What a busy week! Talk about record setting, we could barely even tweet except to troll. That’s when you know things are going well over here. Anyway. This post has been a long time coming and will give a good overview of how to transition in life. Not many people think about this particularly when they are younger. When you’re 10 years old you think you’re going to be a sports star or a movie star or something that is possible but highly unlikely from a percentages stand point. So we’ll explain how we make decisions over here from a high level. Can’t do much more than that as we don’t know your skills, talents or work ethic level.
The Beginning: At the beginning one of the smartest things a teenager can do is write out a tree digram. Everyone knows what this is. You have a starting point and then have two directions left and right… Then another left and right decision over and over again. You should do this with the primary three things that are of value at a young age: 1) intelligence, 2) your peers and 3) your obscure talents – athletics, music etc.
Once you do this your decision making process becomes clear and you’ll know when to quit outright and when to continue grinding away. As you get older the “branches” that are alive are the ones you focus on. Thinking like this is a good holistic overview of how to build up the right directions. It is quite literally no different than a tree/shrub. You clip certain fruits to make sure more nutrients go to the ones that are going to be bigger winners. If you allow all the fruits or flowers to blossom all you are left with is a bunch of tiny fruits and mediocre/bad looking flowers. Yes we purposely chose a gardening example since lots of people are doing this during the pandemic.
The first step is to figure out what type of intelligence you have. The link there explains how to do this. The unfortunate part is that you need to develop high self awareness at an early age. This is extremely difficult. People with high self awareness are typically better *improving* at things that are single player in nature. That would be golf, tennis, reading comprehension, single player video games, weight lifting etc. That does not mean they are bad in team environments, it means they are able to recognize their own flaws faster and adapt to those issues faster. In short? If you’re interested in improving your own self awareness you need to try new things (early and often) and *predict* the criticism you’ll get from an expert. If you’re able to figure out what is wrong with your design, your public speaking abilities, your coordination (billions of other examples)… you’re on the right path.
The second step is observational awareness. This is why it relates to peers while individual awareness relates to your intelligence. Observational awareness is something that most people are actually good at. They are a lot better at figuring out who is good at what and why. The problem? They don’t actually take actions on what they have learned. For example, you probably know the people in your peer group who are going to succeed. If you know this… why aren’t you moving your time preference in that direction. In college you can get a “feel” for who is going to make it. It’s *almost* never the person who is only studying and it’s *almost* never the guy with the 2.0 partying every single day (we excluded the rare 2.0 student who already started a business in his dorm room). Which leads us to the third step of obscure talents…
The third step is taking your obscure talents and seeing how much “value” you can get out of them. When you’re young it’s pretty easy to figure out how far the diagram goes out. If you’re one of the nations best baseball players, perhaps that’s legitimately an area to focus since you could make a ton. If you’re one of the top water polo players? Probably best to maximize it for a top college for free and stop there. This should be a basic decision for any rational person to make. The economies for both are quite different so you should keep this in mind. This applies to other obscure skills from cooking to musical instruments as well.
Now before we move on, we’re going to delete all ridiculous comments about “limiting beliefs” and “exceptions” to the rule. The initial framework is accurate and you’re going to have to make smart choices about where you spend your time. If you’re 6’ 6” tall but are able to run an 800M at incredible speeds you might be an exception (just like Usain Bolt, who is an exception to the standard 100M and 200M body type, he is taller and thinner when most are usually shorter but carry higher amounts of muscle). There are always exceptions to the rule and by pointing this out most people are really just grasping for straws. Even someone like Usain Bolt knew he could do it because the stop watch was showing him it was possible, he wasn’t coming in 50th place still trying for the gold medal. He was at/near the top *already* and bet on his body type being different.
The Next Stage: Now that we’ve established a general framework, you should have a lot of branches. These branches at least give you an idea of what you’re good at, making you more unique than you were before the beginning process was completed. Someone should be able to ask you what you’re good and bad at with unemotional responses. You’re better at XYZ tasks and worse at XYZ tasks. Most people don’t have this type of emotional and mental maturity to say “i’m not great at XYZ relative to XYZ” most normal people say they are solid/good at everything even though they are typically awful at it and simply enjoy it. Notice the wording here. You can improve at anything in the world, the question is if it is worth your time.
You’d think we’d tell you to specialize at this point. And. We wouldn’t.
Instead we’d write a list of the basics. The basics are: ability to sell, ability to correctly identify talent, ability to self evaluate and ability to either recognize or create good design (visual is ideal). Now why should you focus here first? The reason is that these are absolutely necessary in practically every avenue of life. Sales is for life long training. You sell yourself for careers, girls to be interested in you, convincing someone to buy/sell a home… etc. Time invested in learning sales is practically never wasted. Identifying talent, continuously self evaluating your skills and developing a knack for design will always come up in the future. If you go into real estate you have to learn how to fix/improve it, if you go into an online business you have to learn copy writing and design basics, if you want to make sure sales keep going up you also have to evaluate what you can personally fix and what you need to outsource. In short, the basics are 1) sales, 2) identifying talent, 3) self evaluation and 4) understanding of visual aesthetics.
