Would You Rather Be Sexy or Rich?
Hint: They’re not the same
Title idea stolen from I Will Teach You To Be Rich — Ramit Sethi
When you’re learning how to invest, pretty much every education source you find teaches you to diversify your investments. Except for one guy.
His street name is The Oracle of Omaha. His real name is Warren Buffett.
If you don’t know of Mr. Buffett, he’s the 4th richest man in the world. His holding company, Berkshire Hathaway, is the 5th largest company on the planet.
“Diversification is protection against ignorance. It makes little sense if you know what you are doing.” — Warren Buffett
That’s a harsh statement to most investment advisors who stand by portfolio diversification, but one look at Buffett’s track record and it’s hard to disagree with him.
If you invested $10,000 with Buffett in 1985, according to a CNBC article, by 2019 that investment would be $2.4 million. If you made the same investment in the S&P 500 you would only have $227,000.
Is there a secret to Buffett’s mega-success? Is he sacrificing virgins to win the stock-market God’s favor? It’s easy to think, “Well, Buffett is a genius, no one can do what he did.” You’re right. No one has done what he has. But he’s not the best investor in the world because he’s smarter than you or me.
Buffett proved it’s not his genius that made him successful In his article, The Superinvestors of Graham-and-Doddsville, where he walks through the similar success 10 other investors, just like him, have had. The only thing Buffett and these superinvestors have in common are the teachers who taught them.
Buffett’s success came from looking through commonly held illusions of his industry and focusing solely on his own performance.
Valuing performance (rich) over appearance (sexy) made Buffett one of the richest men in the world, and he is likely to stay on that list for the rest of his life.
So how can you implement Warren Buffett’s mentality and reach the pinnacle of your craft?
Don’t Let Quick Money Put You In a Box
Most of my friends from high-school chose their major by Googling their average salaries. Which means, they all went for engineering, finance, or computer science. To compete in those fields they need to go to a well-regarded school so the stress-induced ulcers started in high school.
They got exactly what they wanted, and now they’re looking for a way out. 4 years have passed and they still question their career path. The student loan payment at the end of each month is the only certainty that college gave them.
They didn’t go to college because they wanted the job their diploma would offer them. They went for social approval.
The desire for social approval makes most of our money decisions for us.
How can you create the life you want for yourself if you’re always a slave to debt? It’s hard enough to take a risk on yourself as it is. When you add growing monthly payments, it’s almost impossible.
College is not the only way we create financial constraints on ourselves, but it is a popular one. We also rack up credit card debt for things we don’t need, get loans to buy cars more expensive than necessary, and create spending habits that are hard to break.
Personal expenses are the number one reason entrepreneurs and creatives drop their dream and get a job they don’t want. In other words, keeping your personal expenses as low as possible is the best thing you can do to create better odds for yourself.
Patients and persistence are key to building the life you want. It’s hard to have both of those things when your financial runway is being eaten up by monthly payments.
Learn to Spot False Appearances
David and Goliath is the most popular story of bravery throughout all of history. But is it really about bravery?
Two nations at war decided to solve their conflict through one on one combat between their best fighters. This was a common practice to avoid costly battles.
Goliath steps forward, and his name says everything you need to know about him. Imagine Shaq wearing full body armor and a sword the length of your body. Beyond his size, he had a reputation for killing everybody who thought they could take him. The Israelites were paralyzed with fear. No one was stepping up to face him.
Finally, after a somewhat embarrassing amount of hesitation from the Israelites, a shepherd named David puts a rock in his sling, runs down the hill, and sends the rock flying at his head. Goliath died on impact.
Malcolm Gladwell explains in his book, David and Goliath, that slings were the preferred projectile weapon of the time. This was before bows and arrows became mainstream. Slingers used round rocks, the kind you would skip across a lake, as their ammo. Apparently, considering its size and the speed at which it’s thrown at a target, a rock coming from a master slinger, like David, had about the impact force of a bullet coming out of a hand-gun.
