to be constant. The rate of change is accelerating and technology drives that. It’s something that we all want. It’s an interesting yin and yang from the standpoint of everybody wants what technology offers and everybody hates change. The thing about it is technology drives change.
It’s absolutely something that’s on the same path. If we don’t accept change and understand that change is what we have to do to get the good that we want from the other technological things that happen, we just got to get there. It’s funny to hear people say, “The good old days.” Really? The good old days? Back when you had an outhouse in the back behind the house? That’s not the good old days to me. I like what technology has gotten to. I think we’re living in a fantastic time. We’re in a timeframe where the ratio of poor people by other countries standards doesn’t exist here in the United States. When we see is what we have and we appreciate that piece of it, we’re headed in the right direction.
It goes to the notion of separation and not mingling. It’s the environment accepting that as a truth,that progress and growth almost seem like it’s a principle of life. It’s always going to happen. People are driven to do that. It’s the ability to evaluate and make sense of it, which is where the role of math and maybe even science. Is that factually accurate or is there another way of looking at science? Is it science that’s evolving or is it the environment that’s evolving, and science is merely evaluating it so it seems like it is evolving as well?
That’s an interesting way to put it. What happens is our level of knowledge increases as we find out things that we didn’t know that we put in the assumptions that were not correct, if that makes sense. I’m going back to my analogy with the ships. Four ships went out and then came back. Clearly, the Earth is flat. With time, we find out we were flawed in our calculations here. It’s not that the math is off. We still sent out four ships and none of them came back. The math was right but the assumptions in the model were wrong that the Earth was flat. They calculated and went too far. Something else happened to them along the way. We evolve in time and we learned that the assumptions used in the equations were wrong. Not that the equations were necessarily wrong or not that the results of the equation that we had were wrong. Maybe the equation is wrong but the answer was right based on what the equation said. Math is a constant. It’s just that there’s so much that we don’t know yet. We’ve come a long way and why is that going to stop? Every generation has thought, “We’ve reached the plateau. We know all there is to know.” We can look back a few years and figure out that’s not true. They’ve always been able to do that. Why do we think that’s not going to happen in the future?
There’s this assumption that all knowledge is essentially going to be achieved. Some people operate with that assumption. It’s been proven time and time again. Is it a false assumption to assume that knowledge will continue to expand? It’s still an assumption. It’s not absolute but history proves that it’s highly probable.
Technological Future: When your level of knowledge increases, you find out things you didn’t know are put in incorrect assumptions.
Think about where we’ve gone to. At some core, we probably know that that’s the truth because we’ve decided that we can’t learn fast enough which is why we have to have computers and other places to store the stuff that we can’t maintain our brains so that we can still experience the growth and knowledge without having to retain it and do it personally. We’ve already figured out that it’s bigger than what we are.
Already as you said and it’s already there. That’s where the acceleration takes place and going to an assumption is not absolute. It’s highly probable based on human nature but the sustenance level is going to continue to come down. Life is going to get easier. I was having a conversation regarding Starlink, which is Elon Musk’s company that is going to be providing internet. Satellites are very good internet connection relative to what people have in parts of the world where the infrastructure doesn’t exist. That right there is going to accelerate learning among a lot of people that right now are not able to leverage technology. They can’t communicate the way we’re communicating. They can’t have this knowledge being processed in certain ways and have access to that to accelerate their lifestyle.
I believe that the world is going to take off in a sense and it’s exciting. At the same time, it goes to this point of the future is going to be different from the present in so many ways because it’s happening exponentially. If our assumptions right now as far as what it’s going to take to achieve a meaningful life are based on a certain set of assumptions, those assumptions are going to change. The costs and experiences you wantare going to change. The biases that human beings have are going to change. That’s the evolving and exciting piece. The role of math, science and logic is simply to evaluate and explain it.
