Zero to One by Peter Thiel

Notes on Startups, or how to build a future

It is easier to copy than to make something new. However, fresh creation is always more powerful. Best practices will die out after a while. Technology allows one to work miracles. Try out businesses in formulas and find value in unexpected places. Some of the concepts taught here are based off the course about start-ups in 2012 conducted by the same author.

‘Most people believe in x, but the truth is the opposite of x’. What can x be? There are two types of progress, horizontal or vertical. Horizontal is from going from 1 to n, while vertical is from 0 to 1. China is largely going for horizontal progress by copying. Technology allows for vertical progress. Technology matters more than globalization does. The development has stopped somewhere in the late 1960s and we need to kick start it again. Start-ups tend to produce new technologies. Big organizations are slowed by hierarchy. ‘Question received ideas and re-think business from scratch’.

Behind a popular belief is a contrarian truth. Question what you know about the past. The mid 1990s were bad for the world and the major nations were in recession. Internet changed everything. Netscape and Yahoo went IPO during this period. However, tech investors were too exuberant and this led to a bubble being formed. In 1998, the financial crisis hit. The dot-com mania lasted from Sept 1998 to Mar 2000. Everyone was too optimistic over IT businesses and I started to get wary. Paypal decided to send and receive payments over email. We took a small fee on their transactions and even paid for new joiners. The market crashed right after year 2000. Thankfully, Paypal managed to receive sufficient funding before that. There are 4 key lessons from the crash. They are 1) Make incremental advances; 2) Stay lean and flexible; 3) Improve on the competition; 4) Focus on product, not sales. But the opposite of them might be true as well. 1) Better to risk boldness than triviality; 2) A bad plan is better than no plan; 3) Competitive markets destroy profits; 4) Sales matter as much as product. Learn to think for yourself.

You need to create and then capture value. The airline industry is in a perfect competition industry. Google is an example of a monopoly. Learn to innovate yourself to the top. This shows that differentiation is very important. Monopolies will lie and deny that they are one so as to avoid facing more competition. Non-monopolists like to claim they are very powerful. Do not underestimate the scale of competition. They tend to define themselves as the intersection between smaller markets. Monopolies are bad for the public if there are no technological changes. Some monopolies are good because they offer more to people out there. Monopolies drive innovation because they have the financial resources to innovate further. It is a condition of every successful business.

‘All happy families are alike, each unhappy family is unhappy in its own way.’ Leo Tolstoy (Anna Karenina)

Start a creative monopoly and have products that will benefit others. Competition is an ideology that we all preach. We were brought up that way in schools. I was glad that I didn’t enter law as I would not have been able to create anything new. Karl Marx believed people compete because they are different. To Shakespeare, people bought because they were too similar. Many people like to only focus on their rivals. War is costly, just look at Microsoft vs Google. Be less sensitive to social cues. Don’t lose sight of the big picture. Sometimes, if you can’t beat your opponent, merge with them. When you have to fight, you have to fight and win. Use a clear head to build a monopoly business.

Twitter is valued more highly than New York Times despite the latter being more profitable. This is because the FCFF for Twitter is expected to be higher in the future as compared to NYT. The newspaper is also a sunset industry. LinkedIn and Paypal are companies that will only grow quickly many years into the future and profitability will be low at the beginning. Many people are only concerned with short-term profitability. Most monopolies share the following characteristics: 1) proprietary technology; 2) network effects; 3) economics of scale; 4) branding. PT is great because it makes your business hard to replicate. You should be 10 times better than the next substitute. It is easier to invent something new. Another way is to improve an existing solution. Network effects are when your product is more useful when others use it. You can achieve economies of scale to sell software, as the incremental cost is almost zero. Substance first before branding will work. Start with a very small market and dominate it. Do not be ambitious and try to capture everyone’s attention. Scale up into slightly bigger markets once you have some success. Do not disrupt, like how mobile devices will eventually replace PCs. Disruption is actually facing the competition but using technology to triumph. The last mover will win. He will have the last laugh.