In other words, Goliath had a sword, and David just shot him. When you put it in those terms it seems more ruthless than it is brave.
The lesson here is David wasn’t afraid, like everybody else, because Goliath looked intimidating. He was able to look past that and see that no matter how big you are, you can’t survive a gunshot to the face.
It’s the same objectivity that Warren Buffett used to find and exploit generally accepted investing myths. He realized most people are driven by fear and emotion that clouds their perception. He wasn’t going to indulge in the fear-based investing of the general public. His decision to stay in Omaha Nebraska speaks to his desire not to be influenced by the general public.
If you want to be able to see what others can’t and take advantage of it for yourself, you have to make a habit of questioning commonly held assumptions and putting them to the test.
Become a Craftsmen
How many people you know seem like they’re just going through the motions in life? The weekend-warriors. They never like their job. Even if it’s the job they wanted. They show up to work and can’t wait for it to be over. Despite their lack of enthusiasm, they expect raises and promotions because they’re entitled to it.
Most people are these weekend-warriors. I realized this when the founder of the marketing agency I was working for said to me on a coaching call, “Adam. You’re already probably in the top 10% of marketers in the world, for the simple reason that 90% of people aren’t even trying to improve.” (paraphrasing)
Hearing that didn’t help my ego, but it did teach me an important lesson. To be better than most people in your field, you just have to want to improve. Because most people don’t care to. They want the result without the work, and it shows.
Do whatever you’re doing to the best of your ability, with the intention of getting better every time you do it. And then, commit to doing it extremely often. That is what it means to be a craftsman. (Read Outliers for 335 pages of this)
This doesn’t mean you can only do one craft for the rest of your life. You should take this craftsmen mentality to everything you do. Your job, side-hustle, hobby, sport, and just-for-fun projects.
What you shouldn’t do is half-ass anything, because there is someone out there, full-assing it, that deserves what you want more than you do.
Study The Work of Anomalies
It used to be that the star players in the NBA were centers. The biggest players in the middle of the paint. They were the most sought after positions on the court. Then, Michael Jordan came to the league and everything changed.
From the forward position, Jordan quickly started breaking records, winning games, and gaining national recognition usually reserved for centers. He was an anomaly in the NBA.
Then came Kobe Bryant (RIP). Within Kobe’s first years it became clear that he was the next Jordan. There were national debates about it. Bulls fans were trashing Lakers fans about their star being better, and vice versa.
In The Last Dance, a Netflix Docu-series about Jordan’s career, they interviewed Kobe and asked him what he thought about the ‘who would win in a one-on-one’ debate.
His response was a window into Kobe’s success.
“I truly hate having discussions about who would beat who one on one… Yo! What you get from me, is from him.” — Kobe Bryant
Kobe realized that Jordan was onto something different. Jordan had a different way of playing the game, and a different attitude on and off the court. He adopted Jordan’s persona for himself.
Sure, it caused a lot of people to view Kobe as an unoriginal copy-cat, but he didn’t care. He was beating everyone, and that’s all that really matters.
You can say the same for Warren Buffett. When everyone believed investing in stocks was a gamble at best, he found a teacher named Paul Graham who was consistently performing above everybody else. He followed Graham’s teaching even though everybody else, even smart successful people, disagreed fundamentally with his investment philosophy.
In every field, there are people who dramatically outperform the rest. They may not be easy to find, but they are there. Look for these anomalies to learn from. It will give you the edge you need to win in a competitive field.
So…. Sexy? or Rich?
When you say you want to be rich, do you really want to be rich? Or do you just want the appearance of being rich? Do you want to make money? Or do you just want to spend it?
Every tip in this article asks you to go against the grain of common thought. It requires that you worry less about social currency and focus on objective results.
Our natural state is to be agreeable. To fit in with our clan, community, and culture. So we tend to believe what they believe. But an anomaly or outlier, by definition, doesn’t fit in.