The Disciplined Pursuit of Less

Essentialism by Greg McKeownEssentialism is the most important new book I’ve read in 2015.

Below are the most important notes/quotes I took from the book.

What is Essentialism?

Essentialism is not about how to get more things done; it’s about how to get the right things done. It doesn’t mean just doing less for the sake of less either. It is about making the wisest possible investment of your time and energy in order to operate at our highest point of contribution by doing only what is essential.

It is a discipline you apply each and every time you are faced with a decision about whether to say yes or whether to politely decline. It’s a method for making the tough trade-off between lots of good things and a few really great things. It’s about learning how to do less but better so you can achieve the highest possible return on every precious moment of your life.

What is the core logic of an essentialist?

There are three deeply entrenched assumptions we must conquer to live the way of the Essentialist: “I have to,” “It’s all important,” and “I can do both,” must be replaced with “I choose to”, “Only a few things really matter,” and “I can do anything but not everything.”

How Do We Forget Our Ability to Choose?

When we forget our ability to choose, we learn to be helpless. Drip by drip we allow our power to be taken away until we end up becoming a function of other people’s choices—or even a function of our own past choices. In turn, we surrender our power to choose. That is the path of the Nonessentialist. The Essentialist doesn’t just recognize the power of choice, he celebrates it. The Essentialist knows that when we surrender our right to choose, we give others not just the power but also the explicit permission to choose for us.

One important insight into how and why we forget our ability to choose comes out of the classic work of Martin Seligman and Steve Maier, who stumbled onto what they later called “learned helplessness” while conducting experiments on German shepherds. Seligman and Maier divided the dogs into three groups.

  1. The dogs in the first group were placed in a harness and administered an electric shock but were also given a lever they could press to make the shock stop.
  2. The dogs in the second group were placed in an identical harness and were given the same lever, and the same shock, with one catch: the lever didn’t work, rendering the dog powerless to do anything about the electric shock.
  3. The third group of dogs were simply placed in the harness and not given any shocks.

Afterwards, each dog was placed in a large box with a low divider across the center. One side of the box produced an electric shock; the other did not. Then something interesting happened. The dogs that either had been able to stop the shock or had not been shocked at all in the earlier part of the experiment quickly learned to step over the divider to the side without shocks. But the dogs that had been powerless in the last part of the experiment did not. These dogs didn’t adapt or adjust. They did nothing to try to avoid getting shocked. Why? They didn’t know they had any choice other than to take the shocks. They had learned helplessness.

Power of Tradeoffs

Essentialists see trade-offs as an inherent part of life, not as an inherently negative part of life. Instead of asking, “What do I have to give up?” they ask, “What do I want to go big on?” The cumulative impact of this small change in thinking can be profound.

MAKE YOUR PEACE WITH THE FACT THAT SAYING “NO” OFTEN REQUIRES TRADING POPULARITY FOR RESPECT

When you say no, there is usually a short-term impact on the relationship. After all, when someone asks for something and doesn’t get it, his or her immediate reaction may be annoyance or disappointment or even anger. This downside is clear. The potential upside, however, is less obvious: when the initial annoyance or disappointment or anger wears off, the respect kicks in. When we push back effectively, it shows people that our time is highly valuable.

Charlie Munger feels the same way when he says, “If your new behavior earns you a little temporary unpopularity with your peer group, then the hell with them.”

Pick up a copy of Essentialism. You won’t regret it.

You v2.0

The first time I read of the body as hardware and the mind as software analogy was while reading Lying by Sam Harris

I do not remember what I thought about lying before I took “The Ethical Analyst,” but the course accomplished as close to a firmware upgrade of my brain as I have ever experienced. I came away convinced that lying, even about the smallest matters, needlessly damages personal relationships and public trust.

It’s a very thought-provoking, quick book that I recommend you read, but the concept of the ‘firmware upgrade of my brain’ stuck with me long after I finished the book.

The concept of a ‘firmware upgrade of my brain’ was solidified after hearing Eric Thomas speak in this video:

There are those of you with phones and every new phone that comes out you get it. Every upgrade you get it. Every piece of software you get it. You are upgrading your technology and you are not upgrading yourself. You got the same operating system you had since 1995. You don’t think any different you don’t speak any different. You’re the exact same person you were in 2010.”

