Axioms for Maximum Achievement

Starting Out – Building a Mechanism for Achievement

This is our very first post. 

All of you are probably reading this blog because you are not content with where you are currently at in life and want to successfully transition into a better version of yourself. You want to make more money, become financially independent, reach peak physical conditioning, expand your dating options, feel happier, so on and so forth. 

All of the above desires (being rich, financially independent, athletic, happy, etc.) can be summarized into one objective — achievement. You can attain them by achieving. Achievement embodies everything from doing ten push ups to closing a big deal to preparing a healthy lunch to growing your investment portfolio value by 50% over 4 years.

You will feel a strong sense of satisfaction over time by focusing the majority of your energy towards achieving. On top of that, consistent achievement over long periods of time will put you in a better position to experience greater levels of fun and happiness. As an example, very few people enjoy working for an employer, but this is a necessary step for most people when they are at the start of their career journey and have little in the way of money and skills. If you have just graduated from college, the appropriate initial option will usually be finding the right career opportunity with a company that has a strong track record of performance. The work here will likely be stressful and grueling, but you grind it out for the next few years so you can build transferable skills and a strong business network. You are also collecting large paychecks that are reflective of your performance (no point being an employee for a fixed wage or monthly salary) and saving this up. After 2-5 years you have the capabilities to go out on your own, so you resign and start your own business within a similar space. You pick up more and more clients and begin delegating your work to your own employees. You are now making 10X of your previous income and have reduced your personal workload by 75%. In the process, you have derived greater satisfaction through building skills, financial freedom through increased wealth, and more free time through the ability to pay and manage others. You can now spend more time on meaningful experiences that you previously could not afford, like a two-month vacation to Europe whenever you feel like it. This will in turn make you a much happier person than you previously could have been with limited time, money and resources. 

Every single person owes it to themselves to carve out and follow their own path towards maximum achievement. By delaying gratification, you will put yourself in the position to live and experience happiness, growth, and fulfillment at 100X the rate you otherwise would with instant gratification. This a powerful quality that 99% of people will never get to experience. 

With that said, let’s get into the most important rules to follow in order to reach your maximum peak of achievement. We refer to these rules as Axioms, and have divided the axioms into three parts: Axioms for Physical Transformation, Axioms for Efficiency, and Axioms for Life Progression.

Axioms for Physical Transformation

Axiom #1 – Improvement is Not Linear.

Real change is slow, erratic, painful and even straight up heart-wrenching. The human body functions in a strange and counterintuitive way. Beginners will experience exponential growth when they first hit the gym, but will then hit a ceiling for extended periods of time until one day they suddenly reach a dramatic breakthrough after many months of stagnant progress. 

The majority of people will not experience these breakthroughs due to limited willpower and patience. They will hit the gym for two weeks and feel invincible during that time as they make the standard gains that beginners all make. After two weeks they will hit a plateau for one week straight and then lose all motivation to continue. Just look at January of every year. For the first two weeks of the year gyms are packed to maximum capacity with people who have made New Years resolutions to go to the gym every single day. By the end of week three attendance rates suddenly drop by 50% and by the end of the month gyms are operating at below 20% of initial attendance. Gyms know this and sell annual memberships at huge discounts in the weeks leading up to Christmas. Even with these discounts, the profit margins are enormous because new years resolutioners will stop showing up after January.

The other point to note is that as you spend more time pursuing and growing your capabilities within a physical activity, the jumps will get smaller and smaller. This is particularly the case with sports. Once you have made all the big gains you will be in the top 20-30% of all participants (not hard to do at all). Now it is time for a series of smaller gains to reach a new high. This is the difficult part as it involves a lot of consistent dedication for what is commonly perceived to be small and insignificant gains. In basketball, this might involve one full year of shooting 500 three pointers a day so that you can increase your in-game three-point shooting percentage from 32% to 35%. Then repeating the same process again for a second year in a row and bringing the shooting percentage up further to 37%. To most people this might not seem like much, but this could be the difference maker that elevates you from the top 20% into the top 10% of players in your league.

To get to the next level you must really test yourself emotionally. Sometimes you will train and exercise hard for an extended period but realize that your performance numbers have actually decreased. This is completely normal, but most people will start to freak out the first time this happens and completely give up. When you encounter such situations, understand that this is part of the learning and adjusting process for your mind and body. Think of it like making long-term gains in the stock market. You might grow by 10% one month, then fall by 3-4% the following month before growing again by another 10%. Just like in investing, approach fitness with a rational mindset and strong emotional control. This will virtually guarantee you strong returns in the long-term. 

Axiom #2 – Challenging Your Body Physically Will Translate Into Stronger Work Ethic and Performance In All Other Aspects of Your Life.

From a productivity and efficiency standpoint, it is much harder to have a good day if you do not start your day with a workout, ideally in the early morning when most other people are still asleep. Make this workout as physically challenging as possible without putting yourself at risk of injury. Aim to workout for 1-2 hours on weekdays and 2-3 hours on weekends. 

This can include everything from weightlifting to cardio to enhancing individual sports skills, but make sure you are averaging at least forty minutes to an hour a day of lifting weights. Whatever kind of workout you are doing, the important thing is to really challenge yourself so that you are already puffing heavily halfway into the workout. By the end of it you should be close to reaching your physical limit. 

In the process you will suffer a lot. Are you already in tears from squatting so much to build that extra pound of muscle? Good, be prepared to go twice as hard at it the next time round. Do not spend excessive amounts of time before and during the workout thinking about how painful it will be. The longer you spend trying to find out how to minimize discomfort, the more time you will waste. By persevering over and over again through these tough periods, you will permanently increase your willpower. You will soon realize that the pain you experience will repay you 50X more than what you have suffered through.

Once you have finished your challenging workout, go and grab a healthy breakfast to re-energize yourself. Then go about the rest of your day doing whatever it is that you need to do to become successful. You will already have one major achievement for the day before most others have even gotten out of bed, and this drive, confidence, and willpower will translate into everything else, whether it be studying for your Computer Science degree, closing big deals in your sales job, or grinding through another day as an Investment Banking analyst.

Try this and you will be shocked by how powerful the feeling is. Follow this routine for 100 days in a row and it will turn into a habit that lasts with you for the rest of your lifetime. Potentially life-changing stuff right here.

Axiom #3 – Health is Your Greatest Asset.

Take care of your body every opportunity you get. Without a healthy body and mind, everything else you have or could have becomes completely meaningless. If we had the option, we would give away everything we have ever owned to become five years old again. You cannot get your time back and even the richest people die. And once you die, you are gone forever.

As we have already mentioned, avoid injuries like the plague. Each injury can sideline you for 3-6 months, and if you are careful it is possible to avoid big injuries if you are not a professional athlete. If you do get injured, stop whatever you are doing immediately and go seek medical attention. Work with a qualified physical therapist on recovery exercises for as long as necessary. DO NOT TAKE RISKS HERE.

Take all the basic precautions and never skip a single one. These include the following: 

1. Develop a fitness plan that includes cardio, strength training, and flexibility. This will decrease your chance of injury. 
2. Alternate between different muscle groups every day. 
3. Always stretch beforehand. Each stretch should begin slowly and last until you reach a point of muscle tension. Aim to maintain each stretch for around 20 seconds. 
4. Always stay hydrated. When exercising outdoors avoid excessive exposure to the sun. 
5. Use the right equipment and gear and wear shoes that provide good support.
6.  Get sufficient rest and sleep at least 7-8 hours on most days.

