As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything”
The first rule of happiness is low expectations
It’s been like this forever. Montesquieu wrote 275 years ago, “If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”
These pieces of advice are easier said than done. I think it’s often hard to distinguish high expectations from motivation. And low expectations feels like giving up and minimizing your potential.
Something that’s built into the human condition is that people who think about the world in unique ways you like almost certainly also think about the world in unique ways you won’t like.
It’s so easy to overlook, and it causes us to have poor judgment about who we should look up to and what we should expect from very successful people.
Either you want someone else’s life or you don’t. Either is equally powerful. Just know which is which when finding role models.
The world breaks about once every ten years, on average—always has, always will. Sometimes it feels like terrible luck, or that bad news has new momentum. More often it’s just raw math at work. A zillion different things can go wrong, so at least one of them is likely to be causing havoc at any given moment. And given how connected we are, you’re going to hear about it.
People don’t want accuracy. They want certainty.
The brain of man is programmed with a tendency to quickly remove doubt by reaching some decision.
It is easy to see how evolution would make animals, over the eons, drift toward such quick elimination of doubt. After all, the one thing that is surely counterproductive for a prey animal that is threatened by a predator is to take a long time in deciding what to do.
Stories are always more powerful than statistics.
If you look, I think you’ll find that wherever information is exchanged—wherever there are products, companies, careers, politics, knowledge, education, and culture—the best story wins.
Perhaps no one has mastered the art of storytelling better than comedians. They are the best thought leaders because they understand how the world works, but they want to make you laugh rather than make themselves feel smart. They take insights from psychology, sociology, politics, and every other dry field and squeeze out amazing stories. That’s why they can sell out arenas while an academic researcher who discovers a great insight about social behavior can go unnoticed.
When a topic is complex, stories are like leverage.
Jeff Bezos once said, “The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There’s something wrong with the way you are measuring it.
Attempting to distill emotional and hormonal humans into a math equation is the cause of so much frustration and surprise in the world.
Physical running limits on a test track may be different than physical limits during an Olympic final, which may be different than physical limits when being chased by an ax murderer.
This helps explain crazy stories about people lifting up cars when someone is pinned underneath, their life in jeopardy. Capabilities are a function of in-the-moment circumstances.
Keynes, the British economist, had discovered in his work that economies are not machines. They have souls, emotions, and feelings. Keynes called them “animal spirits.”s
Every investment price, every market valuation, is just a number from today multiplied by a story about tomorrow.
The ones who thrive long term are those who understand the real world is a never-ending chain of absurdity, confusion, messy relationships, and imperfect people.
calm plants the seeds of crazy
After slapping Chris Rock on stage at the Oscars, Will Smith turned to Denzel Washington for advice. Washington said, “At your highest moment, be careful. That’s when the devil comes for you.”
Stress focuses your attention in ways good times can’t. It kills procrastination and indecision, taking what you need to get done and shoving it so close to your face that you have no choice but to pursue it, right now and to the best of your ability.
what makes life mean something is purpose. A goal. The battle, the struggle—even if you don’t win it.
Be careful what you wish for.
A carefree and stress-free life sounds wonderful only until you recognize the motivation and progress it prevents. No one cheers for hardship—nor should they—but we should recognize that it’s the most potent fuel of problem-solving, serving as both the root of what we enjoy today and the seed of opportunity for what we’ll enjoy tomorrow.
On a similar note, author Yuval Noah Harari writes: “To enjoy peace, we need almost everyone to make good choices. By contrast, a poor choice by just one side can lead to war.”
The idea of “complex to make, simple to break” is everywhere. Construction requires skilled engineers; demolition requires only a sledgehammer. Even when something doesn’t break easily, the thing that could break it is usually simpler than whatever made it.
Big risks are easy to overlook because they’re just a chain reaction of small events, each of which is easy to shrug off. So people always underestimate the odds of big risks.
That’s the balance—planning like a pessimist and dreaming like an optimist.
If you understand the math behind compounding you realize the most important question is not “How can I earn the highest returns?” It’s “What are the best returns I can sustain for the longest period of time?”
The prisoners who constantly said, “We’re going to be home by Christmas” were the ones whose spirits were shattered when another Christmas came and went. “They died of a broken heart,” Stockdale said.
There is a balance, he said, between needing unwavering faith that things will get better while accepting the reality of brutal facts, whatever they may be. Things will eventually get better. But we’re not going home by Christmas.
you can only be an optimist in the long run if you’re pessimistic enough to survive the short run.
