Most posts that address this topic talk about “motivation”. As you know, motivation is primarily targeted at the bottom 90% of the population. People who need to be motivated are born to fail (maybe 0.1% turn it around but that’s due to the law of large numbers). Instead, we’ll do the opposite and create a how to on “creating a hard working individual”. None of this is scientific fact (who cares about science since PHD studies are always years behind businesses – a topic for another day) but it is based on a large amount of observations.
Three Item Overview
Grow Up “Poor”: One of the common traits of well off people is actually being born with less. This is in quotes for a reason, when we say less we mean “less relative to the environment”. Your average person complains that he was born with the wrong starting hand. But. Refuses to acknowledge that rich people are rarely born rich to start.
What is “poor” in this situation. Poor means you’re constantly surrounded with people who got a head start. This then causes a “fight or flight” reaction where the person complains that his peers have more than him or a “fight” reaction where the person decides to outperform them despite having less. We’re not exactly sure how to flip that switch, but you can see it from the beginning. In fact, there is the classic cupcake story where kids were forced to stare at a cupcake for ~15 minutes and if they survived they would receive two (if they ate the cupcake they only got one). This ended up being a marker of future success. This makes sense. While put in a position of discomfort, being seen as “lesser” than peers, being forced to delay gratification etc. the correct response is to “tough it out”.
The conclusion from this first step? Create a feedback loop of delayed gratification. If a young person already has a trust fund, the answer would be clear. You’d never tell them about the trust fund and create a positive feedback loop when the child/person delays gratification for a reward. Then you scale up the amount of gratification with the time they must delay. For a cupcake maybe 15 minutes is fair. For a bike maybe they have to mow the lawn for a few months. So on and so forth. The key is creating a natural positive feedback loop between effort, reward and delayed gratification. The last thing we would add is to give it all at once. You want to train the person to realize that longer delayed gratification means bigger rewards. So if someone mows the lawn for 5 years, you’d give them the one time reward after 5 years. Why? Well you don’t want them used to small time rewards of $1 since the dopamine rush and connection would be smaller. In short, step one is to create a positive feedback loop between delayed gratification and reward. Expand this over time.
Spam Topics: Bill Gates recently stated that success is finding something you can be world class in between ages 12-18. While this sounds good it misses one big point “will the task make any money?”. You could be perfectly built for digging ditches with a shovel, but as long as heavy equipment machinery is around… You’re not going to make any money doing that.
Instead we’ll make a change to this idea. You’ll “spam topics”, since we know which skills will be more valuable in the future it is a lot easier to choose all the topics. If you’re telling someone to spend their time learning how to iron clothing (you’re wasting his/her time). If you’re telling the same person to learn UI design, you may have a winner on your hands. This is why the spam approach is important. You place the person into an environment to train for 100s of different items. A few months is more than enough. The kicker? You then encourage them to choose the one they are the best at.
This last part is critical. Even if they “love” doing topic A if they are really going to be world class in topic B… They must go in that direction to succeed. While there are always “success stories” of someone following their dreams, it just doesn’t work out most of the time. Instead you want to go into the direction where you have the most raw-talent. After all, a successful person is much more interested in winning than they are in feeling good about the moment (another form of delayed gratification). In short, step two requires the person to try numerous topics that will be profitable in the future and choose the one where he/she has the most talent.
Place Them in the Center: The person now has a good amount of will power (delayed gratification) and knows where his/her talent is. The next step is clear… Make them move up the value chain. If the person is competing in the same age bracket… They are not talented at all. This sounds rude but it is true. As a simple example, anyone who has played sports will know that playing on the “varsity team” as a junior is not impressive at all. You want to be playing at that level as a freshman/sophomore at minimum. If the school is talented at the sport you’re likely a sophomore and if they are not great you should be playing at the varsity level in year one. This is the easiest example since we see it in our everyday lives.
What is the “center”. Well if you compete up (meaning against people older than you), you’re then a middle level person. It is unlikely someone picks up a task in 3-6 months and is suddenly world class. Instead you pick up the task and constantly compete up to a point where you’re still able to improve at a rapid rate. You don’t want to compete to a point where you’re only playing against the #1 person in the field (losing every day). Instead if you are number 1,000 in the world you want to compete against the guys who are #400-600 or so. After that you move up and up and up.
