It’s All About Taking Losses

While most people focus on hitting financial benchmarks, increasing the quality of their friends and moving up in the game of life… to do so requires a lot of losses. It would be great to be Money Mayweather. Undefeated. But… What you don’t see are all of the “losses” he takes outside of the ring: sacrificing family time, training at insane hours every single day, film study, self study, etc. Since everyone will take losses we’ll attempt to outline 1) how to deal with said losses and 2) how to avoid “life changing losses”.

Small Scale “Losses”

These losses deserve to be in quotes because a small loss is generally part of learning a new skill. It can also be a loss attributed to temporary bad luck and a quick cost benefit analysis.

$3 Cab Fare Ripoff: Anyone who has spent some time in foreign countries has gotten burned for a few dollars at least once (okay, more like 10+ times). The amount is always negligible. Instead of getting *emotional* over the event, you have to take the loss and move on. Reiteration…. “Take the L”.

Eventually you will have a few trusted cab drivers and it won’t happen anymore. There is no point in arguing over the $2.75 gringo surcharge. The negative energy generated by getting upset over the “gringo tax” just ain’t worth it. Never will be worth it.

While you *should* be allergic to getting scammed. $3 is not an amount worth fighting over. It is not worth the headache. Use this as motivation to find a good driver and a good set of acquaintances in the future.

Head Turn Rejections: These rejections are now hilarious. For one reason or another, the girl looks at you and burns you within 0.17 seconds to increase her self esteem. You know the answer. *Genuine* laughter and onto the next.

The funny part about dating is that once you reach a certain level of value… none of these head turn rejections impact you. They also don’t register as you become desensitized to any rejection in general. Naturally, these types of losses are also *most common* with lower value men since they give off a  push-over vibe. In the rare instances that it does happen, simply “take the L” and laugh.

The Awesome Feeling of “No”: If you want to take your first baby step towards success… Desensitize yourself to the word “No”. Why? You are going to hear this a lot if you work in *any* form of sales.

Every single time you hear the word “No” you’re one step closer to hearing the word “Yes”. In fact, we’ll go further than that. If you’re not hearing the word “No” on a daily basis, you are not improving. Take out your iPhone and set up a daily calendar notification.

“I must get someone to say no to me at least once today” 

Eventually you won’t need the notification, but the point is clear… If you’re not getting the word “No” on a daily basis… How can you possibly improve? It is not possible. Even if you’re much older and have a long list of clients, you should still spend at least *part* of your day building up future clients. This is a great way to see if someone is full of it as well. If someone has *not* failed at anything they are, with certainty, not good at anything.

Embarrassing Learning Curve: You should already know what we’re going to write here… Look no further than old posts here or our previous design! When you start something brand new you’re going to suck! This is all part of a big learning process and you should be okay with being embarrassed *at least* once every three months. Unlike the “awesome feeling of no”, embarrassment is usually a feeling of recognized incompetency.

The learning curve is always the same: Incompetent -> Knowledge of being Incompetent -> Basic Competency -> Unconscious Competency -> Third Party acknowledgement of talents.  When you recognize you’re incompetent you usually feel embarrassed and it is your job to push through to basic competency.

This will keep you humble in real life. When you are willing to be seen in a state of incompetence it is going to be very difficult to let your ego and narcissism get to you over the long-term.

Physical Losses: How many time should you train until failure? We believe once a month is adequate to avoid injury. One day every single month you should train until physical failure to understand that you are not invincible. Physically.

They are several ways to do this: 1) lose in fight – boxing, wrestling, MMA, 2) train in the weight room until exhaustion – unable to do a single rep, 3) take up an individual sport and get crushed – tennis, golf etc.

We are sure there are many other examples (feel free to add them) but you should push your body physically to recognize that 1) you are human and 2) there are always people better than you – physically. Similar to learning something new and suffering embarrassment, recognition of physical limitations is also a humbling experience.

Concluding Remarks: This piece is short and sweet. The readers of our blog are self motivated and don’t need a drill sergeant yelling at them to “get off their butts”. Instead after skimming the five items above it would be smart to do a quick check to see if you’re lacking anywhere:

1) Are you easily angered by meaningless $2-3 events? If so, start practicing basic emotional control.

2) Are you easily rattled when a girl turns you down? If you’re over 22 years old… You have either lived a privileged life (need to fail at something life changing) or you need to talk to at least 100 girls.

3) Are you upset by the word “No”? Get some form of sales experience… Starting… Yesterday!

4) Have you embarrassed yourself in the last three month? Either you are completely desensitized and realize you are human or you are unwilling to learn new things. Get out of the comfort zone.

5) When is the last time you pushed your body to the limit? No that is not meant to be a cooky motivational question. It means when is the last time you realized you’re not an amazing physical specimen? Get out there and find someone better than you and realize there is always room to improve.

Medium Scale Losses

Now we’re onto the good stuff. After many years of living you’ll find that *everyone* suffers medium scale losses. These hurt *a lot* and we believe they are unavoidable. We are going to try and outline some basic ones and how to limit the potential loss… But the reality is that everyone is going to slip up. Get ready to “take the L”.

Business Taxes: When you start making money off of your business, the pain you feel when you pay Uncle Sam is going to be immense. Incredibly so… is an understatement. The worst part? We’ll go ahead and wager that you’ll eventually make a tax mistake.

Form an S-corp not an LLC. Honestly… practically everyone is going to go through the same growing pains. They form an LLC because it is the easiest way to get your first business up and running… Then… the pain comes. You realize you paid 15% (or more!) in taxes – self employment tax buddy! If you generate $200K in income per year… That is $30,000 USD for nothing. You are paying an extra $30,000 for public services you don’t use and meals for prisoners (no joke). If you have kids… we will go ahead and bet that you’ll send them to private school instead of the horrific public school system!

