In our post on how to obtain consistent happiness we tried to touch on “how to think”. This is a broad topic and we only hit on a few items in the previous iteration. Given our interest in expanding our posts we’re going to try and give our *ideas* on how to improve your thinking process. Namely, through the application of logic.
1) Before Doing Something Ask “Does This Make Sense?”
2) Quick Numbers For Business Calculations
3) Quick Numbers for Personal Finance Calculations
4) Logic Says Success is Relative
5) Application of Logic to Recognize *Our* Weaknesses
1) Before Doing Something Ask “Does This Make Sense?”
This will save you a lot of headache. A lot. Before you begin steering your ship in a new direction, ask yourself if the direction “makes sense”. Given our strong stance against the “manosphere” and against the “red pill” community we can use everything in the “sphere” to see how the vast majority of writers are losers.
Become a “Location Independent Businessman”! If your goal is to actually start a business, the worst possible move you can make is this: “pack your bags, move to a third world country, teach English and start a company”. This is the fastest way to realize that you’re talking to someone who doesn’t make a lot of money. The person did not have the necessary skills to earn a high income. How are we so “sure”. Easy… Does this make sense?
If you are legitimately capable of becoming an entrepreneur then you are going to have *options*. This means that you likely have *career* offers from top tier institutions and firms. So, run the math. If you can obtain an engineering slot at a top tier silicon valley firm you’re going to make $125-250K a year *out the gate*. If you were a top tier finance student and got an offer to work in investment banking, you’re going to make ~$150K *out the gate*.
No sane person is going to say “let me start a blog in a third world country with no experience and live off of $50K a year instead”. Again. It does not make sense.
Nail in coffin. If you’re truly brilliant and can start your own company without being trained at a top firm … You’re still *not* going to leave the USA. You’re going to do what all of the other big guys did. You start it in the States because that is where the network is. Facebook, Twitter, SnapChat, Uber, etc. etc. etc. are not in Cambodia for a reason. It is not because the founders are dumb.
In short: If you are talented and have options, there are too many opportunities in the states to cause a young 20 year old to pack his bags and leave for no good reason.
Girls Are Sluts but it is Hard to Get Laid: This is probably the funniest piece of the entire Complain-o-sphere. The claim is that women are not relationship material because they are sluts… Then… Claim that women are too hard to sleep with. Huh? This does not make any sense. How can you take advice from someone who has this type of logic?
Never in the history of mankind has “average” guy been able to obtain a “model” because he was simply a good man. This time never existed and never will.
It is either hard to get laid or it is not. Both cannot co-exist. We do not care which group you are in. If you’re having trouble, improve yourself and find more girls to talk to. If you’re doing well with women, the last thing you do is complain about them. If you’re not attracted to the girl or her personality turns you off, then move on. It is not a big deal.
In short: Which group are you in. We don’t care which one it is. Just don’t claim to be part of both of them.
Women Abroad are Soooo Different! No. No they are not. We’ve been to over 35 countries now and while there are always nuances with each group of women… There is no real “difference”. The only real difference is (gasp) your *relative value*.
Here is the basic learning curve. 1) Arrive, 2) realize you’re getting higher quality women, 3) calculate how much more money you make relative to the median, 4) *decrease or increase* your spending to your relative purchasing power in the states, 5) figure out it is roughly the same!!!
Most people don’t make the logical jump to points 4 and 5. They walk in with $2,500 a month and say “wow I am getting girls here that I couldn’t get back home with a $5,000 a month lifestyle!”.
Then reality hits.
You’re a bright guy so you find the median income. The median income is roughly $725/month in the city you’re in while the median income is $3,500/month in the city you live in. Your relative purchasing power is 4x in the foreign country and only 1.43x in your current city! Surprise, surprise! Your lifestyle was significantly better on a relative basis so you did better.
If you really want to prove this out, you can test run the thesis. You simply decrease your spending all the way down to the median. If you live in Manhattan try to live a fun and exciting lifestyle with your $70K gross salary (~$4,300 net) per month. Hint. It won’t be great. Then go to your third world country and spend the median income within that city… Hint. It won’t be great.