Axiom #4 – Invest Big $$$ On Your Health.

Be prepared and willing to invest $$$ into your health. This includes spending on good nutrition and maintaining a healthy diet 95+% of the time. Many healthy foods tend to be quite expensive and will eat up a substantial chunk of your income early on. Be prepared to stomach these costs for the first 1-2 years of your career. Afterwards the cost of nutrition should remain pretty constant throughout your life and with each passing year will form a more and more insignificant proportion of your spending. Low-quality trash items like McDonalds and fried chicken should be avoided altogether. Yes, we mean 100% abstention. Do not listen to people who say it is okay to go to McDonalds in moderation, like once or twice a month. If you are really craving food go spend $400 to try out a new Michelin Star restaurant. Your body will thank you later.

Additionally, it is key to also spend on the right services and technologies. Here are some examples:

• Gym Membership: This goes without saying. Start with a membership at an affordable gym and eventually work your way up to a high-end gym. High-end gyms provide immense value and also attract higher-quality people, which is invaluable for networking and improving your physical/athletic standards. 
• Supplements: Before using any dietary supplements, you should understand that good nutrition and hydration are the most important means to achieving optimal health and physical performance. Supplements can be used on top of a strong nutrition plan in order to gain weight, remedy a known nutrient deficiency, strengthen energy production, and streamline the recovery process. Personally, we recommend Cod Liver Oil, which is excellent for you bone and joint health. It is high in Vitamin A (good for eye, brain and skin health) and Vitamin D (helps to maintain healthy bones through regulating calcium absorption).
• Massages: Many of you reading this are in your early-to-mid twenties and will likely overlook this one. However, doing so will be one of those grave mistakes you will come to regret in hindsight. Time is the number 1 asset you have, and massages are a mechanism for slowing down the hands of time. This is for those who want to continue to look and feel good heading into their forties and fifties.
• Facial Cleansers: Part of staying healthy is looking good which means having a skin care routine. Your skin is one of the first things people see and is the no. 1 determinant between looking old vs. young.
• Cryotherapy: This refers to treatment that relies upon the use of freezing temperatures. Picture yourself sitting inside a cold tank for 3-5 minutes. Pretty simple, right? This is still a very new form of treatment and is not cheap, so you will probably not be able to afford it right away in your early twenties. Nonetheless, cryotherapy is extremely effective and does wonders for muscle healing and faster recovery from athletic injuries.
• NormaTec Compression Boots: These are great if you are a weekend warrior or heavy exercise junkie with sore legs. It improves blood flow and is beneficial for speeding up muscle recovery, improving flexibility, reducing muscle fatigue/muscle pain, improving athletic performance, etc. Definitely worthwhile investing some Benjamins on these boots.

This is not a post that is specifically focused on health/body spending and there are plenty of other supplements, services and technology that we have not discussed here. Depending on your age/body/health situation up to 60-70% of your health spending can be tailored specifically to meet your own needs. We will release a more detailed post at some point in the future that will cover this topic in more depth.

To reiterate, be prepared to invest heavily in your body. The importance of this axiom can not be understated. Look no further than Los Angeles Lakers power forward Lebron James. He is 37 years old and now in his 19th season in the NBA but still averaging 29 points/7.5 rebounds/6.5 assists on 52.2% shooting. These are elite stats that are enough to keep him in the MVP conversation for the season, which is pretty incredible considering every other MVP candidate (except for Steph Curry) is at least a decade younger than him. In order to maintain this level of health and physical performance, Lebron spends ~$1.5MM per year on his body. This includes cryotherapy, hyperbaric chambers, NormaTec boots, personal chefs, trainers, etc.

Most of us will never become professional athletes but our dedication and commitment to ourselves should be reflected in intelligent and generous spending decisions on health. The beauty of all this is that as we grow richer, we can increase our spending amounts on health while simultaneously reducing the proportion of health spending relative to our total expenditure or net worth.

Axiom #5 – Test and Find Your Limits.

When you are young, preferably during your twenties, challenge yourself physically and mentally until you reach breaking point. You are probably reading this and thinking to yourself that this does not sound very healthy at all. Well, hear us out first.

In most cases, we all think we know our actual limits when we really do not know them well at all. For instance, if you are a college student in the library preparing for your Statistics midterm you might feel like you have reached the point of complete mental exhaustion after two hours of study. However, the reality is that for most people this initial feeling of complete exhaustion is a sign that they have only used up 30% of their energy (this is backed up by scientific studies). In order to take full advantage of your mind and body you need to find out what your realistic limit is and then work to 85%-90% capacity of that limit. If your limit is nine hours of study in a row you might study for an eight hour period (with 10-15 minutes break every two hours).

To add to this point, the other objective of this axiom is for you to break these limits one time and collapse afterwards. Yes, you read that right. We want you to break each limit one time to the point where you feel sick or pass out. For example, every single person is capable of pulling a single all-nighter but it will be useful knowledge for you to find out how many all-nighters you can do in a row. Test this out by working through full 24-hour days. Your limit will come at the point when you become unconscious from fatigue. Perhaps you make it to Day Three without any sleep and then collapse on your bedroom floor. Or you make it to the morning of Day Four before passing out with your face inside your breakfast bowl.

By going through this experiment once so that you can pinpoint your maximum limit, you can make sure that you never ever exceed this limit again. We don’t recommend you pull any all-nighters at all, but the purpose of knowing such a limit is so you can effectively deal with special developments. For instance, if you come across a rare deal that can add $4MM of revenue to your business but need to do a lot of work in order to get the deal, you can pull two all-nighters in a row before getting some rest, knowing that you previously passed out in the middle of Day Three. 

This axiom is also important when it comes to alcohol. Going out to clubs and parties 4-5 times a month is crucial for the development of your social skills and contacts. Yes, you should be working extremely hard most of the time, but you need a little bit of moderation so you don’t turn into a robot. Also, talking to and connecting with complete strangers is not exactly a comfortable experience. Most activities that make you uncomfortable are good for your development, so there’s no reason to completely cut them out of your life. Nonetheless, find your limits with alcohol and never exceed them. The limit is the point that results in you waking up the next morning with a hangover. Adhering to this limit means you can reach the point of being tipsy but never drunk. Getting drunk is horrible for your health and substantially reduces your ability to make rational and good decisions.

Axioms for Efficiency

Axiom #1 – If You Cannot Change Or Fix It In The Present Then Ignore It.

This is possibly the most challenging axiom to adhere to in this entire post. Even after many years of consciously practicing this axiom, we continue to find ourselves worrying at times about possible issues or escalations when we should instead be fully focused on something else.

There is a name for this behavior- Anticipatory Anxiety. This is where you experience fear and worry around bad developments that could happen. It can occur in many different scenarios and contexts, but most commonly revolves around possibilities you cannot predict or control in the present. For example, you just finished your Linear Algebra midterm which you found to be very easy because you studied a lot for it. But after handing it in and leaving the Lecture Hall, you hear many other classmates of yours discussing the solution to one major question and realize that they all put down a different answer from you. The question is worth 20% of the exam points and now you can’t stop worrying throughout the rest of the day about getting a bad grade. This worry impacts your focus for the rest of the day and you do not end up preparing for the remaining exams. The next day you take an exam for another class and completely bomb it. You are now feeling even more anxious. One week later, you get your midterm grade back for Linear Algebra and realized you got that entire question right and scored 96%, but only scored 74% for the other exam.