The most successful companies make the core progression – to first dominate a specific niche and then scale to adjacent markets – a part of their founding narrative. – Peter Theil

Does success come from skill or luck? Can you control your future? There are two sides to this. One is that people hoard CCAs and then don’t know what they want to do in life. The other is when people know what they want and they go all out for it. Therefore, there are 4 views, ‘Optimistic-Definite’, ‘Optimistic-Indefinite’,’Pessimistic-Definite’,’Pessimistic-Indefinite’. PI is when you expect a bleak future but don’t know what to do about it. PD is when you know your future is bleak, but you will prepare for it. This is China. OD is when you believe the future will be brighter than the present if you work hard. OI is when you feel finance will eclipse engineering as the way to approach the future. OIs do not plan much. OIs re-arrange already invented stuff. Our future calls for more bankers and lawyers. This does not bode well for ODs. Indefinite finance is when people pass money down the chain and no one actually is value-adding in the process. Modern politicians are concerned with how they are thought at the moment. People like to think short-term. Modern philosophers are mostly optimistic. Rawls and Nozick didn’t have any vision for the future. In general, the above shows that we defer plans for a brighter future. Indefinite-life. The progress for biotech firms is lot slower than software startups because it is much more costly to develop anything. The author is pushing for more people to plan for their futures and follow the OD method. Apple has taught one that through design and careful planning, you can be successful. A business with a good plan tends to be under-rated and under-appreciated. Humans and businesses need to have a definite future. You are not a lottery ticket.

Never underestimate exponential growth. We live in a power law. Venture Capitalists follow a J curve because if they get a hit, the growth will grow exponentially. The solution for VCs would be to focus on single-minded pursuit of a few companies rather than keep diversifying. The advice the author gives is to focus and invest in a particular career or business. Don’t keep diversifying. Think about your power law and do not simply just start a business without thinking about it first.

It does matter what you do. You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future. – Peter Thiel

The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined. – Peter Thiel

Conventions are easy, secrets are hard. Mysteries are impossible to understand. How do you find secrets then? Kaczynski believed that the world’s hard problem were already solved, so he targeted institutions and wanted to destroy them so as to reset the tough problems. He was a little crazy. These are also how fundamentalists think. In terms of geography, men has explored most of the Earth already. Incrementalism means we only do what we have to do in order to claim credit. The next is risk aversion. They are scared of being wrong. People are complacent because secret finding is outside your comfort zone. The last is the belief that the world is flat and that someone else would have discovered it first. Hidden injustices are also considered secrets. HP is an example of a fallen company who failed to keep up with innovations. You need to believe in secrets in order to even want to work at them. There are two kinds of secrets, secrets of nature and secrets of people. You should look in a field where there has been less research being conducted in, like nutrition. Usually, it isn’t wise to tell people the secrets you know. Take the hidden paths.

‘A start-up messed up at its foundations cannot be fixed.’ The author cites the US as an example of getting the foundations right with the Bill of Rights, the constitution etc. Founders should shall the same pre-history together. They must complement each other. In business, it is very difficult to grow without a team in place. You need a good structure to manage people. Think about the concepts of ownership, possession and control. Often in big companies, misalignment might be present and you have to watch out for it. A board size of 3 is ideal. A large board doesn’t provide adequate oversight. Only hire full-time employees as they will be the most committed ones. Employees need to be properly compensated. A CEO of a start-up who pays himself too well will not be incentivised to work hard for the company. A humble and frugal CEO deserves more respect. Start-ups can offer part ownership of the company to attract people. However, the proper allocation is important and you do not want to seem unfair. Keep the allocation a secret and do not share this with other employees so as to avoid resentment. Develop a culture of innovation.

Work should be able getting to know your colleagues better and to connect to them on a personal level too. Work should not just be able to make money. The bunch of us at PayPal was known as the PayPal Mafia because we were all very close. You need to make a strong statement in order to hire a talented person. You also need to explain how your culture can fit his personality. You need to promise your new hire that he can do work here which he can find nowhere else. ‘From the outside, everyone in your company should be different in the same way.’ We need new hires to be equally obsessed about the company’s mission. Make everyone responsible for doing one thing. Well-defined roles help to reduce conflict. You are not going to learn from consultants. It is better to be known as a cult.