While we have highlighted the importance of an S-corp twice, here are some basic house keeping tips: 1) Once you clear ~$75-150K in income, get an accountant, 2) Keep every single receipt for your business, everything from that dinner bill to your cellphone bill… keep it *all*, 3) take 2-3 days out of the beginning of the year and read up on tax code changes. No exceptions to any of these three rules.

Personal Taxes: If all of your income comes from a W-2… There is not much you can do. We would say your best bet is to avoid *exchange taxes*. Any time you move a large sum of money there is a high probability that someone is going to take a cut. As an older mentor once said “Stay in the flow of money and you’ll get rich”. It is true. When large sums of money change hands, someone is usually picking up a fee.

The easiest example here is any sort of rollover. Lets say you roll over money from one investment account to another. If one is pre-tax and the new one is post-tax… Make sure you look up the rules on *timing*. If you start your career in New York city and move to Texas… Wait until you officially live in Texas before moving the assets. Simplistically, if you move a 401K into a Roth, you are going to pay *both* state and federal taxes. Texas has *NO* state tax! This means you should not roll over a single cent until you are officially in Texas. ~7-9% in taxes saved! (this may or may not have happened to one of our authors)

The Wrong Hire: Wall Street recruiting usually consists of ~5-7 rounds of interviews, if you thought recruiting was brutal… Wait until you are on the other end of the table! If you hire the wrong person it is going to cost you *at least* $100K. That is not an exaggeration. Now you know why everyone is so intense and risk averse.

Why does it cost so much? Think about it. If it takes 1 month to find a new hire that is lost time. Lost time is lost revenue. In a competitive industry like Wall Street an extra recruiting headache is worth *at least* $20-30K/month to you. In addition, you have to train the person. It takes six months to train a new hire! Even if the new hire is experienced, the training period is still ~6 months.

Lets add this up. $25K search cost + ~6 months of training (assuming base salary of $120K) = $85K

That is just the tip of the iceberg! Lets add on the additional cost of firing a new hire… After 6 months,  you have to use political capital to fire them and you look like a poor decision maker! This is a hit to your reputation that is more costly than the $85K!

How do you avoid this at all costs? The answer is you probably won’t. But. Here are a few tips to improve your hiring practices: 1) create an examination – make the examination extremely specific to what *you* want. If the person naturally thinks similar to you, it will save you a lot of headache; 2) have at least two junior people and two senior people give their opinion as well. Listen to them. Your team is going to see if you have any biases towards the candidate; 3) look for tenure. If someone does not move to a new position every year, chances are they are serious about the profession and your current opening.

Loss of a Close Friend: Successful people have an extremely small set of people that they truly trust. This is for good reason. There are very few people worth calling friends and they are less than 1/1,000,000. You are going to make at least 3-5 incorrect judgements with regards to character.

Some more bad news. If you have over 10 “friends” that you truly trust… We will bet every single penny that *at least* two of them are not really friends. You just haven’t given them an opportunity to show their true colors.

Once you get burned once, you need to move on. There is no way to mend the situation. Instead of harboring anger towards the person, you can be tolerant if you run into them in the future, but do not trust them with anything.

“Fool me once, shame on you; fool me twice, shame on me.”

Under no circumstances do you give them a chance to fool you again. Let them live with the shame of being an untrustworthy individual. Move on.

Serious Physical Injury: By the time you reach the age of ~30 you will likely suffer from *at least* one physical injury. Hopefully it is not as painful as Mike’s skin battle. But. Something will likely happen.

When you get hit by the event: broken leg, tendon tear, freak accident, sickness… Do not ignore the injury, embrace it. There is a big difference. If you can ignore the injury it is not an injury. It is simply pain.

Take note of the injury and immediately go to the hospital if it is something clear (broken bone, tendon tear etc.). Then do your own research. If you go through the process of personal research you are taking action and you are embracing the injury. Do not sacrifice your body (health is always the most important part of life).

Once you go through several hours of personal research you will likely find some “out of the box” cures for your ailments. Try them. You will reap the rewards of being in tune with your body as you can will sense your body responding in either a positive or negative fashion! Now you’re much more educated on a new health topic and you have improved your recovery time.

Concluding Remarks: Medium scale losses are painful and unavoidable. Accept that you are not perfect starting right now and you will be well prepared for the pain. Why is it unavoidable? Read between the lines. All of these medium scale problems are due to *missing details*. We really need to emphasize that point. You will make medium scale mistakes due to *missing details*.

You incorrectly lift. You incorrectly judge a person’s character by avoiding details. You breeze through an important piece of the interview process.  You focus too much on revenue generation and forget to look at the structure of your business…. It happens. Any time you are *growing* at extremely rapid rates, you’re going to make at least one painful mistake. This is 100% normal. Most smart people pay *too much attention* to detail and miss the most important aspects. Better to take the painful medium scale losses here and there (in exchange for growth) and avoid the catastrophes.

Life Changing Losses

Now we’re onto the more serious items. Avoiding life changing losses. There are very few things that can ruin your life, but if you make the wrong choice it’s going to take years to recoup the losses.

Choosing the Wrong Spouse: We have beaten this into the heads of every single one of our readers. Never get legally married. If you want to have kids… Fine. If you are truly “in love” great. Just don’t involve the government. <– noticing a trend?!

Instead of expanding on this point… you can have a good laugh here and we can move on since we have explained this 100s of times.