This is where beliefs come in. This is not the truth. I’m going to talk about a belief. That discipline is going to become a critical piece of moving forward because right now anybody can coast. Technology has got to a place that we can pretty much coast. We can waste time, mental effort and not starve to death. Because we don’t have that drive that keeps us on task, we have to have the discipline to continue to do that, to continue to feed our mind with stuff, try to grow and figure stuff out because we don’t have to. In today’s society, we can kick back and that’s where death occurs. It’s when everything becomes about entertainment and nothing about what’s important. We separate ourselves from everybody around us. We start to rely on email and other pieces for our communications, and talking to people and finding out what drives them. It’s that relationship that disappears. It’s the discipline that has to step in and say, “All this other stuff is taken care of.” Nothing is critical anymore. I have to stay on task because that’s tough.
It’s agility as well. I look back on COVID-19. In quarantine, our office completely shut down. I was used to traveling and going to events and doing things at least a couple of times a month. Everything ceased. I’ve been in the office number of times. It’s a massive office with nobody here. I rode my bike during the summer into a city where I didn’t see cars on my way in. Nobody was here. I came to this empty place and business was amazing because you had people at home, we were able to be agile and have all of our employees work from home, and our expenses went down.
Everything was amazing because of how our business rhythm is set up. I found myself with nothing to do for many days. I was unhappy and miserable. It didn’t matter what was going on right here, there and elsewhere. I would consider things that were successful. The meaning I attached to coming in, being with people, going to events, learningand expanding my knowledge. Everything had been disrupted. It took me but it didn’t take that long. I had to come to grips with that and find meaning elsewhere. The same thing is going to happen, not to that extent. That was very abrupt butthere’s going to be technology that makes life even easier than it is now.
Technological Future: It is hard to recognize your unique ability because human beings think everybody else is wired.
I believe that there’s still a drive inside of people to survive, earn a wage, pay the bills and put food on the table. People find meaning in the ability to do that, which I totally understand. When that’s taken care of or it takes 10% of the effort to do that, you’re not going to experience the same meaning from it. Therefore, it’s this constant evolution of expanding, growing, and it’s the awareness of it. Discipline is a relative term. Discipline is to be aware, to be agile and to constantly seek growth. I believe that is within all of us. When you’re not growing, you’re dying. I’m sure that there are lots of ways in which we can evaluate that. There is the Second Law of Thermodynamics. There are some physical laws as far as growth, transformation and evolution that can be measured and evaluated. I believe that you’re going to have to be more agile because the change to the environment is going to happen at a much quicker pace.
What’s cool about that is the opportunity for more time has been given to us because of technology. What’s also been given to us by technology is the ability to learn anything you want to learn. You have at your fingertips with the computer and the internet. You have to siphon through the garbage that’s out there because there’s a lot of untruth stuff but if you apply it in your brain to look at the logical side of things, see what makes sense and what doesn’t and follow that, any idea you have, you can follow that. You can improve who you are mentally by taking some of that time that’s been given to you and invest in your own education in whatever area it is. You can become the professional that we talked about pretty easily with the amount of data that’s out there if you’ll spend the time with it and have some drive in that area. Find something that you like.
That’s one of the downsides of the old model prior to what we’ve seen in many years. That is, “I go to work in this place. I decided when I was a kid that I’m going to do X because that’s what my dad did. I hate this. It didn’t drive me but at 5:00 I get to go home every day and that’s supposed to be fulfilling.” Now you have the ability to do whatever it is that you want to do and make money at it if you just think through it. It comes back to what we were talking about the two-fold idea. You can learn something and make money doing something that you like. Wouldn’t that be cool? We have the opportunity to do that and you can do it part-time, which is even better. You don’t have to quit what you’re doing, which is providing for your family, to go down a different track. You can educate yourself on that other track while you’re earning a living from something that you don’t like doing right now. You get both ends and then you get to be to a place where you’re going to be beyond productive because you’re doing what you really like.