Distribution of products is the key because it is important even if you build something, you need to market it. Advertising works even if you’re sceptical of it. It works because it plays on human behaviour and psychology. Engineers hate sales people because they think that sales is ‘changing surface appearances without changing the underlying reality.’ All salesmen use persuasion. Sales work when it is hidden. Superior sales distribution can help to create a monopoly too. The customer lifetime value must exceed the customer acquisition cost. Do not attempt to compete with the big boys in marketing ad campaigns when you’re a start-up. One working distribution channel beats all others which have been attempted but failed. A company also needs a good public relation strategy to get the media’ buy-in. Everybody has a product to sell. If you don’t see any salesperson around, you’re the one

It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business – no matter how good the product. – Peter Thiel

Computers are very powerful and can replace many human tasks. The correct approach is to think that computers are complements for humans. Use them to empower people. Globalization means substitution. Computers are good at data processing while humans are good at making sense of things. Computers are tools. They also don’t require many resources, just electricity. Paypal used the computer to flag out suspicious transactions and then humans would screen it again to make sure they were truly fraudulent. NSA uses computers mainly while CIA uses humans mainly. Palantir aims to marry the two. LinkedIn was successful because they didn’t try to write software that would replace recruiters. Amazon and Google both use ‘machine learning’ and feed the machine with a lot of information, run the algorithm and then produce the result. Computers are good at finding patterns but find it difficult to compare data between two different sources. Humans should still develop their own plans because computers are not going to replace us anytime soon.

Why did we get a cleantech bubble? Why did it fail? It failed to answer one of the following 7 questions: 1) The Engineering Question; 2) The Timing Question; 3) The monopoly question; 4) The People Question; 5) The Distribution Question; 6) The Durability Question; 7) The Secret Question. Cleantech products do not offer 10x improvements, and maybe only 2x because it is not so efficient. Timing matters a lot too. The cleantech industry was filled with many small competitors thinking they all had the edge. Define your market correctly and not too small such that you will think you have a large share and hence should be the monopoly. Be wary of those executives who dress very well during sales presentations. Cleantech companies failed to predict competition from low-cost China and could do nothing about it. They all had the same secrets. Social entrepreneurs fail because they can do neither the profit part or social part well. Tesla is an example of a successful cleantech company. They also made the brand fashionable. Once too many have the same idea, a bubble will be formed. The challenge is to start thinking small again.

What character traits matter in a founder? Most people fall in the middle of the curve and are at neither extreme. Founders usually display unusual traits at the beginning and at the end too. Richard Branson is an example of a natural entrepreneur that is unusual. They become insiders and then outsiders again very quickly. Lady Gaga isn’t normal. Founders are like scapegoats, they are extreme and contradictory figures. The author highlights examples like Bill Gates, Steve Jobs etc that are very controversial and unusual. We all need founders and sometimes, it is good that they are strange. Don’t overestimate your power as an individual.

Life quotes 151 to 200

151. ‘The only advice I can give for potential writers: Don’t make stuff because you want to make money, it will never make you enough money. Don’t make stuff because you want to get famous, because you will never feel famous enough. Make gifts for people and work hard on making those gifts in the hope that those people will notice. Maybe they will notice how hard you worked…and maybe they won’t. And if they don’t notice…I know it’s frustrating…but ultimately, that doesn’t change anything because your responsibility is not to the people you’re making the gift for but the gift itself.’ John Green

152. ‘Nature loves courage. You make the commitment, and that nature will respond to that commitment by removing impossible obstacles. Dream that impossible dream and the world will not grind you under. It will lift you up. This is the trick. This is what all the teachers and philosophers who really counted, who really touched the alchemical gold…this is what they understood. This is the shamanic dance in the waterfall. This is how magic is done. It’s done by hurling yourself in the abyss and discovering it’s a feather bed.’ Terence McKenna

153. ‘I am graduating. I should look at this as a positive experience, especially being at the top of my class. However, in retrospect, I cannot say that I am any more intelligent than my peers. I can attest that I am only the best at doing what I am told and working the system. Yet, here I stand, and I am supposed to be proud that I have completed this period of indoctrination. I will leave in the fall to go on to the next phase expected of me, in order to receive a paper document that certifies that I am capable of work. But I contest that I am a human being, a thinker, an adventurer – not a worker. A worker is someone who is trapped within repetition. A slave of the system set up before him. But now, I have successfully shown that I was the best slave. I did what I was told to the extreme. While others sat in class and doodled to later become great artists, I sat in class to take notes and become a great test-taker. While others would come to class without their homework done because they were reading about an interest of theirs, I never missed an assignment. While others were creating music and lyrics, I decided to do extra credit, even though I never needed it. I wonder, why did I even what this position. Sure, I earned it, but what will come of it? When I leave educational institutionalism, will I be successful? Or forever lost? I have no clue about what I want to do with my life. I have no interests because I saw every subject of study as work, and I excelled at every subject just for the purpose of excelling, not learning. And quite frankly, I am scared.’ Erica Goldson