Taking on Too Much Debt: Debt is not something you should mess with until you’re able to take the pain of leverage working *against* you. It is that simple. Overloading yourself with debt is a sure fire way to kill your financial future. Debt should have a *significant* return (as explained in our guide to college).

There is nothing worse than the horror stories of 2008. Investment banking associates took their 2007 bonuses… levered up aggressively… and saw a crushing 35% correction that wiped out their net worth AND took their income to zero (fired!). If you are going to lever up… Be smart about it!

Here is a good way to see how much leverage you can take

50% of your monthly passive investments = to monthly Debt payment.

We realize that this is an incredibly risk averse way to think about debt but if you’re taking debt seriously (you should) it is going to yield significant returns for you over the next 10 years. If you have $4,000 a month in passive income then you can lever up to $2,000. This means you have $24,000 a year or $600,000 worth of leverage to play with (value of ~2-3 homes and assumes 4% interest).

All of the doomsday prophets are going to jump in and say “what if your passive income goes down 75%!”… Honestly this is unlikely. Even if there is a 50% correction and your passive income declines by 50%… You’re going to find ways to generate income. Even during the “great recession” top tier talent still found employment.

The Wrong Business Partner: We wish we could elaborate more here but it would give away too many personal details. We will say this. *Do not do business with anyone you would not trust with all of your money. Every single cent.*

If you are going to work in an actual business environment with someone (more cut-throat than anything else in the world) you better trust that person with your life. If you choose the wrong person you will lose hundreds of thousands of dollars *or more*.

Earlier we noted that 10 friends is already overkill. When it comes to business partners? Maybe two. Maximum three. The rest are guys you will “work with” but never *trust with*.

Not Taking Care of Your Health: This is the only thing more important than money and relationships. Health. Health is everything. While we primarily focus on money and social relationships (it’s more fun and our “passion”), you cannot have either if you are unhealthy. Unlike the other items we’re going to give a quick three step process to improve your health.

Step 1) Eliminate all stress. We strongly suggest practicing stoicism. As a commenter noted, here’s a great definition:

“Focus on doing your best and delivering on your full potential. If you do that, all stress is irrational, because you’re doing the best you can possibly do.”

If you are reading this blog you are more likely than not an actual winner. That is not meant to be motivational garbage that poor people read. It is reality. Our writing style is extremely direct, to the point and downright… Brutal. The only type of people who respect this form of prose… Are winners. Why? They are okay with hearing the truth because it is better than being kissed with a lie (main stream media).

Winners do have one issue though… Obsession with perfection. This can severely damage your health which is why it is our number one step to healthy living. Do your best but realize you cannot do *more* than your best. This will take 5 years to master. If you can mentally practice stoicism for five years we guarantee you’ll be *much* happier than you were in your early 20s.

***Pro-Tip: If you work on Wall Street. Find the managing director who is happy (looks his age or younger). Not the psychotic managing director who looks 10 years older than he is and still worries about the pastel coloring (No one is dying bro!)***

Step 2) Diet awareness. Not diet obsession. The difference between the health freaks who look terrible and the health freaks who look great is simple. Balance and stress (another trend).

The best way to create good habits that are repeatable and healthy is to shop when you are *full*. This is counter intuitive. Most people buy things when they feel terrible which leads to poor meal decisions (search for filling items, hence why most people eat carbohydrates when under stress). Instead you want to set aside 1 hour per week where you go health shopping. Buy all the items you need at Whole Foods in one fell swoop and do so on a *full* stomach. Buy absolutely nothing that comes in a cardboard box.

Step 3) Two blood tests a year. One blood test is going to go to the doctor and the other one you’re going to read yourself. Again. If you are physically fit you are going to be in tune with your body. Your journal will also give you an idea of any lifestyle changes. This is going to help you 1) catch any negative diseases early and 2) prevent you from worrying about temporary spikes in specific vitamins.

Concluding Remarks: Notice something specific here… You are not able to “take the L” for any of these four events. There is no reason to ruin your life by: 1) choosing a spouse and involving the government, 2) taking on too much debt, 3) going into business with the wrong person or 4) ignoring your health (ie: your life).

Finally, you may have noticed an annoying phrase in this post: “Take the L”. We did this for a reason. This is a *great* way to make this a fun game for you if you’re a young person. Any time you try something new and your *actual* friend sees you strike out… jokingly tell each other “Take the L”. Eventually people around you are going to realize you think it’s a big joke and it actually *improves* the environment (we’re talking about simple social situations like a dive bar – typical scene in your early 20s).

By popular demand here are the action steps:

– Do not sweat small items. Getting hustled out of $3-5 is not going to impact your life at all.

– You should have no emotional change if you’re rejected by a girl (age 23+)

– You should enjoy the feeling of the word “No”. It means you’re trying to improve in a new area. (Age 24+)

– Do something that makes you feel embarrassed even as you become older and more successful

– Push yourself to physical failure every single month

– Be prepared to take medium scale losses. Accept this as fact and please re-read the section above! Finally, if you were wondering why there was no post this weekend you can thank the government one more time!

– Never pay more taxes than you should

– Have *multiple* people interview *any* new hire. Your reputation is on the line. The money is secondary.

– By 30 you will likely suffer a real physical injury. Train so you’re prepared for real physical pain down the line.

– Under no circumstances do you take a life changing loss: 1) choosing a spouse and involving the government, 2) taking on too much debt, 3) going into business with the wrong person or 4) ignoring your health (ie: your life).