The last item for the center position is mental state. Many people believe being the best in their age group is their “competition”. It isn’t. If you truly want to be the best at something you have to seek out people who are better than you. This is a mental model more than anything else. In short, by placing the individual in the center (constant competition) they are then improving at a rate faster than they normally would.
Creating “Dedication”
Dedication: This is just a terrible word thrown around by people with no talent. Right up there with passion. We can’t decide which is worse. Dedication is essentially the ability to work every single day on an important task. This is not the same as “working hard” because working hard on something that adds no value is just a waste of time. Therefore, the answer is quite simple. You create another small reward system for completing the most important task. In the day of smartphones and instant gratification all you need to do is say “unable to do anything else until five hours of progress on item A is made”. This requires shutting off all vices before the day begins. Just remember, dedication only counts if the time is being spent on the right task. We don’t even want to know how many hours are wasted working hard on something that could have been done with a single line of software code.
Is This Useful? If you’re already in rhythm and have a good work ethic, then this is the only question you need to ask. If you’re reading this blog we think it’s unlikely that you’re lazy. Most people have no interest in being successful and are more interested in stretching their current run-rate as far as possible (See: most expats – Thailand, coupon clipping etc.).
Applications of this question are clear. The first one gets rid of worry. “Is this useful?” forces you to step back into the present. Sure bad things could happen but worrying about them is the exact opposite of useful. It is a horrible distraction. The second application comes from your interactions with people. If you’re poor or out of shape (enter any item) and you get a distraction ask the same question… Is this useful? If you’re trying to make more money, only respond to conversations that move in this direction until the day is near complete. This sounds “rude” but it also works. If we had no money starting today we would do the exact same thing. Cut off contact with items that don’t make money and return to them when we had the money to put them into the loop again.
Will I Regret This? This is the last question to ask every single day before any task that takes up more than a couple of hours. If you’re already rich it is unlikely that you’ll regret going out at night to party. If you’re late on rent and going to the movies… Something has gone horribly wrong. You’ll regret that decision instantly.
Regret is a moving stick. Some people would regret buying a penthouse apartment if it breaks the budget, while others wouldn’t mind if the penthouse never went up in value (see billionaires looking to buy for simple life style improvement). As a simple test you can group all of your daily activities into the “will never regret” and “will likely regret” buckets. While never is a strong word, using polarizing features gets you to the 80/20 mix between good and bad. Eating a healthy meal and going to the gym are in the “never regret” area unless you’re missing out on a larger opportunity. Going out to party is likely in the “will regret” area if you’re low on cash while in the “never regret” area if you’re already set for life.
By creating this basic list in your head you can then move simple low-end vices into the never regret territory. This can range from golfing to partying to travel. The list never really ends. The basic premise is that as you become more and more financially well off your lifestyle improves to include things that regular people wish they could do on a daily basis.
Maintaining a Personality
Keeping Them Well Rounded: The next step is moving into a completely different direction. The above strategy largely works for making money, athletics and competitive endeavors. The formula is simple since you’re looking at a triangle where the money flows to the top. If you follow the framework it’ll essentially fall into place.
Well rounded essentially means “social life”. Social life is the exact opposite strategy as making money since we have to now relate to your average person. The reality is that less than 4 out of every 100 people you meet will have a million dollars. In fact, if you’re under 40 that number shrinks well below 1% of all people you interact with. Instead of squabbling over the exact percentages, the point is that the hardworking/smart person that was created is not “relatable”. Naturally, people are attracted and connected to people they feel comfortable around and relate to.
The solution: playing dumb. Your average person believes they are smart and they feel they are better than you at first glances. This is human nature. So the person needs to learn the art of appearing dumb. While they are extremely meticulous in work related activities, anything in the social bucket should be thrown out the door. The easiest way to do this is through basic social boosting. All the person needs is a few nice items of clothing, some cash to tip a bartender heavily and being amicable to the staff. You’d think there is something more complicated than this but it isn’t. This would be the easiest way to move the sticks in your favor and get “started” so to speak.