That’s the North Star in a sense. It’s to look for the things that you love, enjoy and you have talent and ability in a sense superior to the other things that you know how to do. Usually, those are what give you that fulfillment and meaning. As you said, there are so many opportunities these days. Jack has got into this fascination with 3D printing. He wants this little toy 3D printer for his seventh birthday. We were watching some videos of this YouTube channel that 3D printed wheels for Hot Wheels cars. It had 200 million views or something like that. For those that understand how YouTube works and advertising models, that’s that guy’s full-time job. It’s 3D printing wheels and showing us how to do it. You have all sorts of bizarre channels and things that people found a profession that you could tell they love to do. The sky is the limit these days. I’m sure there are some doubters who are like, “That’s for you. That’s for this.” That’s an assumption. At the same time, if you know where to look for it, there is evidence that some pretty amazing things are possible even for the doubters.
That goes back to what you said about our path through time as human beings. We’ve got stuff internal to us that many times were put in place to the fight and flight idea of protecting us. Unfortunately, that protection limits us in an environment as we have now. It’s the idea that can never work. I’d have to do what I normally do. I couldn’t provide for my family if I took a chance on this or whatever else. At this time, it’s not that big a chance that you have to take. You can play with it, find out and you get to learn. The beauty of it is you get to be who you are.
Dan Sullivan with Strategic Coach has the idea of unique ability. It’s a fabulous idea. The interesting piece to me on the idea is around unique ability is that your unique ability is hard for you to recognize because as human beings, we all think everybody else is wired like we are. We all think everybody else thinks and believes the same way. That’s something that we do as human beings. That’s how we can get along with other people. It makes us fit in if everybody is like we are. When we have something that we can do that’s special, we think everybody else can do it. If we can take the time to figure out what that is and monetize it, people would gladly pay for that benefit because it’s something they don’t have.
In life, it is effortless to get on the negative road. It seems that humans are wired to seek the negative, look for something wrong, or expect danger at some level. It’s one of the survival instincts baked into our core. In one of the final episodes in the Truth About Money Series, Todd Langford and Patrick Donohoe talk about how gettingrid of this instinct that no longer serves you allows you to understand why you feel the way you do when you hear disheartening news. Recognize the negative and, instead of leaning towards it, check yourself and seek what is right. The wrong never has and never will serve you.
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How To Recognize The Negative And Stop Leaning Towards It With Todd Langford
Marcus Aurelius wrote, “You only live in the present, this fleeting moment. The rest of your life is already gone or not yet revealed.” I want you to consider the possibility that the quickest path to getting what you want is letting go of your past and future. Marcus Aurelius continues, “You have been trying to reach many things by taking a long way around. All these things can be yours now if you stop denying them to yourself. All you have to do is let go of the past, trust the future to providence and direct the present to reverence and justice.”
In a guided meditation by Sam Harris on his Waking Up app, he said something profound, “Take a moment to think about impermanence. It can be very clarifying to do this. Every experience comes to an end but we don’t quite live as though that were the case. We continually succumb to the illusion that we will arrive in some final position but there is no arriving. There are just continual flows of experiences.”
Seneca wrote, “We are tormented alike by what is past and what is to come. A number of our blessings do us harm, for memory brings back the agony of fear while foresight brings it on prematurely. No one confines his unhappiness to the present.” Seneca continues, “What I advise you to do is not to be unhappy before the crisis comes since it may be that the dangers will never come upon you. They certainly have not yet come. Accordingly, some things torment us more than they should. Some torment us when they should not torment us at all. We are in the habit of exaggerating, imagining or anticipating sorrow.”
This is one of the final episodes in the Truth About Money Series with Todd Langford. To get the most out of this interview segment, I want you to consider that the joy and fulfillment you seek in life happens now in the present but to the untrained observer, it is cannibalized by problems taken from the past and irrational fears about the future. A final stoic quote by Marcus Aurelius, “Even if you live 3,000 or 30,000 years, you should remember this. You cannot lose any other life than the one you are living now.” Enjoy.