Software Upgrade – Becoming a lifelong learner

About two years ago I discovered Farnam Street, a brilliant blog by Shane Parrish about books he’s read and what he gets out of them. I thought it was so good I tweeted about it:

That started me on a path of reading more books, which has probably had more of an impact on my life in the past 1.5 years than anything else.

books

I picked up books on a wide range of topics and adopted the mental models approach to learning advocated by Charlie Munger.

I started to acquire new skills, experiences, and ways of looking at things based on some advice from Scott Adams, the creator of Dilbert, who found success by combining many mediocre talents as told in his book How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life:

I’m a perfect example of the power of leveraging multiple mediocre skills. I’m a rich and famous cartoonist who doesn’t draw well. At social gatherings I’m usually not the funniest person in the room. My writing skills are good, not great. But what I have that most artists and cartoonists do not have is years of corporate business experience plus an MBA from Berkeley’s Haas School of Business.

In the early years of Dilbert my business experience served as the fodder for the comic. Eventually I discovered that my business skills were essential in navigating Dilbert from a cult hit to a household name.

My combined mediocre skills are worth far more than the sum of the parts. If you think extraordinary talent and a maniacal pursuit of excellence are necessary for success, I say that’s just one approach, and probably the hardest. When it comes to skills, quantity often beats quality.

Learning that Warren Buffett was a learning machine only made me want to learn more and learn faster.

Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you. Warren was lucky that he could still learn effectively and build his skills, even after he reached retirement age. Warren’s investing skills have markedly increased since he turned 65.

Reading about Emerson Spartz, the 28 year old entrepreneur responsible for many successful websites, recently further drove home the point that constantly learning and upgrading your operating system were some of the most important things you can do:

“It would be a waste of time to learn all this stuff and not be able to remember it or apply it in relevant situations. Being able to learn provides an exponential return on the investment,” he says. It’s like “wishing for more wishes.”

Why Not Now?

There has never been a better time to be interested in learning than today. There are free online courses available that will teach you whatever it is you want to know. Ebooks will allow you to start reading about whatever you’re interested in right now. This was not the case ten years ago. There are no more excuses.

Learn something, think different, and upgrade your operating system!

Willpower: The Owner’s Manual

Willpower: The Owner's ManualI read Willpower: The Owners Manual by Frank Martela a little over a year ago and it’s had a significant impact on how I structure my day. Because willpower is a finite resource, I try to get most of my most mentally demanding work done in the morning, and I’ve also placed a much higher priority on sleep. The book is divided into 12 Tools for doing the right thing, and below are excerpts which I found the most important and that I review every so often:

This book is your owner’s manual to willpower. Don’t just read it. Use it. By integrating the tools provided into your everyday life you will not only get what you want – you will also get it much easier. By using these tools, you can make the right choice the easiest choice. And then it will be only natural to do the right thing.

In this world of choices, it is not always easy to do the right thing. You might know what you should do, but all sorts of temptations, urgent desires, and outside pressures might lure you to follow them instead. Willpower is your ability to make sure you do the right thing.

Most generally, there are four ways to get oneself to do the right thing:

  1. Being internally motivated to do the right thing
  2. Using willpower to do the right thing
  3. Being habitually inclined to do the right thing
  4. Designing the environment so it nudges one automatically to do the right thing

willpower

Here we concentrate on willpower, the rugged cousin of motivation, who is called in when a job needs to be done (think about Mr. Wolf in the movie Pulp Fiction).

Willpower consists of two parts:

  1. First there is the muscle-like capacity to fight urges and impulses. Research has shown that willpower is like a muscle: it gets tired when used, but quickly recovers through resting.
  2. Second, there is the role played by the right kind of attitude. The more you believe in yourself and in your willpower, the easier it is to fight urges.

So if there is one message I hope you get from this book, it is this:

The best way to use your limited willpower resources is to change the situation so that you do not actually need willpower at all to do the right thing.

Through this automated routine, you get into a position in which the temptation is minimized, and thus you need significantly less willpower to fight it. For example, most of us don’t have to fight the battle of whether to brush our teeth every morning. It simply is part of the morning routine, and we perform it without giving it a second thought.

So when facing a willpower challenge, ask yourself first, is there a way to tweak your habits or your environment so that you never have to face an open battle. This way you can save your willpower for those battles that matter.