154. ‘Life is not easy for any of us. But what of that? We must have perseverance and above all confidence in ourselves. We must believe that we are gifted for something and that thing must be attained.’ Marie Curie

155. ‘Ultimately, we all have to decide for ourselves what constitutes failure. But the world is quite eager to give you a set of criteria if you let it. Life is difficult, and complicated, and beyond anyone’s total control and the humility to know that will enable you to survive its vicissitudes. I am not going to stand here and tell you that failure is fun. That period (writing Harry Potter) of my life was a dark one. I had no idea how far the tunnel extended. For a long time, any light at the end of it was a hope rather than a reality. You might never fail on the scale I did but some failure in life is inevitable. It is impossible to live without failing at something unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default. Failure gave me an inner security that I had never attained by passing examinations. Failure taught me things about myself that I could have learned no other way. Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was and began to direct all my energy into finishing the only work that mattered to me. The knowledge that you have emerged wiser and stronger from setbacks means that you are, ever after, secure in your ability to survive. You will never truly know yourself or the strength of your relationships until both have been tested by adversity. Such knowledge is a true gift for all that it is painfully won and it has been worth more than any qualification I ever earned.’ J.K. Rowling

156. ‘I find that having a job is one of the best things in the world that could happen to me. It introduces discipline and regularity into one’s life.’ Wallace Steven

157. ”It’s not because they (young adults in HK) need to think about their food or their way to live. It is something about society’s expectations. They need to achieve so many things.’ Raymond Sze, on why people play reality escape and puzzle games

158. ‘Although Hong Kong is one of the wealthiest cities in Asia, its success has made life difficult for many young people, who struggle to land high-paying jobs to get their foot on the property ladder.’ Juliana Liu

159. “You might think: ‘I’ll cut back on sleep during the week and then make up for it at the weekend.’ Unfortunately it doesn’t work like that, because memories need to be consolidated within 24 hours of being formed.” Michael Mosley

160. ‘If anything I hope that if people, if anybody manages to see me fight… hopefully they’ll understand that it doesn’t matter who you are: male, female, Asian, non Asian – you can do things that you want to. Just because there’s a societal stereotype in a certain area or region, [should I] try to fit myself into it? If you want to try something new in your life, why not?’ Sherilyn Lim

161. ‘I believe we have an obligation to read for pleasure, in private and in public places. If we read for pleasure, if others see us reading, then we learn, we exercise our imaginations. We show others that reading is a good thing.’ Neil Gaiman

162. ‘We have an obligation to make things beautiful. Not to leave the world uglier than we found it, not to empty the oceans, not to leave our problems for the next generation. We have an obligation to clean up after ourselves, and not leave our children with a world we’ve shortsightedly messed up, shortchanged, and crippled.’ Neil Gaiman

163. ‘We have an obligation to imagine. It is easy to pretend that nobody can change anything, that we are in a world in which society is huge and the individual is less than nothing: an atom in a wall, a grain of rice in a rice field. But the truth is, individuals change their world over and over, individuals make the future, and they do it by imagining that things can be different.’ Neil Gaiman

164. ‘If you want your children to be intelligent, read them fairy tales. If you want them to be more intelligent, read them more fairy tales.’ Albert Einstein

165. ‘You can’t predict it all. People will tell you to plan things out as best as you can. They will tell you to focus. They will tell you to follow your dreams. They will all be right.’ Elizabeth Warren

166. “Never be so faithful to your plan that you are unwilling to consider the unexpected. Never be so faithful to your plan that you are unwilling to entertain the improbable opportunity that comes looking for you. And never be so faithful to your plan that when you hit a bump in the road -– or when the bumps hit you -– you don’t have the fortitude, grace and resiliency to rethink and regroup.” Elizabeth Warren

167. ‘If you want to play chess, you need to play it with the master, because that’s the only way you learn.’ Old Chinese Saying

168. ‘No job is more important than parenting, yet no one is suggesting parents go off for a university course to qualify as a parent. Parents pick it up as they go along, and that’s exactly the way great teachers are forged.’ Anthony Seldon

169. ‘What is the teacher X factor? It is simple: passion and intellect, heart and head, love of subject and love of children. Selfless compassion and tireless energy are not enough, however. Successful applicants need deep subject knowledge and the ability to communicate in ways that will inspire the young to want to learn.’ Anthony Seldon