It Is Not Okay to Take Losses in the Form of Fees: Personal Capital can help you organize all of your investments in one clean software platform. The Company offers *free* software tools with the following four key features: 1) ability to avoid losing money by tracking all fees associated with an investment product allowing you to choose the best possible fund for your future, 2) portfolio analysis where your risk profile is stacked up against your current age and retirement goals, 3) in addition to these free tools, you can also track your net worth and path to becoming a millionaire and 4) when you hit $100K in networth you’ll receive a free one time consultation with an investment professional at Personal Capital. After linking up all of your accounts you’ll be able to sit back and watch as your net worth goes up and your fees remain minimal over the next several years. We strongly believe that Personal Capital is the premier personal finance software tool when compared to its competitors such as Mint.

Comments

  1. Kyle says

    I didn’t even start reading the article and just did a ctrl + F for the word tax. It immediately highlighted several times in this article and I had to laugh. I will go ahead and read the whole article (thank you for the best brutally truthful blog on the Internet) and also a bigggg bigggg bigggg F-You to Uncle Sam from me as well.

  2. Nick says

    Really enjoying the past few posts. Each one of these recent posts has shattered one of my previous beliefs. Eg. “you should enjoy the feeling of no. it means you’re trying to improve in an area.” Most people think of ‘no’ as something to avoid completely. You’re teaching us to strive towards ‘no’. Brilliant.

    Btw, Ray Dalio has a good system for learning from mistakes (applicable for mistakes from medium scale losses?). Could be useful for readers. It’s a 6 question checklist: 1) what went wrong, 2) have you made a mistake like this before, 3) what was the immediate cause of the problem, 4) what was the root cause of the problem, 5) what can you do to correct the problem in the short term, 6) what can you do to prevent problems like this in the long term

    • Wall Street Playboys says

      Correct. If you’re not hearing the word no… You’re either not asking for enough or you are not getting out of your comfort zone.

      As usual, regular people hate hearing the word no “do the opposite” – beating a dead horse we know.

      Finally, that checklist is solid. For medium scale losses it usually means assigning the task away. Hence an accountant for tax issues.

  3. The Player says

    Good Post. Two random comments:

    1. If one thing that I have totally internalized from “How to Get Rich” is the phrase: **Assumption is the mother of all fuck-ups**. Never assume, try it and see what happens.

    Your mind will come up with loss scenarios. Just like the first time I dived from a 10 meter high board. I was scared shitless and almost thinking of giving up. My dad, being a Army Colonel, gave me a simple option – either I jump on my own or he pushes me into the pool. Knowing him, the easier option was to just blank my mind and jump. At least, that way I would have shown him that I had some balls still left in me. I jumped and realized how much my mind had blown it out of proportion. Then I did another 6-7 jumps that day (and almost every other day in summer that we used to go to swim).

    Most of things you describe above are learning experiences. If you are facing them, your mind blows them out of proportion. You just have to go through them and you will see that somehow you were able to adapt and improvise. *Almost* nothing will kill you, but you will come off smarter and with a new lesson learnt.

    Never Assume. Just do it and see what happens.

    2. I don’t read that much. I learnt some time ago to filter garbage information out there. But somehow (I think through that Mikael Syding guy you guys linked to), I ended up on this article: http://jamesclear.com/professionals-and-amateurs

    It was a decent message: Build a system, and follow it even if you don’t feel like. And, to stop freaking yourself out, you need to look at just one week at a time. (Which I think it quite weak minded, but hey I was that once so I understand).

    Now the funny part: I can see how targeting the masses dilutes the message. Read his “DISCLAIMER” in the article:


    Some people might think I’m promoting the benefits of being a workaholic. “Professionals work harder than everyone else and that’s why they’re great.” Actually, that’s not it at all.

    WTF is wrong with being a workaholic? I am putting in the hours to fix the mistakes I made in my past. I am not his audience and I don’t need sugar-coating. But masses do. And, they will not even read what you have to write because it will offend them.

    So I don’t think you have to worry about them becoming regular readers. Good that you are trying to scare them off, too.

    • Wall Street Playboys says

      Solid comment sir:
      1) assumptions go away when you work in sales long enough
      2) agree it results in a lot of screw ups if you assume
      3) being a “workaholic” is seen as bad only to those that hate their jobs. There is nothing more fun than growth.

      Just don’t lose your personality in the process! That’s not worth it!

      • Alex says

        What do you mean “don’t lose your personality in the process!”?

        Do you mean not to drop everything else, just for work and keep some balance, like 80% work, 20% anything else?

      • Wall Street Playboys says

        It means you should focus most of your time making money and improving your life.

        Just don’t go full retard mode and have no social skills at all.

        Our post on living a balanced life explains this.

        2 days a week of fun social activity so you don’t become a horrendous “Type A” personality. Those people all suck.

      • says

        But how do you get rid of the guilty feeling when you go out? To give you more background information, I’m studying engineering at a non-target and I want to break into banking. I know I have to work much harder than others, that’s why I feel guilty when I’m out on weekends because I keep thinking that I should be doing work instead and improving myself. So this semester I’ve stayed in a lot more to focus on school and because I want to hit 8% bodyfat by summer (and we know how much drinking can set you back..). I’m not socially awkward around people and I’ve got no problem getting girls if I want to, but I just feel like I should be working 24/7 because I’m already behind the competition. What are your thoughts on this mindset?

      • Wall Street Playboys says

        In your case, you’re not working hard enough.

        If you are actually working hard, you hit a “wall”. You literally cannot work anymore. So you simply stop and go socialize to relax instead.

        This is why the pickup community is a complete joke. They view picking up girls as “work”. It is just entertainment.

        So you need to work harder until you hit your wall. If you can’t do school work or work an internship, try to start a small hobby business.

        Our post on a balanced life covers this “on off switch”.