In the middle is the sweet spot, what I call the rational optimists: those who acknowledge that history is a constant chain of problems and disappointments and setbacks, but who remain optimistic because they know setbacks don’t prevent eventual progress. They sound like hypocrites and flip-floppers, but often they’re just looking further ahead than other people.
The trick in any field—from finance to careers to relationships—is being able to survive the short-run problems so you can stick around long enough to enjoy the long-term growth
Save like a pessimist and invest like an optimist.
Plan like a pessimist and dream like an optimist.s
Many people strive for efficient lives, where no hour is wasted. But an overlooked skill that doesn’t get enough attention is the idea that wasting time can be a great thing.
Psychologist Amos Tversky once said that “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.
Nassim Taleb says, “My only measure of success is how much time you have to kill.” More than a measure of success, I think it’s a key ingredient. The most efficient calendar in the world—one where every minute is packed with productivity—comes at the expense of curious wandering and uninterrupted thinking, which eventually become the biggest contributors to success.
Just like evolution, the key is realizing that the more perfect you try to become, the more vulnerable you generally are.
Charlie Munger once noted: “The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end.”
If you recognize that inefficiency—“bullshit,” as Pressfield puts it—is ubiquitous, then the question is not “How can I avoid all of it?” but “What is the optimal amount to put up with so I can still function in a messy and imperfect world?”
What’s easy to miss is that there are bad things that become bigger problems when you try to eliminate them. I think the most successful people recognize when a certain amount of acceptance beats purity. Theft is a good example. A grocery store could eliminate theft by strip-searching every customer leaving the store. But then no one would shop there. So the optimal level of theft is never zero. You accept a certain level as an inevitable cost of progress.
A good rule of thumb for a lot of things is to identify the price and be willing to pay it. The price, for so many things, is putting up with an optimal amount of hassle
The only thing harder than gaining a competitive edge is not losing an advantage when you have one
The grass is always greener on the side that’s fertilized with bullshit.
Most things are harder than they look and not as fun as they seem.
Everyone’s dealing with problems they don’t advertise, at least until you get to know them well. Keep that in mind and you become more forgiving—of yourself and others.
Nothing is more persuasive than what you’ve experienced firsthand.
Comedian Trevor Noah once discussed apartheid in his native South Africa, noting: “If you find the right balance between desperation and fear, you can make people do anything.”
Jim Carrey once said, “I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.”
Part of this is the same reason that predicting how you’ll respond to risk is difficult: It’s hard to imagine the full context until you experience it firsthand.
Long term is harder than most people imagine, which is why it’s more lucrative than many people assume.
The long run is just a collection of short runs you have to put up with
Long-term thinking can be a deceptive safety blanket that people assume lets them bypass the painful and unpredictable short run
Your belief in the long run isn’t enough. Your partners, coworkers, spouses, and friends have to sign up for the ride
Patience is often stubbornness in disguise.
The world changes, which makes changing your mind not just helpful, but crucial
But changing your mind is hard because fooling yourself into believing a falsehood is so much easier than admitting a mistake.
Permanent information is harder to notice because it’s buried in books rather than blasted in headlines. But its benefit is huge. It’s not just that permanent information never expires, letting you accumulate it. It also compounds over time, leveraging off what you’ve already learned. Expiring information tells you what happened; permanent information tells you why something happened and is likely to happen again
Simplicity is the hallmark of truth—we should know better, but complexity continues to have a morbid attraction. When you give an academic audience a lecture that is crystal clear from alpha to omega, your audience feels cheated… . The sore truth is that complexity sells better.
Complexity gives a comforting impression of control, while simplicity is hard to distinguish from cluelessness.
Wounds Heal, Scars Last
What have you experienced that I haven’t that makes you believe what you do? And would I think about the world like you do if I experienced what you have?
A massive flood in 1924 swept through Leningrad, where Pavlov kept his lab and kennel. Flood water came right up to the dogs’ cages. Several were killed. The surviving dogs were forced to swim a quarter mile to safety. Pavlov later called it the most traumatic thing the dogs had ever experienced, by far.
Something fascinating then happened: The dogs seemingly forgot their learned behavior of drooling when the bell rang.
Different conditions productive of extreme excitation often lead to profound and prolonged loss of balance in nervous and psychic activity … neuroses and psychoses may develop as a result of extreme danger to oneself or to near friends, or even the spectacle of some frightful event not affecting one directly
wo things tend to happen after you get hit with something big and unexpected:
You assume what just happened will keep happening, but with greater force and consequence.
You forecast with great conviction, despite the original event being improbable and something few, if anyone, predicted.