After the beginning stage you already have an idea of what you’re good at anyway so there is no reason to specialize yet. Why? You have to be good enough at the fundamentals… to a point where it is not a detriment. Perhaps you’re better at sales and self evaluation but fail at identifying talent and have poor visual aesthetics. It is fine to be *naturally* better at some of the tasks… it is not fine to be incompetent at any of them. It is quite easy to get into the top 10% in anything (including the fundamentals) as it requires little talent and a lot of time. People are incredibly lazy and more interested in being entertained. So. There you have it. Stage two of decision making requires learning fundamentals no matter how much you hate it.
The Third Stage: Beginning of specialization. If you know all of the fundamentals (enough to be be seen as good by other people in these areas) it is time to specialize. You go back to the tree diagram which now has hundreds of branches. And. Many of them have officially hit their peak and no longer need to be looked at. When you take a look at all the branches you then ask “where do all of them intersect”.
At this point we turn back to a physical example as it’s easiest to understand. If you’re extremely fast but lack endurance maybe your best bet is to just go into sprints (swimming or running sprints). If you’re extremely coordinated with fast hands (terrible foot speed) it could be something as niche as ping pong. So on and so forth.
Now for the real money making part. You have to figure out *how* you’re going to compete. Are you going to compete based more on ability to recognize talent while you do the sales portion? Are you going to compete by personally creating the best product while spending tons to hire the best sales/marketing person? Have you created some sort of new production that puts you ahead of the curve? We can go on and on.
It gets better! The reason why life is a rigged game, is that you’ve officially reached the snowball point if you can specialize correctly. Once you have one successful venture you now have a blue print to recognizing issues in *other* companies. This is why we continue to laugh and brush off insane ideas. Example? Buying a random internet business while having no previous success.
The only way we can see this being a logical idea is if you’re willing to take a loss on the purchase. This still seems crazy as the logic of “learning faster” isn’t really accurate. If you start something from scratch since you built all of it you can then recognize all the errors. If you start with something that is half baked, you don’t know where the mistake was made *unless you’ve done it before*. By buying something without previous success you’re essentially trying to short cut the process… We all know what happens when short cuts are made. Lots of un-learning and re-doing.
The Fourth Stage: Generally speaking, most people don’t even get to the third stage. In the third stage, success breeds itself. You’re a millionaire. Some things will go bad (for example if you own some real estate chances are some of it is in the red due to the pandemic), similarly, when you dollar cost average into various investments a few are not going to go up. This is simple probabilities as it’s impossible to shoot 100% even if everyone on Twitter tells you it is possible. Anything above 70% is solid/incredible over the long term.
So what is the fourth stage? The fourth stage is longevity. Longevity is recognizing when you’re not going to have the same amount of energy/time. You have to do a few things: 1) sell, 2) delegate, 3) transition to lower impact.
Once again we’ll use a physical example. If you were an excellent football player, at age 45 you probably shouldn’t be getting hit in the head over and over again. This applies to things like boxing as well (Floyd Mayweather, the only risk free return, is the poster child here). Instead you have to transition into something else you can do that is enjoyable. Unfortunately, no matter how many drugs you take, at this time you cannot maintain your levels. This means you’re limited to several sports, golf, biking, swimming, water polo etc. (we don’t want to think of all of them). If you don’t transition you’re going to lose all the “left over benefits” of being in shape which is potentially millions of dollars of health care costs and higher quality of life (a huge benefit).
In terms of money we’ll steal a page from our life mentor (never met) Felix Dennis. When you’ve lost interest in a business you have to sell it. Even if you don’t get a perfect price, by exiting you’ll decrease your commitments and avoid future headaches as you focus on what you really do well. For the ones that you still enjoy… delegation is the best option. Why? You can quickly choose the right people to run it and if you’re still interested in it – haven’t sold it – fixing issues that arise will be fun for you. And. To wrap it up, going forward, you’re not going to try and hit it out of the park anymore. You try and hit singles and look at “lower impact” options to increase income. As usual, the goal is to focus on income generation and much less on investments as you should be living off of less than your annual returns at this point anyway.
The Fifth Stage: The fifth and final stage, is the transfer of all your work. Setting up a will/trust and making sure the money and assets go into the right hands. The right hands = where you think they should go. No one is allowed to tell you what to do with your money so simply send out the assets as you please. Not much to describe here as you’re nearing death (inevitable). As a fun note, perhaps we will come up with reverse aging technologies in the future. But. The point remains.
Summary: If you look at this in phases it’s essentially, trial and error, self reflection, mass accumulation, accumulation relative to time and finally giving it away. There are *always* exceptions to the rule. The framework is going to apply to some 99.5% of people. Perhaps the top 0.001% end up continuously working harder and never taking their foot off the gas. But. Again. This is the exception not the rule.
Using a tree diagram is something you could even add to your daily routine if you’d like. This is quite useful for someone who is under the age of 30 but can be done at any stage of life. What you do is physically write down what you did and where it falls on the tree diagram. You end up feeling quite disgusted with yourself if you have to constantly write down that you’re going in the wrong direction over and over and over again. Once the branches are moving in the right direction you’ll eventually find a good intersection point.
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