Example: This is actually what Barack Obama does. Being the President of the United States of America, he faces an incredible amount of tough choices every single day from dawn till dusk. To survive this challenge, Obama has decided to focus his decision-making energy: “You’ll see I wear only gray or blue suits,” he explained to a reporter of Vanity Fair. “I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.” He admits that his wife makes fun of how routinized he has become, and how this is not his natural state. Yet, given his position, it is the only possibility: ”You need to routinize yourself. You can’t be going through the day distracted by trivia.”

It is important to notice that willpower is only needed when there is a conflict within you, when two desires (one more beer vs. being sharp in the morning) fight for your attention. When you know that something needs to be done, but at the same time some acute urge sneaks into your mind, willpower is the ability to keep your eyes on the ball. Willpower makes it possible to choose one’s future well-being over present desires. This ability to fight present urges and think long-term makes us humans a unique species in the animal kingdom. Most generally put, willpower is the power to say no to the wrong things, and yes to the right things.

Modern psychology has shown that the human ability to control one’s own feelings and behaviors is weaker than we have previously thought. The tail wags the dog; your conscious mind is all too often the one who merely justifies the desires and behaviors that your more impulsive unconscious self has already followed through with.

NYU professor Jonathan Haidt has likened our mind to an elephant and its rider. The rider is our conscious mind, which thinks it is in charge. Unfortunately, the intuitive elephant mind it is riding on is much bigger and stronger. To tame the elephant, and to get it to go where one wants it to go, requires a significant amount of training and building of healthy routines. Traditional psychology has often ignored the elephant and focused only on the rider. The most significant practical contribution of recent psychological research has been a renewed interest in the intuitive, unconscious part of our mind. By acknowledging the existence and great influence of the elephant, and by learning more about how it works, we can start to take increased control over our lives.

You use your willpower every time you fight against an urge, try to filter some distractions out of your mind, make a choice between alternatives, or try to concentrate on something. And when you use your willpower, you have less of it available for the next task. Willpower is like a muscle; it gets exhausted through use, but recovers through rest. Roy Baumeister summarizes the key insights emerging from his research into two points:

  1. You have a finite amount of willpower that becomes depleted as you use it.
  2. You use the same stock of willpower for all manner of tasks.

Example: College students preparing for a tough exam were similarly asked about their beliefs about willpower. Again, those who believed their willpower didn’t get depleted demonstrated greater self-control in the stressful time leading to the exam, while those with a limited view of self-control were more prone to slip into bad habits. Other research has shown that positive emotions and the right kinds of motivation can both counter, to some extent, the exhausting effect of willpower usage. This attitudinal side of willpower is captured well by a slogan popularly (but probably falsely) believed to be from Henry Ford’s pen: If you think you can, or if you think you can’t – you are probably right.

First, just reminding yourself of the positive outcomes you are aiming for helps you to remember what makes you motivated for the activity. Instead of thinking that you have to study for the exam, think about why you are studying in the first place. Perhaps to be able to do some interesting work in the future? Then realize that you don’t have to study, but you can choose to do it, in order to get where you want to get. Keep the end goal in mind.

12 Tools For Doing The Right Thing

Tool 1: Mind your blood sugar. Eat well and sleep enough.
To uphold concentration, to make decisions, to resist temptations all require energy. And within your brain, it is glucose that provides that energy. When the blood glucose levels drop, the executive functions of the brain are the first to suffer. It is precisely these executive functions – located mainly in the frontal lobe – that are responsible for your self-control.

Tool 2: Invest in effective resting
The takeaway: Do not believe that every working hour has equal worth in terms of productivity, creativity, or quality of decisions. All hours are equal but some hours are more equal than others. The pattern in the parole case was clear: Acceptance rate peaked in the early morning and then started to slowly decline. After the lunch break, acceptances peaked again, only to decline more and more the longer the day dragged on. There are two practical conclusions to be drawn from this:

  1. Schedule your activities according to your willpower level. For example, I myself meticulously guard the first three hours of the working day. Whatever meeting you try to schedule with me in the morning, I claim I am busy. This is because writing is the key to my profession, and in terms of performance – calculated both by quantity and quality of my writing – the morning hours are at least four times more worthwhile for me than the afternoon hours.
  2. Make strategic resting a part of your daily routine. When you feel that your energy is getting low, it is time for action: Before the next challenge, give yourself a chance to rest. Invest 12 minutes of your busy schedule on yourself. Put a timer on and until it buzzes, give yourself permission to rest.