There are so many other examples but the one above is a classic scenario which we are sure everyone has personally experienced at some point. Due to human evolution, we are all programmed to think and behave in ways that conform with others in the group rather than as individuals. In this instance, even though you may have originally felt confident about your answer in the exam (hopefully because you studied effectively for it), you became unsure as soon as you found out that 80-90% of others came to a different conclusion. Instead of feeling confident about yourself like a high achiever should, you proceed to worry excessively about a worst-case scenario that may never happen (scoring poorly and jeopardizing your GPA). But the exam is already over and there is nothing you can do to change the outcome. In the end, the final score for the first exam proved that all that worry and stress was much ado about nothing. Had you stayed confident after the first exam and focused your energy on preparing for the second, you would have come out on top with high scores for both.

With that said, we completely understand if you are never able to fully implement this axiom into your life. There are many problems out there that can really make you want to tear your heart out. By sitting down at your desk and hustling hour after hour you are exposing yourself to more opportunities for achievement but also increasing the number of potential problems that may lead to failure. In the end, there will always be a new problem or uncertainty that is new to you, and you should always approach these with the urgency that they warrant (assuming something can be done about it). However, you MUST find a way to substantially reduce the amount of time you spend feeling worried or stressed about unchangeable circumstances. The best way to do this is to constantly push yourself to work hard, think intelligently, and take calculated risks. Doing so will expose you to more problem-solving opportunities that can either translate into achievements or failures. By encountering the same problems and failures more than once, you will become unfazed by them over time. Yes, a completely brand new source of worry will always come up again at some point in the future, but your overall stress levels will fall substantially.

Axiom #2 – Once You Have Developed Mastery, Get Other People To Do the Work For You, But Never Teach Them Enough That They Can Do Without You.

Use the knowledge, capabilities and work ethic of other people to advance your own projects. In doing so, you will save a substantial amount of time and energy while simultaneously projecting a public image of strong competency and performance. Ultimately, those who you hired to work for you will do so quietly while you reap the huge rewards from financial profits and increased brand recognition.

You will notice this dichotomy play out in your workplace. Maybe you are an investment banking analyst at a boutique firm. You are working long hours doing all of the grunt work involved in putting together a PowerPoint deck. Your manager is only in the office half the time and the only thing he seems to do is read the news and come around every two hours to check your progress and pick out spelling mistakes. It’s Friday night and you have plans to meet the beautiful Argentinian girl you ran into at Whole Foods but your manager comes up to you and tells you that you need to completely redo the 100-page deck over the weekend. You cancel the date with the girl and clock in another 20 hours over Saturday and Sunday. Monday morning comes by and your manager comes and grabs your PowerPoint presentation and leaves the office without even reading it. He meets with the client and delivers the presentation without you in attendance. In the end, he gets the engagement contract from the client which is reflected in his fat bonus check, while you receive a much smaller bonus payment despite doing all of the work and sacrificing your sex life.

The takeaway here is threefold: Firstly, the recognition for creating or inventing something is of greater importance than the invention itself. Before you set out on an endeavor, you must first ensure that you have a clear strategy set out to block out any vultures and secure the credit for yourself. Equally as important is ensuring that you do not enable anyone to piggyback or share credit for your own hard work. In order to achieve this, you must take all possible measures to keep your ideas and inventions a secret until after you acquire formal recognition. For example, John Grisham, the author of legal thrillers whose books have sold over 300 million copies across the globe, famously does all of his writing on a computer that is disconnected from the internet. Every morning he wakes up before 7 am, leaves his house without bringing any electronic devices, and heads into a nearby shack located on his grounds. From here he writes on a disconnected computer all the way through to noon. He has no internet in this shed and will go back to his house if he wants to check his emails on his smartphone or laptop. He does this to prevent his work from getting hacked and stolen.

Secondly, learn to leverage other people’s work ethic and capabilities and combine them with your own intangible skills. By intangible skills, we are referring to skills that are valuable because they are exclusive to yourself. In the above example, the manager leveraged the IB analyst’s work ethic to create a well-crafted presentation deck. He then combines the result of the analyst’s work ethic with his own intangible skillset, this being his networking ability and client contacts (something the analyst does not have). By strategically meeting with the client on his own, he takes 100% of the credit while doing the minimal amount of work.

This brings us to the third takeaway: Learn to keep people dependent on you by never giving them enough to erase your value in the equation. Once you have developed mastery and influence in an area, you must be strategic about what you give and withhold from others so you can increase your upside while limiting your exposure to unwanted downside risk. Our manager above does this seamlessly; he hands off a critical and time-consuming task that he can clearly do very well but does not want to waste time and energy on, while simultaneously keeping the main component of his value to the company, his Rolodex of contacts, strictly to himself. Had be brought the analyst along to the meeting it would only be a matter of time before the analyst begins to challenge his usefulness to the business. 

Of course, depending on your circumstances, you may not always have the ability to stick to this axiom. The unfortunate and undeniable reality is that you will most likely become a victim of this axiom at some point in your early twenties. If you are a fresh college graduate then you will have little mastery in a high-demand skill which will make it difficult for you to dictate your own terms. Throughout the first few years of your career you can expect many instances when someone else will take credit for your work. Treat this as part of the learning process. If you go into investment banking all you will be doing the first two years is grinding nonstop on work that your boss will use to make himself look good. If you are in sales the likelihood is that your immediate manager will piggyback off your closed deals and be compensated with an equal if not greater commission payout as yourself. All of this is the norm, and for you the priority should be to learn how to navigate this type of environment while developing the intangible skills necessary to become a critical revenue generator. Once you achieve this you will be in position to begin managing others and leveraging this axiom. 

Axiom #3 – Avoid Overachievement and Perfectionism. When Your Gains Are Limited, Move Onto Something Else.

In a way, this is kind of the opposite of being lazy and wasting time. Overachievers and perfectionists will follow a set of lengthy goals and criteria down to a T. They will succeed with flying colors, stepping above and beyond the requirements. They will continue to add finishing touches to their work even after fully satisfying all requirements, and with little pause or rest, move on to their next objective once they feel they have sufficiently over-delivered on the existing accomplishment.

Society tends to really glorify the overachiever. This is understandable. Genuine hardworking people are a precious commodity anywhere in the world and most people equate hard work directly with success. However, smart people know that this is not the case. Working hard can better position you for success, but effort does not directly translate to positive outcomes. Smart work is a far greater indicator, and most successful people are able to combine intelligent thinking with an above average to high work ethic. This is precisely the problem with overachievement: It goes against the very concept smart work.

If you are committed and capable of smart work, you would never agree to waste your own time, which is exactly what overachievement and perfectionism is. It is extremely inefficient to beat a dead horse when minimal value can be derived from doing so. For example, if you are a college student preparing for your final exams, there is fundamentally no difference whether or not you score 93% or 100% on an exam when both scores qualify as As. Rather than studying further for an exam that you are already well-prepared for, you should allocate this extra effort towards preparing for another exam that you feel less confident about. As long as you can guarantee an A, you should move on to studying for another exam where your time and effort will generate the greatest percentage point return.