170. ‘When I first joined EDB, many colleagues asked why I was willing to settle for lesser pay. The thing is, I have found that Vitamin M (money) isn’t my only consideration. From an early age, my father taught me the importance of pursuing honour over wealth. Although it took a while, I have discovered what motivates me, what is passion and conviction.’ Low Yen Ling

171. ‘Character must be valued over reputation. Someone once told me that reputation is what you are when someone is looking at you. Character is what you are when people aren’t looking at you. If you are who you are, then you don’t have to worry about your reputation.’ Low Yen Ling

172. ‘There’s a phrase in Judaism, tikkun olam, which means “repairing the world.” The concept is that people shouldn’t do something simply because the religion requires it but rather because it makes things – something, anything – a little better.’ Mike Mayo

173. ‘I have something that he’ll never have: enough.’ Paul Volker (ex-Federal Reserve chairman), on hearing a young hedge fund manager brag about how much he earns

174. ‘There are moments in our lives when we summon the courage to make choices that go against reason, against common sense and the wise counsel of people we trust.’ Howard Schultz

175. ‘When women asked to rate what characteristics are most important to them for a suitable partner, women are most likely to list: considerate, honest, understanding, loyal and interesting to talk to. Whereas men say they prefer women who are physically attractive, good looking, and frugal.’ Alexandra Sifferlin

176. “One ship drives east and another drives west with the selfsame winds that blow. ‘Tis the set of the sails and not the gales which tells us the way to go. Like the winds of the sea are the ways of fate as we voyage along through life. ‘Tis the set of the soul that decides its goal. And not the calm or the strife.” Ella Wheeler Wilcox

177. ‘Like what I said, change is the only constant in your life and I hope you could grasp the impending change in your life with gusto and with fearless determination. Life is a journey of constant change…’ Audit Manager

178. ‘Santa Claus has the right idea. Visit people only once a year.’ Victor Borge

179. ‘Christmas gift suggestions: To your enemies, forgiveness. To an opponent, tolerance. To a friend, your heart. To a customer, service. To all, charity. To every child, a good example. To yourself, respect.’ Oren Arnol

180. ‘Why is Christmas just like a day at the office? You do all the work and the fat guy with the suit gets all the credit.’ Anonymous

181. ‘When one door closes, another opens. But often we look so long at the closed door that we do not see the one that has been opened for us.’ Helen Keller

182. ‘If you know you want to read a book, then get the book out and have it set aside and make plans to read it. Say it’s going to be at 1. When that starts, get on it. Don’t wait until that afternoon, then think — could I read? Or listen to some music? Or take a walk? Then you’ll sit about wasting an hour of what little time you have figuring out what to do with the rest of it.’ Mike Huckabee

183. ‘All the woulda-coulda-shoulda layin’ in the sun talking ‘bout the things they woulda-coulda-shoulda done. But all those woulda-coulda-shouldas all ran away and hid from one little did.’ Shel Silverstein

184. ‘Around the corner, I have a friend in this great city that has no end. Yet the days go by and weeks rush on and before I know it a year is gone. And I never see my old friend’s face for life is a swift and terrible race. He knows I like him just as well as in the days when I rang his bell. And he rang mine…but we were younger then. And now we are busy, tired men. Tired of playing a foolish game. Tired of trying to make a name. Tomorrow, I will call on Jim. Just to show I am thinking of him. But tomorrow comes and tomorrow goes and distance between us grows and grows. Around the corner, yet miles away. Here’s a telegram sir. Jim died today. And that’s what we get and deserve in the end. Around the corner, a vanished friend.’ Charles Hanson Towne

185. ‘I saw my life branching out before me like the green fig tree in the story. From the tip of every branch, like a fat purple fig, a wonderful future beckoned and winked. One fig was a husband and a happy home and children. Another fig was a famous poet. Another fig was a brilliant professor. Another fig was Ee Gee, the amazing editor. Another fig was Europe and Africa and South America. Another fig was Constantin and Socrates and Attila and a pack of other lovers with queer names and offbeat professions. Another fig was an Olympic champion and beyond and above these figs were many more figs which I couldn’t really make out. I saw myself sitting in the crotch of this fig tree, starving to death, just because I couldn’t make up my mind which of the figs I would choose. I wanted each and every one of them, but choosing one meant losing all the rest. And, as I sat there, unable to decide the figs began to wrinkle and go black and one by one they plopped to the ground at my feet.’ Sylvia Plath (attempted suicide)

186. ‘It’s the mindset the media has that every 18-year-old goes out and gets drunk. Maybe people in the previous generation did. But nowadays, most people would go out to hang out.’ Liam Brooks