When you discover the rule, your whole world changes and that rule is asking yourself the question, “How can I appreciate and experience a meaningful life now?” If that was the only question you asked, then the only rule that you had to follow was waking up and enjoying your environment, the world, time and history we live in, it accelerates even more meaningful experiences. You can trade money for time but time can cost you money. Sometimes we will spend our time doing the things that are not meaningful and putting them on the altar of sacrifice to experience time associated with our rules in the future. We have this hallucination that is worth it and it may be. At the same time, anything that is beyond now is a probability. The shorter the time frame, the higher the probability. The longer the time frame, the lower the probability.
It comes down to what you were saying about waking up and that is the idea of being grateful. If we don’t point out and be grateful for the things we have and we are not grateful for anything, then we need to find something in our lives that we can be grateful for. That pushes production and a lot of pieces. It is so easy to get on the negative road. Negative news sells 6 times to 1 on positive news. Internally, what that means is we are all wired to want to look at the negative at some level. It takes that discipline to separate ourselves from that and to say, “We can always find something wrong but how about we work a little bit on finding something good and something that we can enjoy and lights us up each day? If we don’t have that, then maybe that needs to be the first place we spend our resources in finding that place.”
Recognizing The Negative: Negative news sells 6 times than positive news. That means we are all wired to want to look at the negative.
There is always something right, just as much as there is something wrong and always will be. That is the environment that we live in. It is the non-constant side of things and also understanding human nature. We have things that are built into who we are that no longer serve us. Those are instincts of survival. They are instincts to look for danger based on not being able to feed ourselves 200 years ago or a part of our DNA that is still scared of the tiger in the bushes that could potentially kill you. Those are built-in things, yet they no longer serve us the way they did at one point in the past, at least our ancestry or what is built into our nature.
Understanding that allows you to identify and evaluate, this may not be Math. This is more logical. It allows you to evaluate what is going on so that you can have a more logical experience of what reality is. We don’t need to go in and hunt all summer long to put food away so we can survive the winter. We don’t have to be afraid of what we are afraid of 100 or 1,000 years ago. That stuff no longer exists, even though a part of us is wired to believe that it does. If you remove that, it allows you to understand why you feel the way that you do when you are experiencing disheartening news. Instead of being pulled toward it by that instinct, it is checking yourself, going and seeking what is right because you know that the wrong is not going to serve you.
A lot of times, when you talk about stuff like this, people feel like, “That is fine for you.” I get pulled into the negative regularly. The difference is, I have learned to recognize it. It is not that it doesn’t exist and the fear doesn’t come through but I push it on through once I recognize it. I have been able to find out and figure out that that is happening to me sooner so that I can address it instead of letting it sit there and fester. That is where the differential is. It is not a, “I just lived this great life. I don’t have any fear. I don’t do anything wrong. Everything is great.” It is that I have moved with a discipline to be able to recognize it and step away from it, “Let us think about this logically, see what our options are and try to push that out.” That is where the difference is. It is just becoming familiar with what is going on inside your head early.
It is the awareness but also having options and going to the dials when the environment changes. You guys know that we were in this pretty crazy plane or a flight, where the pilot was given false information of where to fly. He flew right into a hailstorm or two converging storms. It felt like the plane was going to crash. He obviously and the plane had systems in place. When that chaos that was unexpected happened, there was awareness and subsequently, an action that could take place. That is where I think being able to logically program those things into our lives is going to aid us as the environment changes because we are all going to experience fear.
There are going to be things that happen that have never happened before. They incite something inside of us. It is like, “I don’t like that.” Usually, it is the carnal instincts that kick in where we are focused on but if we can be aware and have options. I had an experience where something happened in the business. It threw me off in a negative way. I was aware of it almost immediately and I knew what to do. I called a personal coach that I have. I knew I had to speak to this person. This person talked about this. It took a couple of hours but it was over. It would have taken weeks in the past. It is what you experience to then come up with solutions to have options when the environment changes.