In intensive work, your stress levels rise up, and this weakens your ability to concentrate and make rational decisions. When you give yourself permission to rest, your parasympathetic system kicks in: stress hormones diminish and heart beat lowers. Among athletes, the power of small resting moments has been common knowledge for years, and research supports their effectiveness.

Manage your energy, not your time – this is the key insight for success in modern work.

Tool 3: Train your mind with the zorro circle
That’s the magic of the Zorro Circle: Instead of trying to control everything at once, you can start by finding some small corner that you feel you are able to control. Instead of cleaning the whole apartment, clean the kitchen table. When you master it, you conquer some new ground (kitchen floor?), and with increased confidence you can soon face challenges that seemed unimaginable a few months before.

Tool 4: Commit yourself fully to your target
Before running a marathon, think it through: Do I really want to do this or not? Go through all the arguments for and against it. And make a decision. You don’t have to do it, but if you decide to do it, decide it firmly. When the decision is made in advance, and it stands solid, you don’t lose your energy on thinking about that during the situation. The decision is made, and you can concentrate your thoughts and energy on executing it. Precommitment is an essential building block of strong will.

Tool 5: Forgive yourself in order to learn from your mistakes
So when you face a self-control failure, the most important thing is to accept responsibility for what happened, and have a realistic look at the situation that caused it. What situational factors were at play? What could I have done differently? It is this reflection and a commitment to change that are the real drivers of change for the better. By focusing on self-punishment, you easily fail to have this essential reflection. But self-forgiveness alone is not enough, either. However, when forgiveness is combined with a commitment to change and a plan, it might work magic in making you less prone to repeat your mistake.

Tool 6: Don’t fight or flee, instead pause and plan
The solution is to learn a different way of reacting to these kinds of threats. The donut is not an external threat; instead, it is a trigger for an internal battle between that self within you that is committed to the diet and that self which is eager to eat something sweet. And to win this internal battle, the best thing you can do is to calm down. The calmer you are, the more coolly you can look at the situation. And the more coolly you look at it, the more you gain control and are able to follow your more rational self and your long-term commitments. Instead of fight-or-flight, the modern threats are better dealt with through pause-and-plan.

So the next time you sense a threat (which is not a lion), do as follows: Before panicking, take ten seconds to breathe deeply. In and out, in and out. This calms you down and gives the conscious part of your mind the time to gather itself. You are again in control of yourself and can better address the situation in a way that you – and not your gut instincts – see appropriate.

Tool 7: Use mental judo to think anew your challenge

  1. Breaking in a new habit. So make a decision that you do something for the next two weeks, in order to break it into your system. In addition to actually doing the thing a few times to get started, it is important to pay attention on how you get started on it. What are the small routines that are needed in order for you to get there? In the case of jogging, it might involve the choosing of proper clothes, deciding which track you are going to run on today, and finding the time necessary for running.
  2. Rerouting an existing habit. When a desire kicks in, simply sitting down and abstaining is very burdensome. More often than not, it is better to feed the desire with something else instead because saying no to an old habit is usually harder than saying yes to a new habit. If tobacco is your temptation, instead of biting your nails, smoke an electronic cigarette, or run up and down the staircase a few times. The idea is to reroute your brain into a new path. You might have been conditioned so that a certain trigger leads to certain desires and behaviors (e.g. beer ➔ smoking), and the task is to condition oneself anew so that the same trigger leads to a new desire
  3. Delay the gratification. Often it might feel too harsh to say no, period. That sounds so final that you give yourself permission to eat that chocolate cookie, just this once. Instead of saying no, a good strategy is to say later.
  4. Think anew your challenge.  Let’s say that your problem is going to sleep too late and being tired and crumby at work the next day. You have tried to say yes to the bed early enough, but this is not succeeding. How about looking at what you should say no to, in order to get in bed on time? Perhaps it is the all too exciting world of the Internet that keeps you awake. Perhaps your challenge is not about saying yes to bed at 11:30, but about saying no to the computer after eleven. More generally, the most important advice in mental judo is this: Learn your opponent. When you have a willpower challenge, pay close attention to the details. What are the small triggers that build up the path towards the bad habit? What are the small obstacles in the way of the good habit? What is the tiniest possible change that can be made to get the present situation out of balance, and ready for change? The more you learn about the habit and its constituent parts, the more able you are to find its weak spot, and tackle it for good.