      • The Player says

        Indeed. My problem is quite opposite though – I am naturally very extroverted. If I don’t interact with people (or experience new sensations) I start losing energy. You have to face your personality without any delusions and adapt accordantly.

        On MBTI tests I consistently get 95%+ rating for Extroversion. Being active in Social Groups (Chambers of Commerce, EO etc.) and Friday evenings (gives me Saturday AND Sunday to recover) to party at a club I have on the lockdown. Monday to Friday Evening I grind.

        But if you are naturally Introverted, I can see how you might end up being extremely secluded.

        The most important thing you can do is to honestly face your strengths and weaknesses. And then figure out how you will make the best of your strengths and delegate your weaknesses. This advice may not be very applicable at the start of your 20s – it took me until I was 28 to truly figure out my core strengths.

        But one thing that I would really recommend everyone is to write down the lesson your learn from your successes and failures. I make a note in my phone as soon as the thought strikes me. My compilation of these notes has helped me way more than anything out there.

    • The Player says

      When I say that it takes time to TRULY figure out your strengths, it is because you need to, for the lack of a better word, Split-Test your personality.

      You might think that you are good at something but when you put it to test, you fail. Yes, you can get better by trying and practising. But if you try something else and get better results, that is a better return on time invested. You have to keep putting yourself in different situations and take a honest look at how you performed.

      Depending on the industry or the niche you are in, there will be some things that you HAVE to do. But don’t let the sunk-cost fallacy take the better of you. If you figure out that you can get way better return with course-correction than sticking to what you are doing right now, change your course.

      Obviously, you have to put in REAL effort before you make such decision as there is risk/reward to everything and it takes some experience to correctly analyse that. And, you get experience by doing things. Just like this post recommends. You will experience losses and failures, but they will make you smarter.

      To put it in a more manly way – take pride in your battle scars. If you want to earn those scars, you will have to go to the battlefield.

      Also – never forget to reward yourself for whatever victories you have. On that note, it was a good week for me and Sunday calls for a good cigar.

      —-
      PS: Wanted to add this to last comment but since I can’t edit it, here it goes. Feel free to merge both comments.

  4. CollegeBoy says

    Great article. I don’t agree entirely with the $2-3 gringo tax point entirely though. Third world-ers respect the rare American who haggles over a high taxi fare or double checks restaurant bills to spot an error. If by yourself, do whatever increases your utility ($2 isn’t worth the headache) but if with third world associates, make sure they know you aren’t willing to get ripped off even for a cent.

    • The Player says

      While I understand where you are coming from but you have to remember that not everyone is worthy of your time and mental energy. Unless they are valuable (and you will have recurring business with them) I will not waste too much time fighting for their respect.

    • Wall Street Playboys says

      Agreed my man! Maybe it wasn’t clear.

      If you’re alone and it’s your first two days there… $2-3 is not worth it. He could be crazy.

      Anything over $10 and you know the guy is really trying to screw you and you should speak up. IE: your restaurant example. If it’s double… Yes you should push back aggressivley. You are also in a public space so you have no real security risk.

      If it’s 4am and the guy charges you $2 extra for the taxi… And you’re alone… Risk reward says eat the cost and go find a better cabbie for the future!

      As usual art and common sense. Don’t be a pushover.

  5. Bobby says

    this blog is getting so good. Thank you so much for this pure gold. Quick question, apologize if you have addressed this elsewhere, I am in consulting and have started networking vigorously to get more involved in sales / business development. What is the number one sales training you would recommend? Thanks again for giving back with this website. You guys are really taking it to a new level.

    • Wall Street Playboys says

      We have recommended one sales book in the approved products. You should read that one and then get to work.

      1) read the book
      2) work on the tone of your voice 1x per week (power of 1% my man!)
      3) try to put yourself in public speaking situations

      That’s the quick three step process

      • Bobby says

        Book purchased. Regarding point #2, is the point to talk in a more assured, confident tone (never waiver, never show signs of weakness)? Regarding #3, I’m just finishing up the Dale Carnegie Training course and will continue to jump at opportunities to speak in public as they arise. Thanks again.

      • Wall Street Playboys says

        #2 “it depends” the oworst answer. But yes leaning more towards not wavering is 9/10 times the correct move. Sometimes you do need to change the tone for fun/entertainment though. No one is going to listen to someone who is incessantly pounding the table. Think 2/3 valuable content 1/3 personality/fun. But you’ll strike your own personal balance… Because… #3 you signed up for a course to take action.

  6. Zoloo says

    Great post.

    As an Asian living in Europe, I often bump on the street/communication weak prejudiced people with racist shouts towards me.

    As Seneca wrote ” Do you get angry, when a dog barks at you?”

    So what I do, is take a pass and it spills over me like walking in the rain.

    For me, reducing stress and health are the most important.

    Taking care of my teeth now, can smile longer 🙂

  7. Bartholomew says

    Wow, what a read.

    I have a confession to make. I am not on the same level as WSP guys. In fact I am many levels below and I still read this blog. It’s the most intellectually refreshing writing I came across in a long time.

    28 y/o . Doing a job on a wage, £20/h in UK , one rental property, savings not worth mentioning – not so good

    Suffered a bad injury, I had to learn to walk again after a big accident. I recovered, even competed in sports. I’m no swimwear model but better built than most guys. – Tick! I know what despair looks like and I know I got through to the other side.

    Not had a TV for 10 years – Tick!

    Women – definitely not bothered by ‘no’, definitely pushing it, still not dating the type I’m aiming for but I can objectively say I’m moving forward.

    Emotion versus Logic – I could be swearing at the WSPs, I could be crying, I could do a lot of stupid things as the gap between my achievements and those promoted here is immense. This could make me jealous, this could make me frustrated.