A lot of times, people think those options are going to be a cost. That is where strategy comes in and that is a big piece. It is having some logic and strategy altogether to say, “How can I put tools in place that I can lean on in the negative but they don’t cost me when the negatives don’t happen?” That is a bit of art along with science. Not everything is pure science. There is some art in there, too. Part of that is, “How do I put things in place that I can lean on but they are not going to take away from my end goals if nothing bad happens? It is not going to be a decrease.” We want to put stuff together in our life, whether it is time, finances or whatever else that can do multiple jobs whenever possible. We can go on a vacation and enjoy our family all at the same time. If we can start to pair stuff together, then we get two bangs for every buck.
I have caught myself a couple of times with clients, who I get to know things are going on. They want to make an investment or allocate money here or there to grow wealth. I was like, “The best investment you can make now is to take your wife on vacation.” Sometimes it is having a specific amount of liquid reserves. You are not going to earn returns on it. At the same time, what is that going to allow you to do if you need an option? Things didn’t work out the way that you think.
How do you put the Math on that? How do you quantify that? You can’t.
It is the evaluation using logic but also being aware that you are evaluating non-constants.
Recognizing The Negative: We need to spend our resources finding the good and the things we enjoy and light us up.
This is off the subject a little bit. There was an interesting part of the movie, Trouble with the Curve. There is a batter that is in a slump. He is a young batter. He is new to baseball in the Minor League. His recruiter said, “How long has it been since you have seen your family?” “It is hard for them to get down here. It is pretty expensive.” He said, “You just focus on what you are doing and I will get them down here.” The baseball club was up in arms like, “We can’t spend money on bringing them. Just do it.” Sure enough, it fixed his batting problem. How do you quantify that? That is one of those things. It is about life. It is about all the things that have meaning that impact everything else that we do.
Often, what we have in our mind as to why we’re doing something usually isn’t the core reason we’re doing it. You have to ask yourself several layers of questions to get to the real meaning behind your decisions. In part 6 of this series, Patrick Donohoe and Todd Langford discuss how you can unpack the logic behind your behavior to understand what drives you and reveal what it is you truly want. When you see that, you can figure out a path to get what you’re truly desiring.
Watch the episode here:
Listen to the podcast here:
Unpacking The Logic Behind Your BehaviorWithTodd Langford
I spent four daysgetting my psychologydissected by one ofthe most decorated Navy SEALs in history. It’s a mind-blowing experience. Of the myriad of takeaways, I wanted to share what I consider the most applicable to this segment with Todd Langford. First, at the core of human consciousness is a mechanism and this mechanism is designed to keep us safe and alive. As we experienced life, this mechanism unconsciously observes the environment around us and influences the majority of our behavior. What I became even more aware of is the character of this lens, mainly how old it is. This mechanism, which is our subconscious mind, has not evolved at the pace of our environment. It still operates to some degree as if there is a tiger hiding in the bushes, ready to attack.
The subconscious programming is constantly running in the background and hasn’t had its program updated in quite some time. This subconscious lens sees a stranger on the street and concludes if it’s a tiger. It sees someone who looks and sounds different and says, “Beware. Warning. It’s a tiger.” Here is someone who makes a statement that is contrary to our beliefs and says, “Warning, tiger.” Our subconscious is always on guard and it’s there to protect us from not being hurt and to keep us alive. My question to you is what are you wrongly identifying as a tiger in your life, mainly in your finances? What are you afraid of? What are you doing or not doing because you are so scared? Let’s get to the next segment with my friend, Todd Langford.