The Jealousy Test: While we understand that people have preferences when it comes to dating, there is still a rough rule for beautiful people. Symmetry of faces, hip waist ratio etc. Instead of telling anyone who to date a good way to see if someone is “batting above average” is when they receive jealousy from other people or they get the classic “she must be with him for the money” comment. Both of these are good signals for someone with solid social skills. If people in your same peer group (rich as well) largely agree you’re doing better we’d say you’re solid from a social skills standpoint.
Pause for a second. There are still people who believe being successful is only related to income and we’ll never agree with that. Being rich and stuck in a personal life equivalent to hell is a failed experiment. What was the point of the money in the first place then? There was no point if it didn’t get you what you wanted in the first place. And. What people want is a fun/exciting life. In short, since we’ve given the overview for a hard working person, you can use this as a “litmus” test for personal life success in the dating category.
The Health Test: This one is tougher. You can’t put a value on good genetics. But. It has to be quite high. If you’re born with good genetics you’re going to age slower, feel more energetic and look younger. So we’ll go with how you look and feel. That is right, despite some biometric markers of health which will likely be optimized by private medicine the key is how old you appear and how you feel on a day to day basis.
Simple example is when you turn 30-35 or so and then 40-45 etc. If people correctly guess your age (the people guessing need to be above age 40), then you’re in “okay” health. If the people are guessing too high and you’re actually younger… then you should do more work on your health. Finally, if people are guessing much lower then you’re in good shape.
Now this isn’t scientific because the point is related to stress. It is stressful trying to get rich, however once you get rich, taking your foot off the pedal is the right move. Stress is the worst item for a person’s health and there is no research paper that is going to convince us otherwise. It impacts your skin, immune system, muscles and brain. Looking at all of these things, since we know your body can take a lot more stress in your 20s, it makes logical sense that you should decrease the wear and tear as you go into your 30s and 40s. There is no reason to sacrifice health for money because you don’t need to.
Doubling Back on Things to Avoid
In just three sections we have structured a successful person (on the right path, which suggests we believe in nurture over nature for most things!). That said… we do need to double back and find “checkpoints” to make sure things are going according to plan. So we’ll highlight a few red flags.
Health Red Flags: If any of the following occur for longer than a short span of time (couple of months) consider it a big red flag: 1) registering as overweight, 2) significant decrease in skin pigmentation, 3) bags under eyes at young age (40), 4) joint/tendon damage that was not caused by injury, 5) foggy memory/disorientation and 6) significant decrease in sex drive (typically hormone related). If any of these flags occur its time to stop and go back to the health tests since we know there is a problem. If they occur for a day or so due to a large project, this is acceptable. If you’re on the fence, we’d go ahead and say there is an issue since health is the #1 priority over everything else.
Financial Red Flags: While we outline our specific numbers in Triangle Investing, we note that every single person is different. A broad stroke is that 1) net worth should continue to go up and 2) the savings percentage should continue to go up. People say this is not possible but that is because they do not run a business where you can grow your income at X% and increase your spending by X%/2 (causing a natural increase to re-investment/savings rate). The only exception will be material recession years where everything is down 50% and if you have entirely retired and now spend your time traveling the world and hanging out.
Social Red Flags: These are harder to admit. Everyone believes their lives are in perfect order (according to their social media posts which are then sold to companies that sell them diet pills (wink)) so we’ll use another bulleted list. 1) still interested in learning “tricks” to meet new women past age 25-30 or so, we’ll be generous and say 30, 2) contact list can be summarized by two industries – work/old friends, 3) every weekend is spent with the same handful of people, 4) unhappy with current living arrangements – already financially independent and 5) weekend activities are the same 80% of the time. All of these items are bad signs for social health, so we’d look into it quickly. The most interesting thing about social red flags is that they are harder to address as a person ages. Good luck turning someone around at age 40 from a boring guy into someone interesting. It rarely happens.
Concluding Remarks and Biases
Naturally, this framework for building a person only works if your beliefs are in-line with this blog. The best way to come up with your own framework is by building out pieces of people you interact with daily. Remember, time is extremely valuable and skipping on any of these items could lead to a lot of regret (visit people nearing death who are much more likely to tell the truth). There is also a lot of reading in-between the lines in this post (for example that feeling “poor” or “mediocre” is dependent on your environment… And…. that competing with people well outside a range doesn’t lead to improvement – a 9 year old swinging at MLB level pitches for example) but we’ll leave that to the reader.