187. ‘I wanted no part of politics. And I wasn’t in Berlin to compete against one athlete. The purpose of the Olympics, anyway, was to do your best. The struggles within yourself. The invisible, inevitable battles inside all of us that’s where it’s at. The only victory that counts is the one over yourself.’ Jesse Owens

188. ‘To see the world, things dangerous to come to, to see behind walls, draw closer, to find each other, and to feel. That is the purpose of life.’ Walter Mitty (The secret life of Walter Mitty)

189. 祝大家团圆快乐，在外的打工仔们要好好珍惜在家享受天伦之乐的时间.充好电再冲刺，创事业另一个高峰. Happy CNY in advance

190. ‘I wish you could see what I can see. Sometimes, you have to get up really high to understand how small you are.’ Felix Baumgartner

191. ‘In the 1970s, the then-famous actor George Sanders shocked the world when he killed himself and left a suicide note that explained, “…I am bored.”‘ Lauren Zander, on why it important to fill your time meaningfully with activities. Bored to death

192. ‘When I meet people in different parts of the world, I am always reminded that we are all basically alike. We are all human beings. Maybe we have different clothes…our skin is of a different colour…or we speak different languages. That is on the surface. But basically, we are the same human beings. That is what binds us to each other. That is what makes it possible for us to understand each other and to develop friendship and closeness.’ Tenzin Gyatso, 14th Dalai Lama

193. ‘80% of finding someone comes down to being your most attractive self, which – like so much in life – just means putting your time in the right places. If you’re exercising, socialising, well nourished and growing in your career, you will radiate attraction automatically. The remaining 20% is simply putting yourself in places where you can meet the right people.’ Oliver Emberton

194. ‘All players die after about 29,000 days, or 80 years. If your stats and skills are good, you might last a little longer. There is no cheat code to extend this.’ Oliver Emberton

195. ‘This is why playing hard to get can be a successful strategy in the game of love. If you put an obstacle in the way of someone you like and they keep on working at it, you’re bound to make that person value you even more. On the other hand, if you drive the person to extremes and persist in rejecting them, don’t count on staying ‘just friends’. Dan Ariely (The Upside of Irrationality)

196. ‘You are under arrest, you have the right to remain silent. Anything you say may be used against you in a court of law. You have the right to an attorney. If you cannot afford an attorney, one will be provided for you.’ RoboCop (2014)

197. ‘You can’t really define what you’re looking for in a guy or girl if you haven’t spent time getting to know them. Each date gives you a better understanding of the complexity of your taste. Dating is simply trial and error. And if you don’t try, that will be the biggest error of all.’ Paul Angone

198. ‘College is learning all the techniques and theories on how to dive. Graduation is stepping up to the edge and taking the plunge. The rest of your life is spent learning how to swim.’ Paul Angone

199. ‘Dreams aren’t crushed by a lack of opportunity. Or money. Dreams are silently assassinated by distraction and wishful thinking. Most people stop dreaming before they even given themselves the time and permission to start.’ Paul Angone

200. ‘This is something that evolutionary psychologists and biologists do recognise. We know that across a whole range of behaviours women tend to take fewer risks. They relate this to the fact that making mistakes are much more costly for women than for men because of childbearing. So obviously if you make a mistake in dating the wrong man and having a relationship with the wrong man, you might have nine months carrying a child, then caring for a child. While for men, the costs are lower.’ Michele Belot

The Underachiever’s Manifesto by Ray Bennett

The Guide to Accomplishing Little and Feeling Great

Underachievement are lost in pressure of success. We are all wired to strive for success. Always give your best or give 110%. What if it takes a toll on your personal life? This book will teach you to maximize happiness. It will teach you how to be happy even when you’re not achieving results or not giving your best.

Achievement is a dangerous addict. Mediocrity is the key to happiness. You are only 1 soul out of 6 billion and no other cares about your achievements. How you are doesn’t matter to anyone else. Think globally; underachieve locally. Even your friends might want to compete with your success. It might even harm them.

Your happiness is tied in relation to those around you and is not absolute. If you move to the third country, you will feel good about your salary. Striving is suffering. We always compete with those better than us. From young, we thought that achievement was our friend. Even if you are better than your friends in golf, you won’t be the next Tiger Woods. We always want to feel superior and this becomes an addiction. All these achievements may leave behind failed relationships etc. It’s like a disease. Achievement is an addiction. One needs to retrain their mind and soul.