    Rather than this I find a certain kind of peace in reading this blog. No false hopes, no bullshit, no pity.

    It gives me a kind of support while I’m working to put my life on the right track.

    Thanks guys

    • Wall Street Playboys says

      Sounds like you may fall into the perfectionist stress area. You know what to do. Get to work. Sounds like you know what you’re doing.

      Based on reading between the lines… It seems that you *need a second form of income*.

      This is a *requirement* to gain wealth without becoming a frugal monk. By 25-27 years old you need *at least* two forms of income that are solid ($25k+ a year for the small side income). This dramatically changes your leverage (our debt equation) and it dramatically changes your confidence.

      This is the hole you need to fill.

      You are a tad above the range we mentioned here so we suggest getting stream #2 going asap! IE: starting last year!

  8. Houston E&P Associate Analyst says

    Excellent post, concise and straight to the point. No need to beat around the bush to accommodate the normals! Fuck normal people.

  9. ASF says

    WSPB,

    I have realized that I cannot start a side business without a partner. Just like I needed to hire a trainer to get me into working out, I need someone else’s assistance/energy to maximize my potential. I’m in “big law,” so mostly money not an issue, but I will never get rich doing this.

    Question: any suggestions for finding a number of like minded individuals? In some ways this is much much harder than getting into a relationship with a girl, because they are largely fungible, but biz partners aren’t.

    I think I could come up with some places based on Altucher-like thinking, but I wanted your take on it? Perhaps some kind of systematic approach to locating such an individual?

    • Wall Street Playboys says

      Some tough love. No one should ever do business with you as a partner.

      If you can’t even motivate yourself to start you have a zero percent shot at ever getting a legitimate business partner. You’re going to drag the whole team down so you’re not going to be recruited on said team.

      It is just the reality. Start something yourself. When it scales and you hit headaches, find someone to work with to fix the issue. That’s how it is done.

      Until then you are just deadweight and no one should help you. You are not worth to the risk as noted in this post. Business partners are more important than women, friends or a weightlifting partner by a country long mile. Not even close.

    • Chicity says

      Have you considered “an accountability partner”?

      Its a bit new age but based on the way you describe your problem, you need something different. The way you write makes me think most things in life have come easy to you

      Find a guy on the TMF, from a meetup group that centers around what you want to do, etc, etc and agree upon a few basics.

      Come up with an hourly rate of you and your partners combined worth & if you miss a goal, you pay your partner that amount.

      That should be the extend of the involvement for such a partner. You should be working on separate projects.

      Ultimately, it has to come from within. But if there is real money on the table, you’ll quickly find out if this idea is real or just an idealized fantasy.

      Good luck.

  10. b says

    Can confirm some of the “quack” health treatments actually do work.

    One actually saved my life — (I thought it was bullshit too, until I found a full book made by a PHD bio-something. I started to listen then — and it worked).

    After 7-10 doctors told me nothing was wrong — something was wrong.

    Pushed me back a year or two (had to do 6 years in college instead…). But otherwise came out extremely healthy.

    Food for thought.

    • b says

      Also — after you approach several thousand girls, you’re tall and good looking, and on track to make 1M by 30 (or at least close to that — as long as a certain industry’s prices go back up…). Having a girl reject you literally makes you confused.

      Unless your in a top LA or Miami club with guys who are literally rockstars (or some other super high value thing) it really confuses you.

      It’s like “Why would you reject me”?

      • Wall Street Playboys says

        Honesty no idea why but the phrasing of this second comment was hilarious. Literally chuckled.

        It’s 100% true. “You seriously won’t even give me 5 mins wtf? Damn you’re dumb!” Lol!

        Also yes, crack pot health stuff does work many times. Hence why it is *key* to be in tune with your body.

  11. Alex says

    Weekly post, awesome!

    Please correct me if l am wrong below…

    On sales and hearing no:

    Hearing a no is actually a good thing, because you get feedback on how to improve and be better at your next pitch.

    “No, because ” –> Instant feedback, or lame excuse and you must uncover the true reason

    “No, sorry but I can’t” –> They don’t “feel” ok to move forward, you need work on rapport

    However, especially if you work with emails etc, most of the time you simply won’t hear a reply, which I think is the worst form of no. Why?

    Because, you don’t know what is going on. Is he ignoring you? Did he have a bad day? Did life get in the way? Does he want to see if you want to follow up?

    So many cases… No feedback, until you follow up again and again

    On stoicism and obsession with perfection:

    This is the first time I hear from someone touching this topic.

    I don’t believe anyone can ever achieve truly perfection, but in my opinion until now, that was the reason to do it. To get as close as possible to perfection, otherwise isn’t it being like mediocre and not giving it your all?

    Also, if you go the other way and say “ok I did my best” isn’t there a risk of being too complacent and avoid growing to your full potential and pushing harder? I must say it sounds like a lame excuse to me at the moment, but I am more than willing to see your comment and consider the alternative.

    Lastly, would you propose something to geat started on stoicism?

    Thanks and keep it up WSP, aka best blog on the internetz!

    • Wall Street Playboys says

      1) yes the best part of getting a “no” is you get quick feedback most of the time
      2) no response to emails usually means the person types far too much or is wasting the readers time. Example: We still get emails eventhough it clearly says “business only”. Meaning if it has nothing to do with $ we are not going to answer. Ever.
      3) will add a solid book on stoicism to approved products tonight.

  12. Rob says

    According to Harry Browne’s sales book: A no means your prospect is not convinced to give up his resources (time,money,energy) to your product because it won’t help his problem.