Based on what you said, on the surface, it seems like money is the only thing that you can manage, which may be true, but without the context of the purpose of that money, I believe that it’s false because what people want money for is in paper. They don’t want numbers. That doesn’t do anything for you. It’s the meaning behind that that does something. I will give you an example where I gave my wife, Cynthia, a budget for a vacation. I thought we are going to drive down to St. George. Maybe we can go to Phoenix. She was able to make Mexico City work, an entire week with drivers and we stayed at the Four Seasons. It’s one of those things where it’s not the money necessarily. It’s what the money can buy.
It’s elusive sometimes when we think we need this amount of money. We think we need to save this much and earn this interest and have these milestones. We do it with a certain set of assumptions and variables that are likely not the best variables. They could be good variables, but they are not the best.What are the best variables and how do you discover them? That is where I would say it’s the logical identification of, what are you doing? Why? What are the alternatives and what is it going to take?
The critical piece is digging through that one. We have talked about this quite a bit in the past. It’s the idea that the initial reason that somebody has in their mind as to why they are doing something usually isn’t the core reason why they are doing it, especially the first one that they share with somebody else. You have to ask yourself several layers, “If I got what I want, what would that mean?” That is the key piece. Why do we want the cabin in the woods? Is it the physical structure or is it the fact that we can be together with the family and experience stuff in the outdoors? We can be separated from the rest of the noise that is going on for a period of time, communicate and be together in fellowship.
It’s the real meaning behind all those things that a lot of people stopped short of looking at it. The results are people buy things thinking it’s the thing. Because their neighbor bought a new boat, they want to buy a new boat. The neighbor bought the boat to experience stuff with their family. This guy bought the boat so that he could keep up with his neighbor. Instead of having a real meaning behind it, it falls short. When they get it, they are miserable, “I spent all this money and it didn’t do anything for me.” I think you see a lot of people in that scenario where they have spent a lot of money on stuff, but they bought it for the stuff and not for the meaning behind it.
Again, going to the logic side of things, it’s the questioning of assumptions, but it’s also the questioning of associations, which comes down to doing this in order to produce that and what that associated meaning is. I think you have productive ones and unproductive ones. What came to mind when you were talking is, how many people don’t make decisions because of inaccurate, slighted or partial assumptions? How many people make decisions or don’t make decisions? As a financial advisor, I have worked with younger people, not married or people that are married that haven’t had kids. I get to know them. Sometimes the conversation comes up, “Are you dating? How long you have been dating, 5 years, 6 years?Six years? Why haven’t you gotten married?” “We don’t have enough money.” I’m like, “What’s enough money?”
There are these rules associated with, “I have to have this and this in order to do this.” It’s like, ”No, you don’t, just do it. Many people have done it and they are very happy.” It’s one of those things where going back to rules and what is the driving force behind the behavior. What do you truly want? Equally, I have worked with clients that have lots of money and don’t need to invest or work but have a rule associated with they have to. They have to invest because if they didn’t, then this, even though they don’t have to. It’s the unpacking the logic and understanding what drives you, which is relative to people. At the same time, there is a role, math, logic and science in play. There is also some non-constant that it’s evaluating. That might be how we conclude this. Is it true that the role of math and science is to evaluate as opposed to hypothesize?
I think so. We can say, “I think it will come out this way,” and then use the math to see if it fits. I have done that many times. I have an idea of what the results of a certain mathematical set of formulas and things are going to be and oftentimes, I’m shocked with what the results are. Now I have a choice of saying, “Throw the math out because I liked my hypothesis better.” I can say, “Let me dig in and find out why it did something I didn’t expect it to do.” I can learn something new and maybe a new direction, a new place to go, which is hugely beneficial. Probably the bigger thing is to be able to prove a decision that you already want to make, as long as you are open-minded and you have that discipline that you are willing to accept whatever the truth says.It’s not necessarily the math, it’s what the truth is.