The Ten Principles of Underachievement. 1) Life’s too short; 2) Control is an illusion; 3) Expectations lead to misery; 4) Great expectations lead to great misery; 5) Achievement creates expectations; 6) The law of diminishing returns applies everywhere; 7) Perfect is the enemy of good; 8) The tallest blade of grass is the surest to be cut; 9) Accomplishment is in the eye of the beholder; 10) The 4% Value-added principle. 1. Life is short. You can either relax or work hard. You choose. 2. Control is an illusion. Not everything is in your control. Your genes and place of birth have bearing on your success in life. If you don’t have those, it’s not your fault. 3. Expectations lead to misery. Treat a wedding like a party more than a play. Setting high goals leads to disappointment. 4. Great expectations lead to great misery. Same as above. 5. Achievement creates expectations. Companies’ stock get hammered if they can’t meet earning expectations. 6. Law of diminishing returns. Material items bring short term success. Is a $100 bottle of wine 10 times better than a $10 one? Benefits accrue at different rates. If you visit 10 temples in a day, you will forget the first 6. . 7. Perfect is the enemy of good. It is subjective. Good enough is good enough.. 8. The tallest blade of grass is the surest to be cut. Fly under the radar. Success will lead to envy and resentment. 9. Accomplishment is in the eye of the beholder. Who cares about your achievements even if you boast about them? If it’s worth doing, it’s worth doing half-assed. 10. The 4% Value-Added Principle. We are 96% similar to chimpanzees, whether you’re successful or not. Being alive is your greatest achievement.

Too much achievement is dangerous. People like to scramble to take credit for their achievements. Sometimes, the culture is to defend your turf. Underachievers can just complete the work without a lot of complaining. You can accomplish more if you don’t aim for perfection. If you can’t get super rich, then don’t work so hard. Going the Extra Mile Leads to Exhaustion. As you become more successful, it will be harder for you to compete with those people at the top. With more time, you can take up more hobbies. Conversation is a lost art now. Speed dating is for over-achievers. Ugly people can have good sex too. You must settle for someone that less than perfect as a partner eventually. Do not expect too much from your spouse.

For example, if you’re going to spend weekends at work all the time, you’d better be making wheelbarrows full of money to compensate for all the time you’re not spending with your friends and family. Face the facts: you’re probably not going to be a millionaire, so why kill yourself? Go home and spend a lazy weekend with your kids. – Ray Bennett

It’s a safe bet that if you go all out and spend lavishly on your lover’s birthday, the same will be expected the following year. If you don’t pony up the big bucks again, you’ll have some explaining to do, and it won’t be pretty. It’s probably also a bad idea to be in a relationship with someone who expects you to keep upping the ante. – Ray Bennett

After a few weeks of responses like “I’d love to, but I have an important project to finish. Call me next week,” you’ll find your friends won’t bother calling anymore. – Ray Bennett

Don’t stick to a strict diet regime and spend a lot of money on clean foods. Consume in moderation. Don’t kill yourself over sticking to a strict diet.

Intense physical activity might actually shorten your life. No pain, no gain = no brain. Those bulking up are actually doing so to make up for shortcoming elsewhere in their live. Do not around yourself with very fit people or fitness books. Underachievers can walk and exercise their upper body. Do some stretching and sleep a lot.

Money’s great but it is worth working super long hours for it? Everyone is chasing for undervalued stocks and this led to a stock market bubbles and crashes. Index funds are more successful than actively managed stocks. Underachiever don’t have to invest to impress. What you have/what you want. Enjoy the peace of mind and not buy growth stocks.

Underachievement promotes healthier relationships. Don’t stress your children out by sending them for too many classes. The family that underachieves together stays together. You can find the balance to family harmony.

Religion might be linked to war, hatred, intolerance among other faiths etc. The problem is caused by the overachievers. They might feel one God is more superior as compared to another. In this sense, faith becomes an achievement. Some people only want others to subscribe to their world view of things.