In Short: While there are always nuances based on personalities, the same thesis applies in foreign countries as they do in the states. The girls you attract will always be a reflection of your total value. This makes sense.
2) Quick Numbers For Business Calculations
With the high level examples out of the way lets move onto some quick math. This is apparently a lost art as some people really believe “big bloggers” make $500K a year… Again. No. They do not.
5% Convert: On launch day your conversion rate for any product, this is an eBook, real product from a real business or otherwise, is going to be significantly higher than any other day. Of course, holiday season and special days will also sell well, launch day is the real big one and should be ignored. Going forward run the 5% rule (yes we realize it will range between 3-7% we’re using 5 because this is quick math).
Take the total number of *recurring users* this means actual people. This does not mean page views, this does not mean sessions etc etc. Only people matter. Now here is the equation:
(Recurring Users) * (5%) * (Total dollar value of all products) = Income.
Roughly speaking, if you have 40,000 legitimate customers, 5% convert at $100 you’re looking at $200K.
Here’s the rub! This is likely an inflated number. Now that you have the rough number, work backward and it’s probably 75% of this as pure profit (taxes other expense etc.). So you’re looking at a rough number of $150K. Bracket this with 10% and you have a good idea of the actual income $135-165K.
Now that you have the rough math you can quickly figure out if someone is telling the truth or not regardless of claims.
In short: Learn basic internet math if you’re going to buy products off the internet. We do not care if you sell scammy products or real ones (it is your life). Just know the numbers so you can be aware of the world around you. Hint. If the person sells something recurring, that’s where the real money is.
***Pro-tip, if the product costs $47 or more. Price ends with the number 7. 99.999% of the time it is junk. People will buy and they will also buy the $1,997 special consult promo items as well***
3% Ad Convert: We used a somewhat vague term on the first calculation with “recurring users” which means that people viewed the website and *return*. IE: someone didn’t read one item and leave forever. These are always the best customers because they clearly see the value in what you’re doing. This is also why many companies have blogs that accompany their service (personalcapital as an example – not a recommendation, we haven’t used it before, but it has a blog to accompany the product).
The second and *much more important* metric is paid traffic conversion. That is what separates real money from a smaller scale business. Paid traffic converts are where you make a lot of money. A lot.
If you can convert 3% of paid traffic into sales and you sell a legitimate product worth $100+ you’re going to get rich fast, fast, fast. The reason why paid traffic is so important is simple. Your product is so good that it does not need to be “pre-sold” via trust over long periods of time.
This is exactly why athletes, musicians and celebrities are paid so much to endorse XYZ products and why many affiliate marketers are being sued for impersonating celebs. A great sale is a quick one to a stranger. Enough of the explaining…
If you’re running a biz and you see a 3% conversion rate on your paid ads… We have one word for you. Spend. Spend all of the money you have. Take out loans, liquidate all of your easily sell-able assets and keep spending till it dries up. Once it dries up, turn off the hose and go to the bank.
So here’s the quick math to see how healthy the business is: 3% convert on paid ad + $100 price point = healthy. So if you see a business consistently advertising on extremely high traffic website (yahoo finance for example) that company is doing very, very, very, well. Don’t worry, the affiliate selling it is also doing quite well himself.
In Short: Unless a business is selling aggressively on paid ads in high traffic mega websites, it is not generating a large amount of income. If you are ever in the position to sell a good product at $100+ on 3% conversions, spend until the money dries up.
3) Quick Numbers for Personal Finance Calculations
Strong personal finance knowledge will set you free from regular people. It really will. If you know the math between income, living expenses and compounding you’re going to avoid severe financial pitfalls. While the link we provided is a basic list post, we’re going to add quick calculations that will not only improve your personal life but also improve your social life.
The Magic of 80%: Most people lie *up* meaning that they will say they make $100K a year when they really make $80K a year or so. Naturally, we recommend you do the opposite.