Tool 8: You get what you measure
What is this magic of the mirror? The explanation is that a mirror makes you more aware of yourself, and this increased self-awareness increases your commitment to your own principles and aims. Carver and Scheier go even so far as to argue that the reason we humans have developed self-awareness in the first place is to strengthen our self-control.

The takeaway from this is that increasing your self-awareness increases your willpower. The more aware you are of what you do, how you do it, and what the results are, the more self-control you have. And one proven way to increase your willpower through increasing your awareness is through measuring. Whatever your target is, if it can be measured, this measurement can be used to your advantage. For example, those weight-watchers who visit the scale daily are more prone to reach their target than those who do it less often.

Tool 9: Small steps, big rewards
One proven way to increase motivation and enjoyment along the way is to break the big target into a series of smaller targets – and then celebrate all these steps toward the right direction.

Another crucial element is celebrating the small successes. Ambitious targets animate the ambitious parts of your mind. But what about that part of your mind, which is more animated by present pleasures than remote abstract accomplishments?

Promise yourself concrete, tangible rewards, and you will notice that the more pleasure-oriented part of your mind also pushes you toward your target – instead of pulling you away from it.

Tool 10: Where is your environment nudging you?
The best way to avoid a temptation is to make it impossible to fulfill. A candy bar at your desk is much harder to resist than a candy bar that is still at the store. It is easier to fight the urge to splurge on those designer jeans, if you left your credit card at home before entering the mall. In a similar vein, many business people praise flights as times of great productivity because the lack of Internet and telephone makes it possible to achieve concentration that is never possible on the ground. Of course, one can achieve this without boarding a plane as well: When Dan Heath needs to write, he uses his old laptop from which he has physically removed the Internet port altogether – making it impossible to surf and thus ensuring a far better concentration than with modern wifi-equipped machines68. So whatever your temptation is, take a look at your environment and think: Is there a way to avoid it altogether? If there is no chocolate in the house, you don’t have to fight against that late night craving for a bite.

Tool 11: The 20 Second Rule
In his book The Happiness Advantage, Shawn Achor, the lecturer of a popular course on happiness at Harvard, tells us how he wanted to read more books and watch less TV. The intention was good, but after a long day at work, he arrived at home and slumped onto the sofa. “I’ll start reading soon,” he thought while picking up the remote control – and before he knew it, two hours had passed. He realized that the problem was the 20 second threshold that separated him from the books and decided to reverse the situation. He took the batteries out of the remote control and placed them in a drawer in the bedroom so that it would take him exactly twenty seconds to get them and put the TV on. On the other hand, he placed some carefully selected books within arm’s reach from the sofa. This small modification completely changed his home routines: Suddenly, when he was tired on the sofa, the easiest option was to read, and the harder option was to watch TV. Accordingly, he found himself spending the evenings reading and very rarely made the extra effort to pick up the batteries to be able to watch TV. Thus the 20-Second Rule was born.

Tool 12: You are who you hang with
“We are the sum of all people we have ever met; you change the tribe and the tribe changes you.” These words by Dirk Wittenborn, have recently been shown to be true as regards a large number of behaviors. If a good friend of yours is obese, it is 171% more likely that you become obese, too. If your friends smoke, the chances are that you smoke, too. On the other hand, if a few good friends of yours quit, your odds for quitting increase dramatically, too. An analysis of human networks has revealed how both depression and happiness spread in these networks like a disease. The people around you influence you both explicitly and implicitly. On an explicit level, they give you ideas, values and advice that influence your choices. The options you see as possible for yourself as regards career, for example, are much dependent on the role models in your neighborhood. On the implicit level, you are all the time picking up cues about what is acceptable and what is not based on what you see other people doing. As a social animal, you have a compulsive need to “fit in” and prove yourselves, even to complete strangers.

Conclusion

The most important background capability for willpower is the ability to plan. This means that you just don’t go on doing things, but occasionally stop to reflect: Why am I doing what I am doing? Given my aim, what is the best strategy to pursue it? This isn’t as self-evident as it sounds. More often than not, you do things without a second thought. This might be great for many purposes – nothing paralyzes a man better than too much thinking – but sometimes the most straightforward path doesn’t lead to where one is heading. In these situations, it pays to plan, to look at one’s behavior, habits and the environment.

