Make better decisions... live more satisfied.
Updated: Feb 18
A good life is the fruit of a succession of good decisions.
I was born with both an over-competitive and lazy nature. I have many more faults but these two have served me well.
While I am not proud of either and have long fought my urges to be less of both - I cannot help but look back and think how both flaws came to shape my mind in a way that turned out to be extremely advantageous.
Indeed, while my competitiveness pushed me to figure out how to win…. My laziness was always calculating the least amount of effort required to do so. In other words, and from an early age, I've been trying to figure out how to get my "biggest bang for my efforts."
Today - I’d like to share how these two flaws turned out to give me a large and unfair advantage - by training me to take better decisions. The good news is that if you’re neither lazy or over-competitive - this approach will only serve you better.
Finding the competitive edge
I used to love to play board games since an early age. After a few games, it was easy to figure out which strategy gave you the better results… all you had to do to was to stack up the odds in your favor and given enough rolls of the dice, you’d end up winning a lot more often than you’d lose.
For example, in order to win at Monopoly - all you had to do was “buy everything you can afford and sell nothing…” Unsurprisingly, not very different from the strategies of the most savvy real-estate investors (albeit with a lot more refinement).
My first computer games were low on graphics (Apple II) and high on strategy. I furthered my skills even more and always tried to hone in on what would give me a “competitive advantage”.
Board games and computer games were similar in the sense that they both had an “algorithm” that would dictate the rules to win.
I was lucky enough to have been tricked into believing I was good at math that I eventually became good at math…. And one of my early courses on probabilities turned out to be a real eye opener for me.
It taught me how to calculate the probability (the odds) of things happening and how to estimate as accurately as I could in the absence of data.
One of the lessons was of particular value…. Giving substance to my intuitive understanding of how to win at games was on the topic of why trying to win at casinos (or the lottery) is a futile exercise.
One of the examples he gave was something along these lines "If the house has only a 2.5% chance of winning at a game, if you play this game 100 times, then the highest probable outcome is that you will up with only $8.15".
Sure…. In the short-term luck or skill mattered but given enough rolls of the dice - all you had to do was stack the odds in your favour. And it became a relentless pursuit in every aspect of my life.
Using basic math as an edge in your life
A few years later I took a management course that gave me insight as to how to apply this thinking into pretty much every thing in my life. It was an early business course that argued that projects should be ranked according to their impact.
The rule is simple: you multiply the probability of something happening by the reward of the outcome - and you start by doing the ones that have the higher changes of paying out the most.
To illustrate this well, imagine that you are given a choice between two investments:
- Investment A - Has a 90% chance to give you a 20% return.
- Investment B - Has a 40% chance to give you a 50% return.
Which should you chose? In this case (all other things being equal) you chose chose B. Why?
- Investment A - 90% * 20% = 18% probable increase.
- Investment B - 40% * 50% = 20% probable increase.
It turns out this is a formula that Bernoulli invented a few hundred years ago about how we should make decisions in our personal lives as well.. and I have.
And basic probability and investment skills can be extremely useful skills when evaluating outcomes of certain decisions. I am not talking about pulling out an Excel spreadsheet type of math when deciding outcomes (most decisions can be taken with very basic math skills….).
True, there are important decisions that are better taken with a spreadsheet when their outcomes are complex to deduct… but even those don’t require very complex math skills - just a basic understanding of the principles at hand.
I can say that in my case, it has almost become an affliction. I have come to see the world and my life as a huge chess game with unlimited outcomes. I calculate the probabilities of each of branch and sub-branch of the potential outcomes….
More so, I constantly find myself constantly re-calculating the odds of the outcomes as variables change (events happen) - giving me a near real-time map of what lays ahead of me…
I have been blindsided many times and made erroneous outcomes based on erroneous inputs or understandings…. But I used those events as new rules to embed in my future logic - as further data points on which to further enhance my predictive models.
I take things to the extreme…. That’s who I am…. And that is not what I am trying to advocate.
What I am trying to suggest is that you should chose to apply this discipline to the important decision in your lives, such as: how to evaluate career path options, how to pick between investments, how to evaluate interest rates, whether to buy or lease, buy your house or sell it, etc…
Why? Because this is how you understand the rules of the game. This is how you understand how to win. This is how you understand which option will most likely give you a better outcome.
It will give you the tools so that you can stack up the odds enough so that you become the casino (not the player) and by the sheer prowess of mathematical magic - you will win more often that you lose. And that effect over time is huge.
I apply this religiously in my business. I often tell my employees that we don’t have to be smarter than our competitors… all we need to do is be able to test faster.
Our ability to test, increases our ability to arrive at good outcomes (even if only by chance…) and that increases our ability to outbid our competitors (unfortunately we have very smart and like-minded competitors so it makes life challenging).
So where does the laziness come in?