Here is what you do if the topic of money comes up with “regular people” (you will deal with regular people consistently due to the law of large numbers). They will incessantly prod you with how much you actually make so the best way to trap them is as follows: 1) talk about your minimalist lifestyle and complain about some mundane payment – “cellphone bill” usually works, 2) after complaining about your fake cell phone bill “problem”, ask if they have reception problems at their *home*.
They will usually respond by giving you a little bit of detail about where they live. Once you have this you can now give them your “number”.
Take the neighborhood. Assume they live in a 1 bedroom. Take that number… multiply it by 3 (after tax money), gross up to the total annual income. Boom. That is how much you “make”.
If rent is $2K a month, this means $6K net/month, this is $72K/year, this means ~$115K a year gross.
Too much math? Here is the quickest version!
Monthly Rent of Person * 50
It really is that simple. We’ve found that if you claim to make ~80% of what the other person makes he won’t feel insecure and won’t prod you for any business advice or otherwise. The calculation will get you to ~$100K a year when he likely makes $115-130K gross! You’ve avoided the topic smoothly.
In short: Regular people are always insecure and even if they are secure there is no point in testing the waters. Say you make 80% of what they make and move on. The best way to do this is to simply multiple rent by 50, say that is your gross income and be sure to “complain” about taxes, a mundane bill or otherwise.
A Year Per Month: If you really want to step on the gas with regards to your financial future, start calculating your net worth by years of living expenses saved. If you are young and in the 22-25 bracket this is likely low… between 0 and 1.
Everyone has different levels of risk. But. If you’re reading this blog you likely don’t mind the truth so your lifestyle has a lot more flexibility when compared to your typical schlub.
Every year you have saved = one month of your future life.
While the 4% rule sounds good, it is derived by the personal finance crowd which is primarily a bunch of liars and scammers. You’re a smart person so you realize that retirement is a scam and don’t want to become a boring type A person with no friends, no girls, no personality and no meaningful life experiences.
This means you’re going to shoot for 12x your annual spending. Once you get there, you can now spend like mad (if you want). If you have 12 years in savings there is no reason to accumulate 100 years of expenses since you won’t live that long anyway. Accumulate 12 years and begin doubling down on life experiences.
But this is risky! Of course it is. That said, if you have $1.2M saved (using $100K as the marker), then we are certain you will be able to earn $50K a year in another profession.
4% times $1.2M = $48K + $50K = $98K… Roughly a wash.
In Short: A single year of savings is going to give you a month of time for the **rest of your life!!!** Get to twelve and you can continue working hard on your actual passions/businesses while ratcheting up the expenses with nothing to worry about.
4) Logic Says Success is Relative
Take any success a person has is a field and double it. That is going to be successful in their eyes. This can be applied to any field. If someone makes $50K a year, they will be impressed by $100K. If someone has a “notch count” of 10, they will be impressed by anything over 20. If someone played division 3 football, they will be impressed by a division 1 athlete. So on and so forth.
Knowing this rule of thumb, you can quickly look at audiences to determine if they are groups of people you want to associate with. We’ve already made several association mistakes (we ain’t perfect and will fix this over time) but at the end of the day, you can judge the audience by their relative standards.
Some quick ones to go through:
What type of person is impressed by $100K a year? $50K or less.
What type of person complains about a girl’s standards? Likely a schlub.
What type of person worries about politics? Unsuccessful people blaming the “system”
What type of person is impressed by photos on a computer screen? Can’t do math, is an idiot.
What type of person gets angry over words on a computer screen… “attacks”? Privileged.
In short: Find a person’s “hero” and divide by two. That is the audience. Do you want to be a part of that audience? If so, stay. If not, leave.
5) Application of Logic to Recognize *Our* Weaknesses
The word *our* is highlighted because the authors of this blog have clear weaknesses. Everyone has a weakness. If someone cannot call out a legitimate personal weakness they are untrustworthy individuals.
Use logic to recognize weaknesses, limit them and improve upon them.