The same principle applies in business. When building your own online business, you should always conduct effective market research beforehand. There is no point in bringing a product to market if the market is too small, irrespective of how revolutionary and cutting-edge the concept may be. Similarly, if a specific segment of the population is no longer generating a good ROI, you should explore another demographic, adjust your product, create a completely new product, or revamp your existing strategy. Do not take on ambitious challenges based upon a perfect outcome, as there is a low probability that this outcome will be achieved and a high likelihood that your bank account, resources, and time will all take a hit. 

The other point to note is that the only way you can achieve consistently is by accepting and learning from failure. But for the overachiever everything is about not just succeeding by also exceeding all expectations. It’s 100% push and 0% pull. Again, any smart person will recognize that this is not feasible. As mentioned above under Physical Transformation Axiom #1, improvement is not linear. In order to grow and improve and achieve, you need to encounter and prepare for setbacks and failures that will come along. But overachievers hate failure and cannot accept even the smallest setback. They will do everything they can to avoid any type of failure and will in the process miss out on any significant learning opportunities by being so risk averse.

Axiom #4 – Focus On the Foundation Before Getting Into the Details. Similarly, Attack the Foundation and the Entire Building Will Crumble.

Time is your most valuable asset. We cannot emphasize this enough. Given that time is directly correlated with efficiency, the best way to conserve it for any significant task or project is by working on the foundation first before going into the nitty-gritty details. Successfully placing the foundational pillars should generate the greatest returns, after which you can focus on the smaller details.

Let’s use learning a language as an example. Not all words are created equal. In every single language, people use some words far more frequently than others, so why not start by finding a list of the most commonly used words and learn them first. Pick the language you want to study and go on Google and search for a Word Frequency List (WFL) for that particular language. This will usually consist of the 1000 to 2000 most frequently used words in the language. The WFL is an incredible tool; learning the 1000 most frequent words will help you recognize around 75% of what you read, and with 2000 words this goes up to 80%. However, if you are already studying or have studied a foreign language, we can bet with absolutely certainty that you have probably never used the WFL. 99%+ of all language learners study by using grammar books and/or attending language classes. But neither of these methods are efficient, nor do they abide by this axiom. The reason the WFL is not commonly used is because it would make a lot of the products and services coming out of the educational industry unnecessary and redundant. It is also much easier for educators to write language study material and for teachers to plan lessons by categorizing the content around certain themes (i.e. transportation, vegetables). Of course, we know which method is superior. Every single foreign language student in the world would be better off learning words such as day, bedroom, and economy rather than broccoli and spinach. If you are interested in picking up a foreign language to fluency, we highly recommend this book.

The reverse is also true. When you are on the offensive trying to take down any kind of threat to your goals or livelihood, whether it be a competing business, physical attacker, or even personal shortcomings that you know are holding you back, you should always attack the foundation first. According to the writer Robert Greene, when you “strike the shepherd the sheep will scatter.” Whenever we encounter a particularly challenging problem, we tend to see it as a multi headed monster and are not sure about which head to deal with first. However, the reality is that the source of some of your greatest problems can often be tracked to a single individual. This person (the shepherd) is very charismatic and eager to influence others (the sheep). He may also be very antagonistic towards you, possibly because your presence is a threat to his monopolistic dominance in a particular arena. Always take action immediately to counter this person before he is able to exponentially grow the severity of your problem by raising more sheep. The cost may seem astronomical at first, but do everything you can to move him away until you are absolutely sure that he can never pose a threat to you again. This could come in many forms:

• Physical/Geographical: You are a college student who has signed a lease and brought in two roommates. They are constantly blasting music all the time, making it impossible for you to study in your room. Instead of evicting both guys, you only kick out the guy who owns the expensive speaker set, which eliminates the noise problem. On top of that, you still have one guy paying rent which saves you from having to fork up the entire rental cost yourself.
• Business: An example is a Management Buyout (MBO), like when Michael Dell (founder of Dell) paid $25 billion in 2013 for a piece of the company he originally founded, taking it private in order to exert more control over the strategic direction of the company. At the time, Dell became the largest company by revenue to transition from public to private. This is often considered the nastiest tech buyout ever. When introducing himself following the buyout, Michael Dell said “It’s great to be here and not have to introduce Carl Icahn to you. Now the only investor conversation I need to have is with myself.”
• Political: Politicians do this all the time through narrowing someone’s base of support. For example, during the Democratic and Republican primaries all of the candidates will attack the frontrunner during each debate. You can replicate this in many corporate settings.
• Psychological: This is done through alienating someone from a group by using tactics including misrepresentation and disparagement. It could be a completely unverifiable piece of news bringing down a company’s stock price, or one political candidate funding large-scale robocalls spreading rumors about another candidate. The media plays a large role in this once you get to the higher echelons of business and politics. If you are interested in understanding more about how the world of media operates, we recommend the book Trust Me, I’m Lying.

By taking action and eliminating the primary deterrent to your goals, you will have in many instances completely solved your problem. Without direction from a neutralized shepherd, the sheep will scatter.

Axiom #5 – Never Forget That You Will DIE One Day.

See the photo above?

Every single person in that photo is already dead. A proportion died fighting in the trenches of the Western Front during World War I. The remainder who escaped becoming a casualty of the war still died eventually.

The global average human lifespan is 72.6 years. There is quite a bit of inequality between countries. The life expectancy in Iceland (82.3) is more than 20 years longer than that of Zimbabwe (60.7). There is also a gap between male and female life expectancies. In the majority of developed countries, the average life expectancy at birth is 3-5 years higher for women than men. This gap gets larger once you get lower down the list. For instance, the life expectancy at birth for women in Lesotho (60.7) is 20 years higher than for men (40.7).

Regardless of these variations, however, one thing is clear: Our lives will all come to an end at some point either through natural means or otherwise. This means that time is our most valuable commodity. We can think of time through the concept of spending. Let’s assume you live for 72.6 years, the global average lifespan. That comes up to approximately 26.5K days. In order to stay alive, you need to spend $1 every day. This is kind of just like spending money from your bank savings, except here you are Spending Time. You can be very creative when it comes to money; by spending money or investing your money into debt or equity, you can position yourself to earn even more money and grow your bank account balance. But time works different. You have a finite amount of time that only goes down as you pay your rent to be alive every day.

You owe it to yourself to maximize the meaningfulness and fulfillment you get out of the time that makes up your total lifespan. No one cares how you choose to live your life. If you go about it wasting precious time in your twenties on worthless pursuits like watching TV, getting drunk, working a dead-end job, or doing drugs, only you will pay the price. But if you are on this website, your objective is probably to do more than just these. Maybe you want to build your own business empire, become a top-tier investor, develop peak athleticism, learn a new language, grow your confidence so that you can attract people towards you, go on adventures across many countries, etc. Perhaps you want to do multiple or even all of these things. Whatever it is that you are aspiring for, it’s certainly an objective that requires substantial time and effort.