I highly recommend picking up a copy of Willpower: The Owners Manual. If you just pick up one habit that makes you more productive, you’ll be getting your money’s worth.

Charlie Munger Can Teach You To Be Less Dumb

mungerCharlie Munger might be one of my favorite people in history, right up there with Marcus Aurelius.

He’s the vice chairman of Berkshire Hathaway and his mental models approach to learning is something I’ve started to take an interest in and learn a lot more about.

I picked up a copy of his book Poor Charlie’s Almanack last year and it’s something I keep coming back to.

The six principles below are excerpts from and some of my most important takeaways from this book:

  1. Munger’s “Multiple Mental Models” Approach to Business Analysis and Assessment

    “You must know the big ideas in the big disciplines and use them routinely-all of them, not just a few. Most people are trained in one model-economics, for example-and try to solve all problems in one way. You know the old saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.

    “Charlie’s approach to investing is quite different from the more rudimentary systems used by most investors. Instead of making a superficial stand-alone assessment of a company’s financial information, Charlie conducts a comprehensive analysis of both the internal workings of the investment candidate as well as the larger, integrated “ecosystem” in which it operates. He calls the tools he uses to conduct this review “Multiple Mental Models.”

    These models, discussed at length in several of the Talks (especially numbers Two, Three, and Four), serve as a framework for gathering, processing, and acting on information. They borrow from and neatly stitch together the analytical tools, methods, and formulas from such traditional disciplines as history, psychology, physiology, mathematics, engineering. biology, physics, chemistry, statistics, economics, and so on. The unassailable logic of Charlie’s “ecosystem” approach to investment analysis: Just as multiple factors shape almost every ecosystem, multiple models from a variety of disciplines, applied with fluency, are needed to understand that system. As John Muir observed about the interconnectedness of nature , “When we try to pick out anything by itself, we find it hitched to everything else in the universe.”

  2. A Willingness To Change His Mind

    “Faced with the choice between changing one’s mind and proving there is no need to do so, almost everyone gets busy on the proof.” -John Kenneth Galbraith

    Charlie has developed an unusual additional attribute – a willingness, even an eagerness, to identify and acknowledge his own mistakes and learn from them. As he once said, “If Berkshire has made a modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don’t destroy one of your best-loved ideas is probably a wasted year. Charlie likes the analogy of looking at one’s ideas and approaches as “tools.” “When a better tool (idea or approach) comes along, what could be better than to swap it for your old, less useful tool? ‘Warren and I routinely do this, but most people, as Galbraith says, forever cling to their old, less useful tools.”

    “Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not. It is the first lesson that ought to be learned and however early a man’s training begins, it is probably the last lesson that he learns thoroughly.” -Thomas Henry Huxley; Darwin’s self-appointed advocate or “bulldog”

    Charlie counts preparation, patience, discipline, and objectivity among his most fundamental guiding principles. He will not deviate from these principles, regardless of group dynamics, emotional itches, or popular wisdom that “this time around it’s different”

    When faithfully adhered to, these traits result in one of the best-known Munger characteristics: not buying or selling very often. Munger, like Buffett, believes a successful investment career boils down to only a handful of decisions. So when Charlie likes a business, he makes a very large bet and typically holds the position for a long period.

  3. Discipline and Patience – Ted Williams 77 Cell Strike Zone

    “It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities.” -Munger

    In making investments, I have always believed that you must act with discipline whenever you see something you truly like. To explain this philosophy, Buffett/Munger like to use a baseball analogy that I find particularly illuminating, though I myself am not at all a baseball expert.

    Ted Williams Strike ZoneTed Williams is the only baseball player who had a .400 single-season hitting record in the last seven decades. In the Science of Hitting he explained his technique. He divided the strike zone into seventy-seven cells, each representing the size of a baseball. He would insist on swinging only at balls in his ‘best’ cells, even at the risk of striking out, because reaching for the ‘worst’ spots would seriously reduce his chances of success. As a securities investor, you can watch all sorts of business propositions in the form of security prices thrown at you all the time. For the most part, you don’t have to do a thing other than be amused. Once in a while, you will find a ‘fat pitch that is slow, straight, and right in the middle of your sweet spot. Then you swing hard. This way, no matter what natural ability you start with, you will substantially increase your hitting average.

