What do you think of when you think of the word ‘smart’?
Do you think of someone with high intellect who can use a lot of fancy words? Do you think of someone with street smarts who has a way of navigating the world?
To me, intelligence is predicated on your ability to cut through the noise and ultimately get what you want.
The person I’m about to mention fits this bill and has shaped most of my thinking when it comes to learning how to live a good life. Do yourself a favor and watch one of his interviews.
You’ll notice his intellectual humility. If he doesn’t know the answer, he’ll just say so. He understands the extent of his own ignorance more than most, which is one of his psychological superpowers.
He bases his philosophy on real common sense. See, true common sense is uncommon and conventional wisdom tends to be quite off. Many of the most important things you need to know about life are somehow obvious and counterintuitive at the same time.
If you’ve been following my work for a while, you’ve probably had an ‘aha’ moment from reading a very basic and obvious statement I’ve made. I developed my straight to the point style of thinking and writing by studying this person.
The quotes I’m about to share come from memory. Not some Google searches for random wisdom. The lessons are so profound they are burned in my brain.
Enter the mystery genius – Charlie Munger, Vice Chairman of Berkshire Hathway and business partner to Warren Buffet
The Simple Equation to a Good Life
“To get what you want, you have to deserve what you want. The world is not yet crazy enough to reward a bunch of undeserving people.”
The idea of basic personal responsibility has gone out the window in 2020, but that doesn’t change the fact that it’s key to living a great life. Sure, there’s some luck involved in life, but on a long time-scale, you usually get what you deserve.
When it comes to your goals, ask yourself if you currently deserve them, and be honest about it.
I see writers constantly complain about their lack of views, audience members, and income. 10 times out of 10 the person complaining hasn’t even been writing for six months yet. Hell, six weeks.
My blogging mentor said it would take 4-6 years to build a six-figure income from writing. I did it in five years just like he said. How? By deserving a six-figure income. I deserved it because I practiced writing daily for a half-decade.
You need to put in the time to develop the skills you need to get what you want. You need to ride the ups and downs that come with trying to reach a long-term goal. Your sense of entitlement is destroying your chances of a better future.
The time for excuses has long past. You have the internet, access to an infinite amount of knowledge, and an abundance of low barrier to entry opportunities. For those of us not destitute, this idea that you have no chance of upward mobility is, truly, a lie.
Don’t buy into that narrative. It might help you cope with your lack of success, but then you’ll have to spend the rest of your life just coping.
Is that what you want? If not, focus on deserving what you want. Sometimes you won’t get the rewards right away, but give the universe time to catch up to your effort and it will.
How to 10x Your Success
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.
For the 9,398,228th time, I’m going to talk about the exponential growth curve of building skills. Your skills and success in life don’t grow at a linear rate, meaning you get better by the same amount each time you practice. Instead, you’ll spend a decent amount of time making little to no progress, only to experience a dramatic jump.
Most people quit before that jump happens. My views on my writing plateaued for three years straight. Then, in year four, they grew by an order of magnitude, just like that. What ‘happened’ exactly? I don’t know. This is the magic of the growth curve.
Like an investment account, skills compound. You invest the same ‘principal’ over and over again, but the larger your total balance, the easier it is to make more money. Your skills are like that money.
Most of the time when you see somebody blow up out of ‘nowhere’ they’ve been doing the work in the background waiting for their moment to pop.
Your moment will come too.
Truly embrace it as a matter of time.
The Easiest Way to Outcompete Smart People
“It’s kind of fun to sit there and outthink people who are way smarter than you are because you’ve trained yourself to be more objective and more multidisciplinary. Furthermore, there is a lot of money in it, as I can testify from my own personal experience.”
Multidisciplinary knowledge helps you beat your competition. Learn a little bit about a lot of different subjects. Have a T-shaped skillset — you go deep on one skill and then use other skills and areas of knowledge to boost your main one.
Munger goes deep on investing and uses his basic level of knowledge in other areas to shape his decisions.
Most people are specialists. They’re good at one thing but don’t know much about anything else. When you know a little about a lot, you can fill in more of your blind spots than a specialist can. This gives you a competitive advantage when dealing with specialists.
Another one of my famous thinkers, Nassim Taleb, calls this ‘domain dependence’:
“Some people can understand an idea in one domain, say, medicine, and fail to recognize it in another, say, socioeconomic life. Or they get it in the classroom, but not in the more complicated texture of the street. Humans somehow fail to recognize situations outside the contexts in which they usually learn about them.” – N. N. Taleb
You can have all the knowledge in the world a subject, say math and economics, but fail because you’re missing a critical component, say human nature and the psychology of biases.
Get that college freshman level of knowledge in a few key areas, dominate your core skill, and thrive.
How to Win the Game of Life
“If you want to be the best tennis player in the world, you may start out trying and soon find that it’s hopeless—that other people blow right by you. However, if you want to become the best plumbing contractor in Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art. That is an attainable objective, given enough discipline.”