You have a certain number of days, weeks, months, and years left before you die. Once you are dead, you are gone forever and ever and ever. Take a moment and let that thought sink in. If you want to be able to reach the objectives you have set out for yourself, you need to start valuing your finite amount of time. Instead of spending your Saturday mornings in bed watching YouTube clips until 11 am, get out of bed at 5 am to work on your online business. Instead of lying down on your couch to take a short break in the middle of the day, do ten pushups. Instead of spending your Friday evenings drinking a six pack and watching Major League Baseball, go outside and dribble a basketball for 2 hours. Never stray down the path of laziness and immediate gratification. Do what you need to do so you can ascend to heights that others fail to ever reach, and always remember that you are going to die.

Axioms for Life Progression

Axiom #1 – Willpower Can Be Developed From Scratch.

Willpower refers to our ability to refuse short-term temptations in order to achieve long-term goals, or in other words, our ability to delay gratification. Willpower is the key ingredient behind the majority of success stories. It is what enables us to build new habits and what keeps us in the right direction no matter how steep the road ahead or challenging the obstacles. It is what assists us to turn down distractions, resist temptations and build a life of achievement and lasting positive change. 

Willpower is a muscle you can train. Like every other muscle, this means: 1) In order to strengthen it, you must exercise it so that it becomes stronger, and 2) You must recognize when you are overworked so that you can give it time to recover. Putting this into the context of self-improvement means exercising your willpower frequently but recognizing the need for downtime so that your willpower muscle can recuperate. 

Let’s start by addressing how to train the willpower muscle. A great way to go forward is by exercising every day (see Physical Transformation Axiom #2). Millions of people will go to bed tonight promising themselves that from tomorrow onwards they will start exercising every single day. With great intentions, they will buy athletic wear and gym memberships, commit for a handful of weeks, and then quit. After some time, they will repeat this cycle again. Over the course of a year, they will have repeated this cycle a handful of times but made no lasting progress. In 100% of these cases, the absence of self-discipline is to blame. Consistent dedication towards exercise is the most fundamental developer of willpower, which makes physical activity and sports a great way for training both your muscular system as well as your willpower muscle. 

The key, however, is to take advantage of timing. Always do your best to work out in the early morning (4 to 6 am is the most ideal time to begin a workout). Your first and hardest test of willpower is to get straight out of bed within one minute after waking up. Doing this successfully is the key determinant in a good workout and productive day. It is also the first step towards developing your self-discipline. If you can wake up before 6 am every morning for ten days in a row, your willpower muscle will definitely grow. After keeping this up for around twenty consecutive days, it will seem noticeably more effortless when you force yourself out of bed. This is a sign that your willpower muscle has expanded. Keep this up for 100 days and the entire process of getting out of bed early will become a habit, meaning it will feel completely effortless. Yes, your willpower muscle has indeed expanded once again. 

The same applies to the workout itself. Go hard but ensure that your form is right every single time. It is not worth getting injured! The interesting thing is that once you begin a workout you will realize that doing a deadlift with a heavy barbell actually feels much easier than the initial task of trying to get out of bed. After the workout your body will feel sore but your mind will be completely fresh. Grab a quick breakfast and then take advantage of the next three to five hours before noon to get a lot of problem-solving tasks done (these should usually also be your most important tasks). If you are already working this can be negotiating your most important deals or completing key parts of your current project. If you are a student this can be studying for your upcoming exams or working on your coding assignment. 

You see what we have done already? We have exercised your willpower through strategically using our time. Up until lunchtime, you have completed different tasks in a descending order of difficulty. The most difficult task of the day was that initial push to get right out of bed after waking up. By forcing yourself to get out of bed immediately when it’s still dark outside, you have reduced your level of mental resistance towards going to the gym. After a two-hour workout, your body is tired while your mental capacity is still full. As a result, there will be no internal resistance within you when you sit down to work as your brain will recognize this time as critically needed recovery time for your body. By the time you get to lunch, you have already accomplished the most difficult tasks you had intended to do, and as a result it will feel much easier to get even more work done in the afternoon. Again, by repeating this over and over your willpower muscle will expand until it eventually becomes routine. 

The other point is recognizing when you are overworked so that you can give your willpower muscles some recovery time. By overworked, we do not mean feeling tired. To reiterate a previous point, scientific studies have proven over and over again that when people start to feel noticeably tired they have only actually used up 30% of their mental capabilities. Your objective should be to blow past that initial 30% mark and keep going until you hit the 85-90% mark. How do we track this? Simple. Instead of using tiredness as an indicator of when to stop, measure through your productivity or efficiency. For example, in the first hour of studying for a math exam you might be able to solve ten problems with 100% accuracy. In hour two this is still ten problems but your accuracy drops to 90%. In hour three this drops to eight problems at 75% accuracy. After three hours, you study for another 30 minutes, but when reviewing your work you realize that you have only completed two problems at 50% accuracy. This is a sign that it’s time to stop and give your mental faculties a break.

It is very hard to sit down and work for three hours straight and not feel fatigued. In the above example, you probably already felt tired after the one hour mark, but you kept going for much longer while maintaining a high level of efficiency. In the process, you exercised your willpower muscles and made them a bit stronger. The indicator to stop came when you realized that your productivity had more than halved. This is an important note to remember: It is time to give your willpower muscles some rest when your efficiency drops by more than 50% of what it was initially. Take a 30 minute break by going for a walk or meditating before you resume another large block of work. 

To summarize: Willpower is a muscle that you can train which gets stronger through frequent use. Some negative habits can be very difficult to break, but you are not forever bound to them. By taking advantage of timing when allocating your tasks, you can maximize your existing level of self-discipline through minimizing the amount of internal psychological resistance within you. By exercising your willpower consistently day after day and week after week, you will build up your willpower muscle which will eventually make decisions requiring self-discipline become natural habits that you no longer need to think consciously about. Finally, willpower can be temporarily exhausted when you realize substantially diminishing returns in productivity. If the efficiency of your production drops by more than half of what it was initially, take at least a half hour break so that you can replenish your willpower and operate at close to 100% again. 

Axiom #2 – Every Single Decision You Make Compounds. Take Advantage of the Compound Effect.

The small, unattractive, but smart decisions made consistently every single day that are aligned to your grand objectives will lead to tremendous and astronomical results. This is known as the Compound Effect and can be applied to any area of life. But while the upside is unlimited (there is no cap on positive growth), the downside is much easier to reach (we are after all much closer to zero than we are to infinity). As a result, compared to the positive outcomes, the negative effects of compounding tend to be far quicker to materialize through the buildup of just a handful of bad mistakes.

This works exactly like an exponential function where x measures time and y measures production (replace with progress, money, skill level, etc.). For example, let’s look at what will happen if you improve yourself by 1% every single day. At the end of Day 10, you would have improved by 10.4%, which is only marginally bigger than the aggregate total of adding 1% each day for ten days. At the end of Day 20 this compounding gives us 22%. Still not much, you might think. However, by maintaining the consistency of 1% improvement each day (nothing more and nothing less), you will have improved by 64% on Day 50 and by a staggering 170% on Day 100. By Day 200 you would have improved by 632% and at the end of one year by 3678% . Yes, you read that correctly. By improving just 1% each day for one year, you will generate ~37 times returns over your initial value.