    He advises: get to know what the problem of your customer is, see if your product can help. If yes: present the product, if not: advise someone else or let the deal go.

    Opinion about that? The book is amazing.

  13. Anon says

    Hey WSPs, I am a long time reader and big fan. I have a great post idea for you, hopefully you take it.

    Here is a hypothetical situation: an 18 year old man finishes high school and right away goes into business with no formal education. He is relying completely on 1. his technologically-backed product(s) and 2. ability to learn quickly. This 18 year old is smart and has a solid foundation in mathematics and language (he’s not a dumbass), and is studying Khan Academy Finance and Economics, Jordan Belfort’s Straightline Seminar Videos, and also Accounting/Branding/Marketing workbooks from the public library (among other things). He is going to attend part-time college at a non-prestigious school (strictly practical business courses) during the low-season of his industry (not full-time because he needs time to actually run the business which is going pretty well).

    Could you write an article that outlines what you think would be the most ideal way to spend the next 5 years of this 18yo’s life, outlining his self-education of every necessary skill he needs to properly run his business? (Not ideal as in, he makes $X this year, and $Xx2 the next year. Ideal as in the best method to teach himself what he needs to know for the best chance at success).And maybe some lifestyle and health advice too…

    Anyways, it would be a cool article and I really hope you write it, or at least comment back with some advice. Cheers.

    • Wall Street Playboys says

      Far too specific and far too detailed to leave a comment.

      Will consider for a post.

      We’ve already stated the best way (opinion)… go to an *elite* university: go to sales, Wall Street, Silicon Valley.

      Results: Make $250K by 25. Save half. Start a small company ($50-500K income). 30 you’re a millionaire + spent ~$125K a year for fun and “game”.

      Now you have all the time in the world to scale a company.

      • Anon says

        Yeah I thought you would say that! This opportunity was too good to pass up though, and I am already located in the best place to run it (not in the USA). I also don’t want to wait another 10 years to start a company.

        Specifically, what skills/knowledge would someone gain from an elite University’s business program that are directly applicable to an up and running business? And how can someone learn them independently?

      • Wall Street Playboys says

        Practically nothing you learn in school is applicable. 5% maximum (accounting/corp fin etc.)

        The only point is to use it to launch a career.

        If you don’t need the career… Then you’re on your own.

        Elite school = launch pad for career and meeting other future successful people. Every other aspect of it is junk.

        You are not missing out on anything in philosophy or psychology courses.

  14. -=NikFromNYC=- says

    The end result is to turn “approach anxiety” into “approach affinity.”

    It’s called being friendly.

    But both God and the Devil are in the details.

  15. Xavi says

    Im 18 yrs old and work in sales. I won an sales competition and got an BMW. Im in great shape. I get laid. I dont have a degree in anything. I live in the UK. Im incredibly self motivated. My question to you guys is how do I become financially independent. Is it really just to grind in your 20s and save up most of the money in stocks? If so what kind of work do you people suggest? Tbh i think that if you could work part time and spend most of your free time on finding a way to sell products/services w/ high demand you wld eventually be better off compared to grinding in ‘jobs’ in your 20’s wouldnt you agree?That sounds like the end all be all of money. Also you guys should emphasize the point that most people arent succesfull because they never take action (never push their comfort zone). Lifting weights is hard for them.Hitting on girls is hard for them. Working day n nite is hard for them. Taking a goddamn cold shower is hard for them. Being persistent in selling is hard for them. Try to live like normal people for 2 months. And then come back to pushingyour comfort zone notice how hard it is. You got to be self motivated. Love the value you guys provide. Applicable steps over motivation anyday..

  16. Vince says

    Just want to say thanks to WSPBs:

    I am a classical musician in training, working to get into somewhere prestigious in Europe. I am the top of my game in my country, and look to be doing well for my age world-wide as well.

    The thanks is for the idea of getting into sales. I needed an income while preparing and so I got a door-to-door job, prompted by the ideas on this blog. In addition I spend the rest of my time working on myself, my music and or working music jobs (playing in the opera, concerts etc which all pay well).

    Sales has taught me so much, such as enjoying know, constant self-improvement, reading people etc. I have no doubt that it has improved my whole life with the skills I have received.

    I wouldn’t have done this if not for this blog. Thanks!

  17. Anon1 says

    >The learning curve is always the same: Incompetent -> Knowledge of being Incompetent -> Basic Competency -> Unconscious Competency -> Third Party acknowledgement of talents.

    Brilliant.

    One comment and one and one half questions.

    1) Regarding loss of close friends i have to agree. It was extremely disheartening at first realising that the majority of people are not worthy of putting trust into them. The whole concept of ‘taking the L’ quietly and cooly moving on is important to good mental health. (Nothing stings like a close friend betraying/or otherwise fucking up)

    2) UK equivalent of s-corp, what is it and where can i find resources on it? (did try researching before asking)

    2a) Non dom Tax info for start up businesses where i’m a British resident but my business is mostly from the US, resources that aren’t BS on this?

    I’m not sure if you would know the answer to the questions re:UK situation but i’ll put it out there anyway

    • Wall Street Playboys says

      As you know we do not give advice on topics we don’t have experience with. In your case, we have no idea to be honest.

      What you can do is this:
      1) do the taxes uourself
      2) calculate the total you have to pay or get to keep
      3) go to an accountant after getting multiple recommendations
      4) see if it decreases by more than the cost of the accountant

      No need to boil the ocean. Once you meet one that can decrease your taxes… You know you’re getting good value and you just got rid of one major headache.

  18. Tom says

    Any websites or books that you recommend so we can learn the loopholes about the tax code for w-2 and 1099?