    One common problem for investors is that they tend to swing too often. This is true for both individuals and for professional investors operating under institutional imperatives, one version of which drove me out of the conventional long/short hedge fund operation. However, the opposite problem is equally harmful to long-term results: You discover a ‘fat pitch’ but are unable to swing with the full weight of your capital.” -Li Lu of LL Investment Partners

    “When Warren lectures at business schools, he says, ‘I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches representing all the investments that you get to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do so much better.”

  4. Focus on What To Avoid

    Often, as in this case, Charlie generally focuses first on what to avoid-that is, on what NOT to do-before he considers the affirmative steps he will take in a given situation. “All I want to know is where I’m going to die, so I’ll never go there” is one of his favorite quips. In business as in life, Charlie gains enormous advantage by summarily eliminating the unpromising portions of “the chess board,” freeing his time and attention for the more productive regions. Charlie serves to reduce complex situations to their most basic, unemotional fundamentals.

    Yet, within this pursuit of rationality and simplicity, he is careful to avoid what he calls “physics envy,” the common human craving to reduce enormously complex systems (such as those in economics) to one-size-fits-all Newtonian formulas. Instead, he faithfully honors Albert Einstein’s admonition, “A scientific theory should be as simple as possible, but no simpler.” Or in his own words, “What I’m against is being very confident and feeling that you know, for sure, that your particular action will do more good than harm. You’re dealing with highly complex systems wherein everything is interacting with everything else.”Personally, I’ve gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these things—which by and large are useful, but which often misfunction.

  5. Circles of Competence

    “If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter.” – Warren Buffett

    “If you have competence, you pretty much know its boundaries already. To ask the question [of whether you are past the boundary] is to answer it.” – Charlie Munger

    There are a lot of things we pass on. We have three baskets: in, out, and too tough. We have to have a special insight, or we’ll put it in the “too tough” basket. All you have to look for is a special area of competency and focus on that. If you have competence, you know the edge. It wouldn’t be a competence if you didn’t know where the boundaries lie. Asking whether you’ve passed the boundary is a question that almost answers itself.

  6. How to Be Happy, Get Rich, and Other Advice

    A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.Just avoid things like AIDS situations, racing trains to the crossing, and doing cocaine. Develop good mental habits.

    If your new behavior earns you a little temporary unpopularity with your peer group, then the hell with them.

    • Be satisfied with what you have: Someone will always be getting richer faster than you. This is not a tragedy.
    • Beware of envy: The idea of caring that someone is making money faster [than you are] is one of the deadly sins. Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?
    • How to get rich: Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts…. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough- most people get what they deserve.
    • The importance of reading: In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads – and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.
    • Becoming friends with emminent dead: I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better in life and work better in education. It’s way better than just being given the basic concepts.

I highly recommend picking up a copy of Poor Charlie’s Almanack. You will be less dumb after reading it.

Seeking Wisdom is another great book (which I’ll be doing a write-up of soon) which also discusses Munger in detail.

If You Only Read One Book This Year

It should be Meditations by Marcus Aurelius (Gregory Hayes Translation is by far the most accessible)

Reading Meditations by Marcus Aurelius for just a few minutes each day is some of the most valuable time I spend all day. So much gold in there. And it’s nearly 2,000 years old.

So good, that Hannibal Lecter even references him during Silence of the Lambs, one of my favorite movies:

Some of my favorite passages:

  • 11. What is this, fundamentally? What is its nature and substance, its reason for being? What is it doing in the world? How long is it here for?
  • 19. Not to assume it’s impossible because you find it hard. But to recognize that if it’s humanly possible, you can do it too.
  • 21. If anyone can refute me—show me I’m making a mistake or looking at things from the wrong perspective—I’ll gladly change. It’s the truth I’m after, and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance.
  • 48. When you need encouragement, think of the qualities the people around you have: this one’s energy, that one’s modesty, another’s generosity, and so on. Nothing is as encouraging as when virtues are visibly embodied in the people around us, when we’re practically showered with them. It’s good to keep this in mind.
  • 71. It’s silly to try to escape other people’s faults. They are inescapable. Just try to escape your own.