Motivational non-sense will do the reverse. They try to inspire people who are not inspired: “be all you can be!” “get pumped up!” “get after it!”, “everything is a limiting belief!”… Only a loser would respond to this because it implies the person needs a “push to get started” and is okay with someone talking down to him. As if you haven’t been going 100% since day one. Degenerates respond to insults.
Instead. Focus on *acknowledging* weaknesses as you improve upon your *primary* talents.
Acknowledging Weaknesses: This is the best word to describe the process. Acknowledgement implies acceptance. Since weaknesses would result in horrible “headline copy writing” we’ll use this blog as an example.
We’re a Bunch of Narcissists: This is evident in the existence of the blog alone. Anyone who wants to spread their message far and wide is going to have some level of narcissism that is *above average* to say the least. It is better to acknowledge this as a piece of our personality and take the good with the bad. The good is that narcissism leads to solid speaking skills and aggression. The bad is that it leads to arrogance, self importance and lack of empathy.
We’re Not Empathetic: Building off of the previous section, we have very, very, very little empathy. Your girlfriend dumps you. You give us the story in 5 minutes. After that, if you say another word about it… We’re just going to laugh. This is not very “nice” but it is the reality. This is a function of life experience as well. But. At the end of the day, unless it is something serious such as death (real health issues) or prison (loss of time) we’re not going to care much. The end. <– Couldn’t even write a paragraph with a drop of empathy.
We’re Not Interested in a Stranger’s Opinion: This is why we don’t read more than 2-4 blog posts a month (max). Unless we know the person in real life, we have no interest in reading anything they have to say. The only way to really break through and get us to listen to anything is by providing 1) actionable advice or 2) giving enough detail for us to figure out if the person is legitimate. That is the only way we will ever read or listen. Once we have done the due diligence, we add the person to the “radar screen” and try to pluck items up here and there. If we do our diligence and realize the person is simply mediocre… we ignore them. Lets make this crystal clear. We do not care who other people associate with. If person A has useful information and person B is his friend… It does not mean we care about person B. In fact, we probably don’t care at all. If you have a business partner with a friend who is a drug addicted lunatic, you don’t need to talk to the friend.
We Get Annoyed Over Investing: We will never do legitimate securities analysis on this blog. That will never happen. We already had two interactions over investing that were down right stupid and dangerous and we’re going to make that the last two interactions for 2015. Last year we had 10 interactions, this year is two and hopefully next year will be zero. The reason why we get annoyed is simple. Just dollar cost average into VOO (not our advice, stolen directly from Warren Buffet) and go back to building income to get your net worth above $1M by thirty. If it is good enough for Warren Buffet’s family, it is good enough for everyone. People can’t even explain what a futures contract is but they want to invest in individual stocks with a net worth under a million. Atrocious. Embarrassing. Irresponsible. Stupid. Lazy. Gambling. Uninformed. Hell. The tone in the paragraph has already gotten annoyed and we’re going to delete any investing questions off of this blog. The good news is that we’re overdue for another sector overview which is the best way to inform without getting ridiculous comments from broke retail investors.
In Short: We have many clear and obvious weaknesses (even more from a personal basis). Now you know why this blog exists. If we can tolerate annoying emails from retail investors about stock picks and avoid extreme narcissism by forcing ourselves to give back (ie: free advice for Wall Street entrance), help people who are down and make acquaintances with strangers… We’re *limiting* those weaknesses by doing this as a hobby.
***Pro-tip, if you have similar bad qualities, surround yourself with 1) people who are better than you and 2) people who constantly talk about “investing” so you can practice your smile, nod and ignore skills.***
Finding Primary Talents: There are clear strengths here as well. Namely 1) direct communication which makes it near impossible to misinterpret, 2) ability to distinguish haters from critics – haters are all deleted and 3) ability to showcase a wider range of tones depending on the mood we’re in.
Instead of making this section about us (like the weaknesses piece) we’ll flip it around and help *you* find your primary talents.
Physical: This is where we would start if you’re a teenager. Are you an explosive athlete, an endurance athlete, an in-between athlete, a precision type athlete? We don’t know. It is your job to find out.