You can throw a hypothesis out there, something that you want to happen, but you have to be willing to say, “Let’s see what it’s going to take to get there. Let’s see if this works and be okay with what the results of that are.” Since we are driven by emotion, it’s very hard to go against what we want to happen. It’s very hard to go against our beliefs but that is where the discipline comes in. If we want to be successful,we have to do that. One of the things that my wife, Kim says when she is talking to people, a lot of times people will say, “We want such and such, maybe for a great cause to be with our family, to do certain things, to be generous to other people, whatever it is, but we can’t afford it.”
I hear it constantly with advisors and with clients, turning that around and saying, “Let’s not approach it as,‘We can’t because.’How about we start with, ‘Let’s see how we could make that happen?’” It’s a whole different thing. It opens up your mind to, “What if we did this? What if we didn’t do that because we want this to happen and we focus this there?”A lot of times, we can figure out a path to get what it is we are truly desiring if we don’t shut down from the surface and decide, “No, it can’t happen.”
I also think it helps with non-decision as well. I think people have come to this like, “I can’t do that. I can’t do this. I shouldn’t do this or I shouldn’t do that.” Again, going to the marriage story or having kids. If you want to have kids, there is no rule of how much money you have to have in order to have a child. In fact, having a child could greatly amplify your ability to produce and make more money. The point you made where people have to have these dreams or have these things that they want in the future, or if it is possible to have it right now. When you evaluate that, when you logically understand what it is you truly want. It’s not a trip to Rome. It’s a special time with your spouse.
It’s not to live in this place or this neighborhood or that. It’s to live in a place where you’re able to have amazing experiences with people. If you identify how simple things could be from an end standpoint, I think we complicate the means. I believe that if you achieve those ends with uncomplicated means, it gets you more of what you thought was complicated, to begin with. It maybe trips with a spouse, wanting to experience some amazing place, go on this amazing European vacation, go around the world.What you want in the end is to have great experiences with your spouse.
You can go and have a great experience by taking a hike on a Sunday, which costs zero. It’s one of those things where when you experience that, now you can experience something more trivial that gives you even more meaning and more. What that does is it gives you a sense of fulfillment in life that affects your work, your wherewithal, your relationships. It gets you closer to wanting to do that European vacation because here’s the thing, you have this big dream in front of you. All of these things have to line up in order for it to happen. What is your experience like once you’re there? You’re a wreck because it’s going to end. It’s the time side of things. It’s like, “We had to get up early. We got to go here. We got to do this.” You’re both miserable by the time the vacation is over.
The same thing happens on the other side and that is what you are talking about. You are miserable, “I want to go on this vacation with my wife but I don’t think we are ever going to be able to afford it.” You are miserable the whole time without opening your mind up to the things that you can do right now in between. People don’t take seriously the idea of mindset and what impact that has on your ability to do that. Going back to your vacation example, “I can’t do it.” You go to work that way. You’re slugging through another day, “I won’t make enough here to be able to go on that vacation.”
Logic Behind Your Behavior: It’s very hard to go against our beliefs and what we want to happen, but that’s where the discipline comes in.
If you are not, you’re right. You won’t be able to because you have already told yourself you can’t. Your attitude that you show up with is going to reduce the productivity that you could do by who knows how much? It’s an enormous amount and it’s that mindset. Instead of saying, “You know what? This is what we’re going to do.” Your exampleof the idea of having kids or getting married, there are other pieces in there. Let’s say you have kids already and what you want is a pool so that you can spend time with the kids and now you are going to say, “In ten years, we are going to be able to afford and put that pool in there by that time the kids are grown and gone.” How did that come about?
It’s important to look out into the future and want to have a fulfilling life in the future, but not at the expense of having one now. In life, there is always a balance. You have the opposite side where you have people blow everything they have on experiences. They are not happy with any of them because they didn’t think through any of them. That is not what they wanted but they spent the money on it and then it didn’t happen. We have to have balance and as humans, we tend to sway back and forth between the two of them, but understanding the importance of limited time. That is a critical resource that we forget a lot of times. The idea that money can buy time? It can in certain ways to a degree. We have to balance all that out. Enjoy life now because if we enjoy life now, we are probably going to be a lot more productive and be able to hit those goals in the future as well.