  19. DVY says

    Great post!

    Slight nitpick.

    -Social Security, you are taxed 12.4% on first 117k, then zero after. Medicare (2.9%) is pretty much flat throughout until you hit that Obamacare penalty limit. Means a 200k income= 20k supplemental taxes.

    – You are discounting tax deferred retirement plans (especially if its a 1-man show aka solo 401k).

    I’d say its probably not worth the hassle until you have a 75k+ side business.

    • Wall Street Playboys says

      If you still have a career it works out to ~15% extra as an LLC vs S-corp, already had this happen. (Yes implies over $117K).

      “For self-employment income earned in 2013 and 2014, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance)”


      Nothing like paying multi-6 figures for public services you’ll never use (no kids etc.). Christ gonna get a drink.

  20. Zoloo says

    “The Guide to the Guide Life ” is an awesome, practical book. William B. Irvine has really worthy books. I recommend to watch his lecture, that’s on youtube.

    Practice stoicism for better life.

      • Zoloo says

        Was wondering, which book on stoicism you will put. Seneca’s Letters is my favourite. Enchiridion is also an short and practical book. But Irvine’s books are a wonderful resource. Just read this one and apply to your life

  21. loss says

    Being a young (and likely dumb) Wall St employee – how do you deal with a loss of confidentiality?

    Not a fatal mistake of leaking something to an external party, but leaking the happening of a deal to an internal client party that did not previously know?

    Obviously this is a accept and move on type of loss – but how do you diminish the initial onset of panic?

    (I ask because this may or may not have happened to someone very close to me)

      • Wall Street Playboys says

        Well you answered your own question to accept and move on.

        That said someone like that should probably look for a new position if the wrong people find out. IE: loss of trust with an important MD.

        If it was a “political mis-step” then it can be recuperated with extremely good performance.

        On a 1-10 scale that mistake is probably a 7. Extremely bad but the person is not dead. If the wrong people find out, he should switch banks since he won’t be getting promoted.

        Think of it like this:
        10 = fired immediately. Sending externally and your career is done.
        8= ruin political footing simply leave the firm
        6= extremely dumb mistake you can recover from and is likely expected
        4 = bad mistake with a higher up who does not matter
        3 and below = irrelevant mistake that you shouldnt worry about simply don’t repeat it. Most fall in this category.

        Finally the mistake you mentioned again is likely a 5-7 range. We don’t know the magnitude. We used 7 as an assumption.

        7 = ruin political footing arena
        5 = someone that didn’t know about it finds out and it doesn’t impact the business at all.

        5 = MD will be annoyed but not care in about 6 months
        7= loss of trust if it damages his revenue line

      • Wall Street Playboys says

        Sounds good.

        Having a “panic attack” is honesty ridiculous. When has anyone ever profited from one? Never. When other people panic is when you make your money.

        Having a panic attack is acceptable until age 25 or so after that… You should realize a panic attack doesn’t help you produce good work and is a completely useless emotion.

        Panic = useless feeling that doesn’t help you. Similar to stress. Just do your best, solve the issue, move on.

      • loss says

        Thanks again for the further information.

        This has also made me realize how much young people blow mistakes/situations out of proportion. The junior will have a panic attack and think it is the end of the world, and then when higher ups find out they brush it off like nothing happened.

        Junior then realizes that all worry was a waste of time/health.

      • Wall Street Playboys says

        Correct.

        Unless it’s going to hurt the P&L or damage a relationship (politics or client)… No one is going to care.

        Now if you keep making the same mistake over and over again… Then you have a problem because you’re not learning and you’re wasting time.

        The stoicism book we recommend (approved products tab) is probably great for you to read over the weekend this month.

  22. 1111111 says

    Wondering what your guy’s thoughts on buying vs leasing a car is?

    I ran the 40 year projected difference in net worths given the opportunity cost of not investing the differece in lease vs financing vs pay cash. Leasing came out ahead, contrary to popular wisdom. This combined with not having to deal with repairs and the time savings of this is a pretty clear win to leasing.

    Do you guys agree?

  23. says

    It is stunning how many people do not understand that creating negative energy is almost NEVER worth it. EVER. Giving your ego a rest from time to time will do wonders for you in this regard.

  24. Dafydd says

    Might I add something about business losses?

    In the UK, there is generous tax relief for loss-making unincorporated businesses in their first years of trading.

    If you are starting a business in Britain, you should seriously think about putting off incorporation.

    From a tax point of view, it is only worth incorporating if you are making £40-£50K plus in profit in any case.

  25. YMoney says

    just deliberately came back to this post to find this advice

    “While we have highlighted the importance of an S-corp twice, here are some basic house keeping tips: 1) Once you clear ~$75-150K in income, get an accountant, 2) Keep every single receipt for your business, everything from that dinner bill to your cellphone bill… keep it *all*, 3) take 2-3 days out of the beginning of the year and read up on tax code changes. No exceptions to any of these three rules.

    thanks…

  26. Belgian BG says

    Going into finals I thought I had my belief systems under control this semester. First week of little sleep, stress, fear of failure, etc.. Everything OK.

    Second week was a bit harder, 3rd week even more but by the end of the month I felt depleted. Study effeciency: down the drain. Personal health: lost my gaines from during the year, ate way more crap than I should have.

    Working 14 hours a day once is easy but working 7 days in a row for 14 hours is a whole other level. Can’t even understand how some guys can to do this for months straight

    I thought I could just “adopt” these belief systems and work ethics. Turns out you actually have to work at it… Who would’ve thought haha?

    Well, I guess it’s a start that whenever my fear of failure and stress came up I actually realized I was thinking poorly this time.

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