The reverse is also true. If you decline by 1% every single day for an entire year, you will drop to nearly zero (0.99^365 = 0.03). However, just like you will never reach infinity no matter how much positive growth, you will never ever get to a point where your point of decline touches the x-axis (no matter how small it will always be above zero). For obvious reasons, you should avoid playing this game of compounding decline. Unlike compounding growth, it can be a much easier game to play as it involves very little work; you just need to maintain consistency in laziness and inaction. Of course, everyone has some bottom line which they are unwilling to drop beyond. This applies to even the laziest and most undisciplined people. If you keeping gaining one pound a day you will eventually get to a point where this makes you feel extremely uncomfortable and compels you to get on a treadmill.

Of course, improving by 1% every day for one whole year is not very realistic if that 1% is based on the combined aggregate total of every single skillset and capability you already possess. As mentioned in Physical Transformation Axiom #1, improvement is not linear and is anything but consistent. You might grow by 5% on Day 1, fall by 2% on Day 2, fall by another 2% on Day 3, and grow again on Day 4 by 15%. These ebbs and flows are completely normal and necessary, so it is important not to get discouraged. The point we are making is that in order to enjoy the compound effect and to reap huge, life-changing rewards from it, you must be consistent in bringing out effort and applying good judgment. The point is that by doing the right things over and over again, you are exposing yourself to a combination of the following: Many small gains that you will not necessarily notice individually, occasional minor losses that might annoy you, moderate losses that might scare you but will teach you new things, and finally, gigantic gains that may only come once a year or two but will completely shift your existing capabilities to a whole other level.

There’s a video on YouTube of Kobe Bryant giving some advice on building a strong and consistent work ethic. He does not specifically touch upon the Compound Effect but does prove the point of this axiom. In the video, he offers examples of the training routines of two different professional basketball players. Player 1 wakes up at 10 am every day, has breakfast, gets ready, and then trains from 12 to 2 pm. He needs to give his body some time to recover afterwards so he rests and heads back out onto the court again from 6 to 8 pm. He goes home, has dinner, goes to bed, and repeats the same schedule the following day. On the other hand, Player 2 wakes up at 3 am every morning and starts training an hour later at 4 am. He finishes at 6 am, comes home to eat breakfast and relax. He’s back out on the court from 9 to 11 am and then has lunch and rests for a few hours. He’s back at it again from 2 to 4 pm and again from 7 to 9 pm. He repeats again the next day. Player 2 can do twice the number of workouts as Player 1 (4 vs. 2) just by waking up early and doing this consistently day after day. As the weeks, months, and years go on, the separation that Player 2 has with Player 1 and his other peers grows larger and larger. By Year 5 or 6 the gap is so large that no matter how hard Player 1 works he can never possibly catch up. This is exactly the Compound Effect in action. 

The power of compounding is greatest in life when used effectively to grow your money. By understanding and utilizing the power of compounding in your investing practices, you are making your money work for you. The critical part of the equation here is time. Investing at an early age gives you far greater capacity to take risks and opportunities to recoup losses. Even a small head-start can have a tremendous impact over time. As an example, let’s assume for a minute that you are 25 years old and your best friend is 30. Both of you decide to begin investing at the same time for retirement at 60. You both start with a principal of $10K and invest $1K per month. For simplicity, let’s set the return at a fixed 10% per annum. Assuming perfect adherence to the above, your friend’s investment value at age 60 will be $2.46MM. However, your investment value at age 60 will be $4.12MM. Keeping all other variables constant, investing five years earlier has yielded 67% greater returns for you at the same age compared to your friend. 

But when it comes to compounding, investing early is only part of the game. As demonstrated above, investments need time to grow so it is crucial to be consistent and invest for the long-term. Disregard any and all short-term forecasts as they will not individually contribute to the potential long-term gains that can be generated through compounding. Rather, paying too much attention to it will only lead to panic and make it much harder for you to keep your emotions in check. DO NOT sell any of your investment holdings because of any irrational fear generated by market fluctuations. As the great Benjamin Graham once said, “The investor’s chief problem—and his worst enemy—is likely to be himself. In the end, how your investments behave is much less important than how you behave.” 

The Compound Effect can be greatly enhanced if you are able to strategically leverage market corrections. By this we mean holding off when others are frantically buying and frantically buying when others are holding off. The greater the price you pay for an asset, the greater the risk you will suffer from a markdown in capital. But when the price drops the risk drops too, meaning that in many instances a substantial drop in the price of a stock that you own may actually be a golden opportunity to buy more of that stock. The most incredible purchasing opportunities come along during a bear market, and assets during this time are often mispriced to a degree which represents a substantial bargain. By getting your hands on a large quantity of stocks or other assets at a time when other people’s irrational fears are driving them away, you will be positioning yourself to experience far greater returns over the long-run through a further enhanced Compound Effect. 

Axiom #3 – Human Nature Will Never Change. Take Advantage of This Fact and Learn to Predict Actions.

“In any future great national trial, compared with the men of this, we shall have as weak and as strong, as silly and as wise, as bad and as good. Let us therefore study the incidents of this, as philosophy to learn wisdom from.”
                                -Abraham Lincoln

Despite thousands of years of technical change, social trends, political developments, wars, famines, natural disasters, and so on and so forth, the fundamental core of human behavior has remained constant. To this day, people are still heavily influenced by the same tendencies and behaviors that have always existed within the Homo genus. Of course, it is true that our cultural norms have advanced greatly over millennia and this has played a role in programming some of our abilities and reactions to various degrees. For example, when spooked by an unexpected sound, we are no longer predisposed to run towards the nearest tree. In fact, we are no longer even capable of climbing trees in the same way our human ancestors could two million years back.

With that said, the vast majority of people today continue to possess the same emotional and behavioral flaws that have been a constant feature across many thousands of years and civilization after civilization. Only a small minority will ever willingly acknowledge these flaws (publicly or privately), and an even smaller percentage will take action to fix them (we put the number at around 1%). By having a good enough understanding of the human nature and its emotional tendencies, we can reliably predict the actions of almost everyone we encounter. By successfully predicting actions the majority of the time, we can make good decisions and build strong connections that will generate huge profits in the long run. 

With that said, let’s go over the *constant* features of human nature that will never change, as well as how to take advantage of them:

Resistance Towards Taking Action: 99% of people lack the ability to make and undertake good decisions in the long-term. They require somebody else to occupy the seat of an authority figure and assign work for them to do. This is why virtually every person wants to earn a high salary by working as an employee. They think that the opportunities that are actively provided to them are the only ones that they will ever receive. For them, there is no such possibility as creating their own opportunities in life. Such an idea comes across as not just outrageous but borderline delusional.

You can take advantage of this by establishing yourself as the authority figure. If you are currently making good money and have strong established relationships within a particular industry, spend a weekend to do some math and appraise the option of setting up on your own. We bet that 95% of the time the potential profit stream of starting your own business will exceed what your cushy job can pay you many times over. Yes, there is some risk involved, but it’s the illusion of risk that works in your favor and acts as a barrier to keep everybody else from doing the exact same thing and crowding up the market. Quit your job, start your business, and hire some employees to take over as much of the work as possible. Since you already know that the overwhelming majority do not have the capacity to take action and work for themselves, you can pay them below market rate but treat them extremely well. This will keep them glued within their comfort zone.