Munger also says you want to find a place where you can “compete with idiots.” This is the unsexy, obvious, and rarely used knowledge you can use to stack life’s deck in your favor.
Why choose a career that doesn’t fit your aptitudes? Why do you think I’m always talking about finding your strengths?
Instead of trying to do something insanely hard, e.g., play in the NBA or build a billion-dollar company, why not build the type of career, business, or life that is achievable for your skill level, say becoming a top career professional, earning a modest online business that earns six or seven figures, becoming the best real estate agent in your state, etc.
Don’t aim to impress people. Aim to win.
I’ve tried many things in my life and I only got a small handful to work, things involving writing and communication. I didn’t search for some magical passion. Instead, I discovered something I had a knack for pretty early on and stuck with it.
You don’t want to live a life where you never focus on mitigating your weaknesses, but why make your life harder by competing in areas that are too difficult?
Like I always say, get to that B+ lifestyle and you’ll be happy. You don’t need to be the world’s best. You can be pretty good. In a world full of mediocre people, pretty good is amazing comparatively.
The Most Powerful Behavioral Tool in the World
“Show me the incentive and I’ll show you the outcome.”
Your success comes from your ability to understand how the world actually works vs the way you think it should work.
This doesn’t mean become a pessimist, but it does mean avoiding becoming a blind idealist. There are these utopia chasers out there who think they can legislate human nature and incentives away when this is impossible.
People often do what they’re incentivized to do, period.
A great example, us humans today think we’re civilized. And, mostly, we are. But not because of our higher nature. No, we don’t do a bunch of crazy things because there are laws against such things and the punishment incentivizes us not to commit crimes.
In the book about his life, Poor Charlie’s Almanack, he mentions the invention of the cash register as having a huge impact on rampant theft at the time. Without the incentive of knowing that the employer would know exactly how much money should be in the register, people stole.
I’m sure some of you think you’re above the incentives that drive your behavior and there are a lot of smart people out there who are glad you think that, trust me.
Why? Because those types are the easiest to trick. They’ll come up with the most elaborate reasons for decisions they didn’t make through pure free will. They’ll dance for the puppet master and defend him at the same time.
This is the power of incentives.
You want to get on the right side of this power.
If you want people to behave the way you want, create the right incentives and boundaries for them — reward good behavior, and punish bad.
If you want to persuade people, figure out what motivates them and bring them to your cause by creating a situation they want to be a part of.
When looking at the state of society and our discourse, understand the incentives driving the behavior to stay calm — the media has to be salacious because they’re incentivized for clicks and politicians have to pander, lie, and make false promises to get elected then the incentive to actually do anything goes away as soon as they’re in office.
Look through the lens of incentives and everything in life will start to make sense.
Flip the Success Equation on Its Head
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” “Invert, always invert: Turn a situation or problem upside down. Look at it backward.”
There are too many variables in the world to try to predict anything. You can make educated guesses of course, but you can never be exact. The concept of inversion will get you closer to certainty than any other method.
Instead of trying to figure out exactly what will work, avoid doing what definitely won’t work. Avoid behaviors and decisions that will surely lead to failure.
Even if you don’t know the perfect diet, you know that drinking soda, eating fast food, and consuming a bunch of candy and desserts will surely ruin your health.
You might not know exactly how to be successful, but you know that being lazy, or as Munger puts it ‘sloth and unreliability’ will definitely lead to failure.
There’s a long list of items like this, e.g., hanging with the wrong crowd, getting into tons of consumer debt, gambling, getting hooked on drugs, wasting all your weekends, constantly watching T.V., etc.
You know the BS you need to cut out of your life. If you simply cut those things out you’d be much, much, closer to a better life. The more you screw up, the more energy you have to use to fix your screw-ups. So, stop screwing up.
Quit trying to be smart. Stop being dumb.
The Cheat Code to Life
I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.
I can’t believe books are so cheap. Good books should be worth at least $100. I’ve read some books that are worth $100,000. You can get damn near anything you want in this world if you learn how to do it.
You don’t need to be a genius. All the information you’d ever need is right in front of you if only you’d muster up the energy to use it.
Naval Ravikant puts it well:
The tools for learning are abundant. It’s the desire to learn that’s scarce.
This is why I feel no sympathy for most people.
You’re broke? Learn how to make money. There are tens and thousands, millions of books, videos, courses, programs, tapes, you name it on the subject.
You can take a cheap online course or watch a free YouTube video that will teach you how to do literally anything. I just found a video on how to build a rocket. The complaining needs to end. Nobody is putting a gun to your head and forcing you to watch T.V. instead of learning how to start a business, how to write, how to code, how to do real estate, how to start a clothing company, whatever.
You can take classes from Ivy league university for free. The same classes students are paying $50,000 a semester for. Sure, they get the stamp of approval and the degree, but the knowledge is enough in 2020, trust me.
Credentialism is dead. If you have skills, knowledge, and the ability to implement both over a long period of time, you can create your own career from thin air.
The application of knowledge is power. Take what you learn, build that latticework of mental models, and use it to take over the damn world.