Patrick is the President and CEO and started Paradigm Life in 2007 after learning from his mentor Kim Butler about financial strategies outside of Wall Street.
With a background in economics and marketing, Patrick immediately realized the opportunity to teach investors, business owners, professionals and families on a large scale using modern digital media and communication technology. Since 2007 Paradigm Life has worked with thousands of individuals in all 50 states.
Run-of-the-mill advice is everywhere. But in order to achieve different results, your strategy has to be different.
In this book, you're going to learn about a hundred year old strategy that's tried and proven to give results. Are you ready to
shift the way you think about investing?
WHAT THE PROS ARE SAYING...
Once in a great while, a person comes along who can explain financial concepts so clearlu that all of a sudden,
what had been a mystery becomes obvious. For many people, Robert Kiyosaki was that person when he wrote Rich Dad Poor Dad. For me,
that person was Patrick Donohoe when he first explained what you're about to learn in this book.
Tom Wheelright, CPA
Author of Tax-Free Wealth, of the Rich Dad Advisor Series
"Patrick's book explains why every American is experiencing worry, fear, and uncertainty with thier finances.
'Heads I Win, Tails You Lose' outlines a better way to take back control and live a life you love."
"Storyteller, man of honor, humble seeker of truth - these are the words I think about when Patrick comes to mind.
I've been looking forward to this book for quite a while and am pleased to tell you, the reader, it is worth the wait."
CEO, Partners for Prosperity
"Patrick is someone that I call upon to learn the strategies of the world's richest people. 'Heads I Win, Tails You Lose' provides
a creative approach for managing wealth outside of the old and tired methods used by everyone else."
Founder of Capitalism.com
Book Nailed it
A should-read for anyone looking to be smart with thier money, and smart enough not to just follow the herd.
Robert K. Cunningham
Very enlightening and actionable!!
If you want a real path to Economic Independance and not a theory this book is for you.
Wise if I read this years ago.
Great book, made me change my thinking on my investment situation.
Take back control of your money
The truth about money. You will be surprised with the information. WOW!
A must read
Outstanding book. Details information most people are not aware of in creating a sound financial programs.
...a critical financial strategy
I simply couldn't put this book down, I read it cover to cover in 1.5 days! #VeryEngagingRead
ABOUT THE AUTHOR
Patrick Donohoe is the Founder and CEO of Paradigm Life and PL Wealth Advisors. Patrick and his team teach thousands how
to build wealth, create lifetime cash flow, and leave a meaningful legacy.
Patrick was recently honored by Investopedia as one of the Nation's Top 100 Most Financial Advisors. He is a highly sought
after presenter and speaker at financial-based events around the country and is the host of The Wealth Standard podcast.
Patrick grew up in West Hartford, Connecticut, and attended the University of Utah, where he received his bachelor's degree in economics.
He lives in Salt Lake city with his wife and three children.
WHAT'S INSIDE THE BOOK?
THE CHAPTER LIST:
1. ORIGINS OF THE AMERICAN DREAM
2. THE PERPETUAL WEALTH STRATEGY™
3. QUESTION EVERYTHING
4. BREAK AWAY FROM WALL STREET
5. AVOIDING THE INVESTING AND LENDING TRAP
6. THINK FOR YOURSELF
7. A SOLID FOUNDATION
8. B ELIKE THE WEALTHY
9. MYTHS AND TRUTHS OF INSURANCE
10. SAVE, BORROW, INVEST, AND BUILD WEALTH
11. START, BUILD, AND PROSPER YOUR BUSINESS
12. YOUR FINANCIAL FUTURE
13. MAKE THE SHIFT
14. TAKE BACK CONTROL