The Never-Ending Quest For Shortcuts: Our brains are conditioned to conserve energy whenever possible. This has been the case for at least many tens of thousands of years. In order to fill their bellies, our cavemen ancestors had to chase antelopes for weeks at a time with no guarantee of catching it. Even as recently as 100 years ago putting sufficient food on the table was no guarantee: People needed to toil away long hours under dangerous conditions in a factory just to survive. So for almost all of our history we have lived in a state of almost constant energy depletion, and this has programmed our brains to give us frequent reminders to conserve our strength at every possible moment. These reminders come in the form of looking for shortcuts. With technological advancements and increased automation, the average person will become more and more lazy and the tendency among people to resort to shortcuts will only increase further.

Of course, we want to clarify that there are many instances when shortcuts are not only appropriate but absolutely essential in the interest of saving time and cutting down redundant work. If you are walking home and have the option of cutting your 20-minute walk in half by crossing through a park, definitely do it. This is a no-brainer. The problem arises when you look for shortcuts as a solution to fulfilling strong ambitions or as a quick-fix remedy for problems that are serious in nature. 

For instance, everybody wants to get rich. Not only that, but they also want to get there in a short span of time. But being rich is relative; your net worth needs to be higher than 98-99% of the population. To do that, you need to be either working harder and/or thinking smarter than practically everybody else, and very few people are willing to put in the amount of commitment required to outperform at this level. This is why so many people fall for Get Rich Quick schemes. A large chunk of the population will always be on the look-out to find ways to not have to work, and will fall for the illusion of being able to attain wealth quickly over and over again. 

There are plenty of ways to legally profit off of people’s tendency to take shortcuts. If you are able to raise the necessary capital and secure registration, open a casino. People will always be drawn to gambling because they see it as a fun, adrenaline-producing method of securing easy money fast. However, if there’s one certainty in gambling it’s that nothing is ever left to chance: The house always wins. The very business model for casinos consists of built-in advantages that ensure strong profitability and a never-ending recurring flow of customers. 

The next best thing are lucky draws and sweepstakes. People are highly emotional creatures, and the moment they are presented with the opportunity to win a G-Wagon by making a $150 bet, all rationality flies straight out the window.

Denial of Mistakes: Most people have incredibly fragile egos. They will go to great lengths to argue that they are in the right even when there is a plethora of evidence pointing to the contrary. Their mindset is that by publicly doubling down in a less than ideal situation, they can overcome and even triumph over the consequences that might arise from their prior shortcomings and misjudgments. Instead of sitting down and reflecting on how they could avoid a repeat of the same mistakes, they will reverse-rationalize their past decision-making. Some people will even go so far as to escape culpability by completely altering facts or convincing themselves of alternate realities in their own minds.

This is how the human brain functions, and rather than wasting time arguing with other people by pointing out their mistakes, come in and stroke their ego when the timing is right. If you are at work and one of your colleagues that you hardly ever talk to is on the receiving end of some kind of criticism because he lost a deal, go up to him and ask him for help on something he is good at. Use the following phrase: “You are the only one with the knowledge and experience to help me.” Even if you don’t actually need any help, do this anyway whenever the opportunity arises. By publicly reaffirming your confidence in your colleague at a time when he is receiving contradictory feedback from others, you will have created a new supporter. From now on he will be the first to sing your praises.

Driven By a Fear of Loss: This is a key component of behavioral economics theory that we have seen in practice time after time. On average, the pain of losing something is twice as great as the gratification derived from gaining that very same item or benefit. Individuals are far more likely to take on risks or conduct themselves in a morally questionable manner to avert a loss than to receive a gain. There is even a special name for this in financial investing— Deprival Super-Reaction Tendency. This is where investors irrationally evade risk when they encounter an opportunity for gain, but carelessly chase risk when there is a strong likelihood of loss. 

For this reason, it is usually far more effective to apply a penalty frame over a reward frame when motivating people. For instance, it is now very common to pay a small fee per plastic bag in grocery stores and supermarkets across many countries, but this wasn’t always the case. When environmentally friendly initiatives like these were first rolled out, the initial policy was to reward people with a small fee for bringing their own reusable grocery bags. However, it was soon proven that being charged an additional amount was far more effective in reducing the use of plastic bags. There is a similar policy in European countries like Germany or Denmark where bottled beer and drinks are priced 15-20% higher than the standard market price. By bringing these bottles back to the grocery stores and returning them into these special machines you can have the 15-20% premium returned to you in cash. 

Axiom #4 – DO NOT Succumb to FOMO. Instead, Leverage It To Make Good Decisions.

FOMO is the fear of missing out. This refers to the perception (accurate or not) that others are having a better time, living a better lifestyle, accessing better opportunities, or receiving better rewards without you. The basis of FOMO comes from feelings of envy, which has roots dating back to the earliest stages of our evolutionary history. For many thousands of years, envy has been a key driver pushing people in their fight for the necessary resources needed to survive and reproduce.

Over time our priorities have shifted away from satisfying basic needs and increasingly towards chasing material gain and enjoyment. This has had the effect of exacerbating feelings of envy across the board. We want what we don’t have, and when we see someone possessing or enjoying something that is beyond our immediate reach we inevitably begin to wonder why that is so. The popularization and adoption of social media has further accelerated the FOMO phenomenon: Ordinary people who lack ambition and work ethic are now constantly comparing their own subpar lives to the edited highlights of other peoples’ lives.

It is important to avoid FOMO for obvious reasons. First of all, FOMO generates strong impulses that make people lose track of their long-term goals and resort to quick-fixes that will bring them instant gratification. Just think about it. Let’s say you are 23 years old and just starting out your career. Your goal is to build an online business on the side that can generate up to $100K in annual net profit within two years, and on top of that you also want to work out every single day to build a killer physique. There’s just one problem. You are following your friends’ stories on Instagram and constantly see them partying, drinking, going on vacation in Cancun, etc. You do not want to miss out on the fun so you end up joining them whenever they invite you. Instead of working out at the gym, you spend your weeknights after work drinking beers and watching sports. You spend weekends hungover and partying at clubs when you should be building your business. This goes on week after week and after two years you have no money or physique to show for it. 

But there is an even greater danger: FOMO is the catalyst for many horrible money-losing investment decisions. 99% of people transform into a reckless bundle of nerves the moment they hear others bragging about how they tripled their returns on a certain tech stock or made 30x returns from buying into Bitcoin early. They want in on the action too, so they buy in. The first problem, however, is that they have already missed out on the prior phase of phenomenal growth and buying in now will not fix that. The second problem is that their decision to purchase is driven by emotional urges rather than through careful analysis. By purchasing an asset after it has already experienced such phenomenal growth, they are taking on a far greater risk of experiencing a loss in capital.

It is exactly this kind of contagious greed within individual investors and their tendency to jump into get-rich-quick schemes that drive them into the lethal grip of a stock market bubble. This begins when any group of stocks (i.e. Internet stocks in the late 1990s) experiences substantial growth. The upsurge emboldens more people to get in on the action and buy these stocks, which leads to more media coverage, which leads to further buying, which results in huge profits for the early adopters of Internet stocks. These successful early investors will receive a lot of media coverage and tell others about how easy it is to make big $$$, which will lead to stocks rising even further in value. This is when the bulk of greedy and clueless investors jump in. They see others making “easy money” and are kicking themselves for missing out, so they jump in at a time when Internet stocks are already grossly overvalued and sentiment has neared the peak. This whole process is unsustainable as it requires more and more unsophisticated investors at each stage to come in and buy the stock from the earlier group of investors. Eventually, the pool of idiots dries up and the bubble bursts. 