Once you find your talents, see if you can obtain a scholarship in that activity and leverage it to get into an elite university (Hint: many elite educational schools don’t have great sports teams in every field). If you find that you’re not talented enough to make it worth your while… then go and pluck out an explosive athlete (football, basketball, sprinting). Befriend them and get basic training advice. That’s your new routine with perfect form all set in stone. For free.
Analytical: While physical is the easiest to determine, analytical is the most important one. What is your brain good at? Yes that is a terribly phrased question. But. It makes sense. What do you have a knack for? There are only three real analytical skills to be learned: 1) intent, 2) numerics and 3) synthesis. If your skills are primarily intent and numerics… You’re going to be a great investment banker. If you’re heavier on numerics and synthetic you’re going to a hedge fund (heavier synthesis) or becoming an engineer (heavier numerics). If you’re heavy on intent and synthesis you’re going to be a great salesman.
*We realize we have tried to summarize a full post in three items: intent, numerics and synthesis. Without elongating the post, ask yourself where your primary skill is. Do you whip through software code like it is a comic strip? Numeric. Can you quickly figure out if someone really wants to buy an item? Intent. Do you have a deep memory bank that is constantly used to solve large scale issues? Synthesis.
Art: Some people really have this down. If you need an example of someone that does not have this down look not further than this blog! You can clearly see that we do *not* have a knack for writing. This blog is mediocre at best, likely in the bottom 25th percentile to be honest. No surprise that we don’t write for a living.
If you can write, draw, act, sing, play or design at a level that is in the top 5% or so in the USA… You’re going to be rolling in the 7 figure range sooner than later. Finally, we’re obviously not the right people to judge your artistic skills. We wish we could give you advice on art but that would be downright dishonest. The only true measure is approval from an elite person (they tell you you’re good), we hear the Julliard School is quite elite.
In Short: There are three groups of primary talents: physical, analytical and artistic. Try a slew of different tasks for a few hours a week when you’re young. Once you find the one that you’re truly going to excel at… Step on the gas and never look back.
We finally came up with a decent phrase for the views of this blog.
This blog likely comes off as harsh and downright cynical at times with splashes of over the top entertainment in the form of videos and pictures. It’s really just a balance. Cynical people are awful, depressing, type A people (usually an atheist as well!). Unrealistic people are also awful, “you can do anything in the world!”. So the best explanation is optimistic reality.
If you can run 100 meters in 12.0 seconds in peak physical condition at the age of 18… You’re not going to be an elite 100 meter sprinter. Ever. You’re slow relative to the elite. That said, to say that you “can’t run faster than 12.0 seconds” is incorrect. There is a major difference there. Saying you’re not going to beat guys running in the 10s is simply correct. Saying you cannot run in the 11 second range is incorrect.
There is always room for improvement. Use *logic* to focus that effort in the right area. It is up to you to find the area in which you will do well. We don’t know where your talents are, that task is in your hands.
WEALTH BUILDING RECOMMENDATION
Manage Your Finances In One Place: One of the best ways to become financially independent is by signing up with Personal Capital to track your finances for free. They are an award-winning online platform that aggregates all your financial accounts in one place so you can see where you can optimize your money, track your net worth, manage your cash flow, and analyze your portfolio for excess fees.
They’re best two features are their Portfolio Fee Analyzer and their Retirement Planner. The Portfolio Fee Analyzer showed me how I was paying over $2,000 a year in portfolio fees I had no idea I was hemorrhaging! The Retirement Planner users your real input to run a sophisticated Monte Carlo Algorithm to ascertain whether your retirement is on track. Simply link up all your accounts, click Advisor Tools on the top, and then choose either Investment Checkup or Retirement Planner to get started.
There is no better online free financial tool than Personal Capital. The firm is run by Bill Harris, the ex-CEO of Intuit and Paypal. They’ve got some of the most trusted investors and partners, included USAA, America’s leading financial institution which first started serving our military families.
Updated for 2016 and beyond.