So many more. Message me on Facebook and I’ll send you all my notes.

Things You Wish You Learned When You Were Younger

Two great Quora threads came across my inbox this morning that I thought were worth sharing.

What’s the most inspiring thing that you learned, but wished you had learned when you were much younger?

Some answers that stood out:

I am enough.

I am enough of a human being, of a parent, of an employee.

I am enough pretty and enough smart, I am enough intelligent and enough creative.

I am the way I am and I don’t need to apologize for it.

Pair that response with Daring Greatly, by Brene Brown, or watch her brilliant TED Talk

That EVERYTHING is your choice.

It may not feel like it, but you can actually decide what you want to do at every moment of every day.

The only reason you don’t is because you are afraid of consequences and you think that you “need” all of the things around you, people around you, and authority above you in order to eventually be “allowed” to live the life that you will enjoy.

No one will give you the life that you want.  They will keep it for themselves if they ever find it.

YOU must give yourself the life you want.

You must create every single aspect of it.

Ultimately, you are completely responsible for everything you choose to have or not have in your life.

Viktor Frankl, the Holocaust survivor and author of Man’s Search for Meaning says:

“Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

You ALWAYS have choice. Learn more about Frankl here.

A few standout answers from: What are your favorite unconventional life tips?

If one person calls you a horse, call him an ass. If another person calls you a horse, punch him in the throat, if another person calls you a horse, it might be time to look for a saddle – one or two people might try to decieve or mock you, but if everyone tells you the same thing, they are probably right.

If you ever catch yourself complaining “this always happens to me,” that means you are doing something wrong

Fear is not a choice. Giving in to fear is a choice.

Nothing really matters as much as you think it does. No, really.

I can’t change people, but I can change people. (I can’t change people, but I can change the groups of people with whom I choose to associate.)

67 Short Pieces of Advice and a New Must Read Blog

I can’t believe I’ve been sleeping on Raptitude, a blog by David Cain, for so long.

I recently was sent this post about 67 pieces of advice and it’s pure gold.

Some of my favorites:

  • 11. Learn the difference between something that makes you feel bad, and something that’s wrong. A thing can feel bad and be right, and it can feel good and be wrong.
  • 15. Consciously plan your life, or others will do it for you.
  • 27. When someone disagrees with you, try to understand what needs and fears are behind their stance. Yours probably aren’t much different.
  • 37. Give classical music another shot every few years. (I recently did this and enjoy it)
  • 40. Picture yourself at your own funeral. Imagine what they are thinking.
  • 49. Once in a while, imagine that this moment is the very first moment of your life, and then build a future from there.
  • 60. Be extra kind to people while they are at work, especially servers, clerks, and tech support staff.

You should really check out the whole list. It’s that good.

I liked it so much I also bought his ebook on Mindfulness, which is something I’ve been trying to practice more of this year, and even went so far as to purchase a subscription to Headspace, which has been useful as well.

Open your eyes to Raptitude, you’ll be happy you did, and a better person for it!

Why Reading Is Important To Your Sexual Health

If you go home with somebody and they don’t have books, don’t f*ck ’em. – John Waters

If women take up John Waters on this advice you’d be in trouble.

Read books.

A lot of books.

Fiction, non-fiction, whatever you enjoy.

Just read.

Why should you read?

There are too many answers to that question.

But that’s the wrong question.

You should ask, “Why shouldn’t I read?” and there are zero good answers to that question.

Reading gives you ideas.

Ideas = currency

Ideas = new solutions to old problems

Ideas = more ways to solve new problems.

Always flex the idea muscle.

Below are three blogs you should start reading today that focus on reading, books, and getting smarter:

http://www.farnamstreetblog.com/
http://www.brainpickings.org/
http://www.bakadesuyo.com/

If you’re looking for what to read you can start here:

Amazon 100 Books To Read In A Lifetime
Amazon Best Sellers

How To Get Rid Of Your Excuses

If you’re a human and not reading James Altucher you’re missing out.

I forget how I initially heard about him but I read his book, “Choose Yourself” and I’ve been a fan ever since.

His post from today was about getting rid of excuses.

There’s ALWAYS a gap between “what I have now” and “what I would like”.

The gap is all of your excuses. All it takes to close the gap is to be creative and work your way through the excuses.

I repeat: this is ALL IT TAKES.

Read the entire post here