This is what happened when the Internet Bubble burst in the early 2000s. Amazon went from a high of $75.25 in 2000 to a low of $5.51 within a year, a 92.7% decline. Yahoo.com fell from a high of $238.00 to a low of $8.02 in 2001-02, a 96.6% drop. Nortel Networks, which traded at $143.62 at its high in 2000, dropped to a low of $1.80 during this time, a 98.9% decline. The FOMO investors who bought at or near the peak between Q4 of 99’ to Q3 of 00’ had over 90% of their value completely shaved off.

Hopefully by now the message is clear— FOMO is a dangerous state of mind so you should never let it become the sole determinant behind any decision you make. However, there are instances when FOMO can be used purposefully, such as when the result does not involve instant gratification. If you are feeling lazy and don’t want to work out, some degree of worry about not being selected in soccer team tryouts could be good in getting you out of bed consistently every morning to go for a jog. The fear of failing your job interview at a top hedge fund the coming Monday could have a positive impact on your decision-making; you decide to spend Saturday evening staying home to prepare instead of getting piss drunk with your friends.

Huge benefits come with being able to control your FOMO urges. Within financial investing, the investors who consistently make a lot of money are the ones who are capable of doing their own work and thinking like a contrarian. Instead of getting caught up in the stocks that get a lot of positive coverage, they spend their energy looking for bargains by examining areas that other people are ignoring. They also have a lot of patience and courage. They keep a lot of cash on hand, then wait meekly while others pour their cash into overpriced assets. Eventually, some bubble will burst or some crisis will hit, and it is at this point when the market is depressed that these patient investors will jump in and take advantage of some of the greatest purchasing opportunities while others panic about the plummeting value of their investment portfolios. As the great Warren Buffett once said, “The stock market is designed to transfer money from the active to the patient.”

Axiom #5 – Luck = Preparation + Attitude + Opportunity + Action

Most people believe that luck is completely random and beyond their control. They look at others and wonder why some people are able to have things magically work out for them every time. They then look at themselves and become frustrated because they feel that nothing they want ever seems to go their way. They tend to significantly overestimate the role of luck in other people’s accomplishments while undervaluing or even completely ignoring the effort they devote each day towards creating that luck.

Yes, you read that right. Luck does not just pop out of thin air, it is created. The achievements and positive outcomes that often appear to come by pure chance are simply the end result of a sequence of ideas, investments and actions that were planned and executed to create that luck in the first place. So yes, some people do have more luck than everybody else, not because they were born luckier, but because they created it themselves.

Luck is a combination of four variables: Preparation, attitude, opportunity, and action. Preparation refers to the groundwork involved in mastering different skillsets and knowledge areas. People who efficiently invest time over weeks, months, and years into learning a skill, discipline, or knowledge area will reach a point where they understand everything better than 95% of all their potential competitors. They will be in a much better position to spot good opportunities that everyone else ignores or overlooks due to a lack of knowledge. For example, if you are a trader who understands a particular market very well and keeps track of the relevant information sources, you will be able to react to new information at a fast pace while the market is still digesting it. 

Attitude refers to how you respond to different outcomes, particularly the negative ones. Rather than give up, lucky people persevere through failure and the hard times. As spelled out by an old Japanese proverb, great luck and success comes to those people who “fall seven times and stand up eight.” On many occasions, attitude can play an outsized role in the luck equation. Some of the luckiest people in the world are neither smart nor prepared, but still succeed over everybody else because they stay with their problems longer.

Lucky people have the capability of transforming failure into achievement. They recognize that failures do not necessarily equate to mistakes or errors of judgment. In many instances, it may be the best outcome you could achieve given the available resources. Instead of sulking, they think to themselves, “What can I take from this?” It is this kind of persevering attitude that fuels select individuals to go home, add improvements and make adjustments, and then try again. It is on their second, third, tenth, or hundredth time that they stumble upon the so-called “luck” factor.

Opportunity involves presenting yourself as much as possible within situations where lucky outcomes can arise. Human interaction is a key component of this. If you are at home all the time playing video games or watching Netflix, you will probably not come across very much luck. Likewise, if you spend 95% of your time stuck at home doing preparation and 5% of your time exposing yourself to opportunities, you will not get to utilize your preparation very much. Let’s say you are a sophomore in college who wants to break into investment banking. It will not matter how well you understand DCF or LBO analysis if you cannot secure a first-round interview. It is equally (if not more) important that you attend as many networking or alumni events as you can and build relationships with recruiters and alumni who can endorse your CV. Similarly, if you are the 13th to 15th man on an NBA bench, you cannot expect your amount of preparation to directly translate into increased playing time and exposure. You will need to take advantage of every single second of playing time that you get to put up stats and make an in-game impact (i.e. Linsanity).

The final variable is action. This is typically the most uncomfortable part of the equation. Taking action is hard because whenever it is meant for attaining a meaningful outcome the perceived risks are high and fear gets in the way. Other times the perceived risk may be low but the immediate sacrifices required as well as the general laziness of most people prevents any idea from ever moving beyond the drawing board. There are a never-ending number of excuses, from not knowing where to start or having fewer resources than others to being too overwhelmed with existing obligations.

Action and opportunity go hand in hand: By taking action again and again, you will eventually come across rare opportunities. Similarly, a lack of opportunity is more often than not the result of inaction. Going back to the basketball example, if you are a fringe player on the end of the bench in a bad NBA team, you are far more likely to get the opportunity to play meaningful minutes if you go out of your way to connect with the coaching staff. This is essentially the difference between the successful and the unsuccessful imports: Yao Ming was very outgoing and had the ability to connect with everyone in the Houston Rockets organization, which was how he was able to function as the focal point of the team until he eventually retired due to injuries. Yi Jianlian, another lottery-pick big man from China, was a mid-level role player who eventually fell out of favor into his fifth season. Despite being super athletic with excellent size, he was extremely introverted and never spoke to anyone unless they engaged him first. 

To conclude, the opportunity to create your own luck is fully within your control. By focusing on the four variables (preparation, attitude, opportunity, action), you can directly influence how much you will benefit from luck in your life. Stop wasting time sulking about others who are lucky and always get their way, and start making your own luck today.

Conclusion – Get To Work

In summary, if you can build up the willpower and desire, then there is virtually no competition to make it into the top 1%. All you have to do is follow the above axioms. If you can do so consistently you will reach a point where a lot of these become habits that are securely entrenched within you. Keep going and don’t stop. You will notice substantial gains after six months, a year, two years, five years, and it will be impossible for you to not become a multimillionaire with an impressive physique. At that point the question will no longer be whether or not you can make it into the 1%. Instead, the focus now will be how far you can go beyond the 1%. This is where the real competition begins: You have defeated the faceless majority and will now be competing purely against the elite class of competitors. Get to work!

© Ironman Diaries LLC 2022