Laziness: the quality of being unwilling to work or use energy.
I was lazy but I realized early in life that the outcome of the absence of work was not good (a consequence of some kind…).
So my thinking quickly shifted not from “the absence of work” but trying to figure out what was the strictest minimum of time I could spend on any giving subject just to get by…
If my parents expectations were that I get A grades in math and science - then I worked the least I possibly could to do just that. If their tolerance for a C or a D was permissible in history or phys-ed - you could bet I would strive for that minimum as well.
Looking back - I spent more effort trying to figure out how much effort i could avoid then same effort to do said thing in the first place.
I recently attended a lecture where they described the concept of a fly-wheel. The concept was describing how crucial it is - in business - to understand what is the fly-wheel that makes it turn.
It gave the example of the old Amazon fly-wheel which explained their competitive advantage:
- Give consumers low prices on more items,
- Will result in more consumers shopping on Amazon,
- Attracting more 3rd-party sellers looking to sell their goods,
- Creating more competition (lower prices) on more goods,
- Reinforcing the spiral of giving lower prices on more items…. And so on…
This, I felt, captured well what I had been doing intuitively all of my life. Because if you want to work very little, you'd better understand very well what will give you the most amount of reward for the least amount of effort.
With time, I have become very industrious (believing in the virtue of hard work and the satisfaction derived from it) and my philosophy evolved to the following principle:
"Given my very limited means (time, money, people, whatever they are...) - how can I apply them to give me the best possible outcome in the surest of ways and in the shortest amount of time."
This brings other concepts that I'd be happy to expand on in other blog articles but for the moment being let's leave it at that.
The next big lesson I learnt a few years ago was a principle of the 4DX discipline by Covey - which said: go for the fewest battles that win the war.
In other words, there are many battles not worth fighting on your way to success. Given any individual or company's limited means - it becomes imperative to understand that all not battles are worth taking... let alone winning.
And that allows you to deploy your energies towards the battles worth fighting for. The few that will make the difference between success and failure. Recognizing them early takes a lot if discipline and effort... it comes with time and practice.
It comes at the cost of many failures... of many updated algorithms... until eventually it becomes effortless... like all things we practice often.
So what are the take-aways that I'd like to live you with...
I am not suggesting that financial success is at the core of happiness. Success can come in many different ways (raising well-adjusted kids, become the best sculptor in the world or putting aside enough savings to make you and your loved ones safe).
What I will argue (with many experts in the field having proven it) is that success of any kind brings a lot of satisfaction. And that surprisingly enough, we don't judge the happiness of our lives through the prism of the experiences we've lived but rather through the narrative we've constructed to answer the basic question: Am I happy with my life?
In the end, I believe that both happiness and satisfaction are worth striving for. And since we understand that the way to satisfaction is through success - then we ought to ask ourselves what are the conditions of success in any field we decide to invest in.
Once we understand the conditions for success, it gives us the framework we need to build our model and iterate and get better at evaluating outcomes in our lives. We can do so by experience (that can be very costly) or we can do so by learning from books, guides, videos and experts around us.
You should also use feedback that is given to you as a way to refine your model:
When a teacher gives you a C - it is meaningless as such. Understand what got you the C, how this teacher evaluates your work, take the time to figure out what his criteria for top performance is. That allows you to refine and put in the work around the areas that matter to him.
Same thing goes when taking a new job at a new company. Understand what the company expects of you, what its culture is and what it would take for you to outperform. Figuring these things out early ensure that you deliver value to your employer faster... and if you do that, they will quickly recognize it and soon enough - promote you.
These approaches greatly increase our chances at becoming successful at whatever field and further encourages our satisfaction derived from it.
Because we have maximized our chances at becoming successful, we are quickly encouraged by our own progress - until it too becomes a virtuous circle that feeds on itself fueling our passion.
Succeeding (dare I say excelling) in any field is really within the reach of anyone: understand the rules of the games, pick your battles, test/iterate fast and refine your models along the way.
Resources to making better decisions:
Importance of selective focus (on things that matter) and double-down on things that matter. https://www.youtube.com/watch?v=gkhtYs22bLI
How to improve the odds of reaching your goals: https://www.youtube.com/watch?v=xeJopg1jrM0
3 Ways to make better decision (thinking like a computer): https://www.youtube.com/watch?v=1mLQFm3wEfw
How to make better decisions (avoid some of the biases and traps of our brains): https://www.youtube.com/watch?v=2tCYy66CyuQ
How to make better decisions (12 tips to making better decisions): https://www.youtube.com/watch?v=C2Qb1UTTWXM
Note: I'll soon be adding a list of subjects and insightful ways on how to handle them from evaluating financial investments, buying your first home or making simple day-to-day decisions. Look for this in a future blog post. If you have any specific subjects you think would be of interest, let me know through the comments section.