The Real Reason You’re Broke


So what’s the real reason most people are broke in the world? It’s a controversial subject. Right now I’m reading “50 Success Classics” which has great quotes from people throughout history.

Most of us operate under what I call “pain-avoidance delusion” – it’s one of the 25 cognitive biases, and nothing brings out delusion more than money.

I was talking to somebody who was broke the other day and she said, “It’s not my fault.” And there’s a little bit of truth to that, some of the problems in the world come from government and taxes. I was listening to the President’s State of the Union address recently and he has some noble goals.

I’m not completely knocking the place of government but I want to put it into perspective by reading you this quote by Benjamin Franklin.

Many years ago in the 1700’s someone came to him and said “The taxes are too high, I’m not making any money.”

Benjamin Franklin replied: “The taxes are indeed very heavy, and, if those laid on by the government were the only ones we had to pay, we might more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly; and from these taxes the commissioners cannot ease or deliver us, by allowing an abatement.”

Franklin was a man who not only got over the pain avoiding delusion, but also mastered the mis-weighting bias. Most of us mis-prioritize those things that are actually holding us back in life.

The main thing holding back the world is not government taxes. I’m reading Gregory Mankiw’s book “Principles of Economics” and taxes definitely matter, they cause shifts in supply and demand.

But you know what will have the biggest bang for the buck? Optimized brains in the billions of people across the world.

What stops us from having an optimized brain?

Franklin says we are taxed twice by our idleness. Our own laziness holds us back.

He says we’re taxed three times as much by our pride.

We’re taxed more by the latent and unused human potential in our own brain than we are by any government organization.

Lastly, Franklin says we’re taxed four times for our folly. What’s our folly? Making too many mistakes because we’re too lazy or proud to listen and realize that the answers aren’t always within.

I have a huge library of books because I use them to stop myself from making mistakes. Exercise for the brain is just as important as exercise for the body. My grandma is 96 and she’s very sharp. Part of that is good luck and good genes, but she’s also been stimulating her brain with chess and backgammon for years.

These are the things that you must work on first. In “The 7 Habits of Highly Effective People” author Stephen Covey says to focus on the things in your control. Some of you might become politicians and change government for the better but those of us who aren’t in the political realm can’t really control these things.

So don’t be lazy. Don’t be proud. Avoid making mistakes. These are the things that will bring you poverty, but if you invert them, they will bring you immense wealth.

What’s an example of an area where you have been too idle, too proud, or had too much folly?

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What’s Better; Kindle Or Real Books?


People ask me all the time what’s the best way to read books – electronic or hardcopy? First of all, don’t be so black and white with your thinking.

There is no right or wrong answer to that, it’s not a moral question so you don’t need to treat it so literally.

Each has its advantages. For me, I only use electronic books for two reasons: when I’m traveling and I don’t want to take too many books with me, and to take notes (sometimes it’s easier to take notes in an eBook).

I still bring some hardcopy books with me though. I figure if Alexander the Great could bring a library with him on all his war campaigns then I can check a bag of books.

EBooks are hard on your eyes in my opinion. People argue with me and say that modern technology is easier on your eyes but I feel like I look at a screen too much anyway, and it’s nice to have something visceral to hold in your hands.

The other time that I use eBooks is on my phone, because if you’re in a waiting room or on a subway you have something to read right there in your pocket. I read the same books over and over, kind of like a form of meditation. For example, I have “Civilization and Its Discontents” by Freud on my phone. I already know what pages I like so I can just pull it up and think about his ideas.

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Take This “Am I Crazy?” Test and Try It On Your Friends


I was just reading this great textbook “Individual Differences and Personality” by Michael C. Ashton. I always recommend reading textbooks because they have a lot of the world’s best knowledge all in one place. The American Psychological Association groups people with mental disorders into 3 clusters:

Cluster A – Odd and Eccentric
Cluster B – Dramatic, Emotional, and Erratic
Cluster C – Anxious and Fearful

You might not have any major disorders but if you think about this in a less literal sense most of us can cluster together parts of our behavior these groups.

The reason that I like looking at disorders like these is because they reveal areas of imbalance in our lives. The book talks about how some of these traits have persisted through our genes because they have been successful in promoting reproduction and survival.

The odd/eccentric side of us serves a purpose; it helps us think outside the box. As long as you don’t take it too far it can work to your advantage. Our dramatic, irrational, and emotional traits also exist for a reason. They give us empathy and encourage us to speak up when we’re not being treated right. Anxiety and fear can hold you back in life. But if we keep our anxious/fearful emotions in balance then they are functional. They’re what make us check both ways before we cross the street.

Remember to always study all sources. Don’t just read pop psychology, go straight to the real psychology right here. Stay balanced, and don’t let any of those clusters take too much control of your life.

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The Simple Formula For Success


What’s the best formula to accelerate your curve of progress? Double down on whatever works. Whenever I say that to people they tell me they already know that. But when you meet someone who really knows this they don’t have to tell you. You’ll be reading about them in magazines and books.

Egocentric people say that they love themselves just the way they are. People think they should be patted on the back for having high self-esteem.

You shouldn’t be patting yourself on the back for egocentricity, you should be patting yourself on the back for a job well done. You should be patting yourself on the back for attaining mastery.

The first part of the formula for success is to double, triple, quadruple down on what works. The second part of the formula is to crush what’s not working.

My first business was a cherry tomato stand that I opened when I was five years old. It didn’t take long for me to figure out that there isn’t much demand for cherry tomatoes. So I followed the second part of the formula and I just shut it down.

I tried selling lemonade next and tons of people bought it. But for some reason I never sold it again. What I should have done is continued to run my stand and recruited a friend to start a second stand.

I deal with the highest levels of business with the most successful people and even they forget this.

Michael Jordan won one basketball championship after another, and then he decided to play baseball.

That’s not doubling down.

That’s thinking you have unlimited life.

You don’t.

Jordan was lucky that he could turn it around, but I’m pretty sure that if he could go back he wouldn’t do it again.

A lot of us say, “But then he wouldn’t have learned the lessons he learned.”

I call BS on that.

You don’t have to stick your hand in a fire to know that it’s going to burn you.

We all have brains that can simulate the future. Get rid of the mentality that you need to make mistakes.

Double down on what works!

If you get your partner roses once a year and they’re elated: get them twice a year.

If that still works, get them four times a year!

Keep doubling it.

Now eventually you’ll reach a point of marginal reaction where they won’t want flowers every five minutes. There is a point, but the good news is that it’ll be obvious. Most of us quit long before the curve drops off anyway.

What’s an example of something you should have doubled down on and how can you double down on it starting today?

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