The Big Win by Stephen L. Weiss

Learning from the Legends to Become a More Successful Investor

The great investors often talk about their mistakes and learn from them. This book features many different asset classes. Investment techniques can be applied to other classes of assets. 1) Renne Haugerud, 2) R Donahue Peebles, 3) Martin Whitman, 4) Chuck Royce, 5) Jim Rogers, 6) Jim Chanos, 7) Lee Ainslie and 8) Alfred Taubman

In addition, writing this book will allow the author to meet and discuss with great investors. Portfolio manager’s results are not publicly available. Most investment managers actually perform worse than the stock market indices. Alfred was good at mathematics and he invented the modern enclosed mall. He was extremely detailed and sharp. Jim Rogers initially partnered with George Soros on Quantum funds. After a while, he started out on his own. For Jim, investing is a way of life and one can explore need socioeconomic behaviour. Jim is also an extremely humble man. The next was Marty Whitman. The only woman included was Renee Haugerud. Lee Ainslie (he) was known for hedge funds management. Don Peebles was like an agent on behalf of the bank, dealing with property and real estate. Jim Chanos was essentially a very good short seller. Chuck Royce is an expert at small cap stocks which will grow. What makes a great investor? No emotion – Cool, calm and confident. No ego – Self confidence, yes. Ego, no. Long term investors. Discipline – Stick to one style or investment strategy. Thorough research process – Do your own research and don’t buy anything you don’t know. Passion and work ethic – Everyone must work hard. Drive – Wealth is not the sole driving factor. Drive. Passion. Process. Equanimity. Discipline. Humility.

Whale Watching means following well known investors like Warren Buffett. However, blind following is foolish as even the legends fall sometimes. The author started off at the equity trading desk of Oppenheimer and Co. He wanted to try research sales. Eventually he landed himself that role. Everything seemed good till he managed the account DG partners. Although he recommended the good stocks to them, DG partners chose the wrong time to enter and exit the market and were too short term. As a result, they lost money. However, when buying stocks, one needs to consider factors like weight of each position, holding period etc. Modern investors are not as patient as the pros and will panic when the companies’ earnings take a hit. Sometimes, professionals have a sum set aside for speculation. If an unfortunate individual follows, one could get burnt. Preservation of capital is very important.

Renne Haugerud has a 14 year old hedge fund, Galtere Ltd. She is one of the rare females in the fund management industry. She wants to demonstrate that women are good traders. Her dad was a farmer and an amateur pilot. Renee was impressed with corn futures and the fact that she could own them without owning physical corn. She understood what it meant as a young age. She had a short work stint at Cargill and made the most of it to learn. After that, she wanted to become a commodities trader. Cargill is a huge private company that deals with soft commodities. She wanted desperately to be one and impressed the HR so much that she got the job. Although sunnies were not traded at that time, she persisted and she eventually had her own sunnies desk at Cargill. Next, she needed people to transport it and used her negotiation skills to achieve that. She moved on and explored fixed income markets, equity markets and pushed for a proprietary desk. Management approved it. Finally, she started her own hedge fund. To her, almost everything nowadays is traded as a commodity. First step us to take the temperature of the market. . Define 3 to 5 themes. Having an open mind is critical in investing. Renee has a very sound risk management system. Once she predicted that gold was overvalued, she borrowed gold to short it at a rate of 1% and bought Canadian bonds that yield 9%. The third leg was the undervalued small cap mining equities. She compared the cost of production and interest rate levels to the market price of gold to see whether it was overvalued. Listen to as many views as possible. Over its 11 year performance, Galtere Ltd only had one bad year.

Risk vs reward is everything and Galtere Ltd will not put on a trade unless we can make about three times what we risk. – Renee Haugerud

If you don’t ask, it will never happen. – Renee Haugerud, on how she built success

China is going to be the next superpower. Increasing prosperity is never bad. Jim Rogers moved to Singapore so that his kids could learn Chinese and embrace China. Jim Chanos was a famous short seller, meaning he benefitted from falling prices. He runs Kynikos Associates. Chanos loved research. Shorting is when you borrow the stock and pay upfront, promising to return it sometime in the future. Crowded shorts is usually when more than 20% of the float is in the short position. There is potentially unlimited loss for the short-seller. Baldwin-United was a piano company which converted into a financial services company. He found it difficult to comprehend how the company was making money. This stock had a great following in the market. Chanos started shorting the stock. As he was junior, many were critical of his comments on the company. Soon, the stock plummeted and he was rewarded handsomely. This good trade tempted him to engage in more. This trade built his reputation. His firm shorted companies like Boston Chicken, Sunbeam, Conseco, Tyco International and Enron. Short sellers are often not the most popular people. They are basically cynics. To handle risk, he could either stop losses or employ position limits. He chose the latter as once you exit a position, it is hard to re-enter. Position limits are set at 5%. Chanos also shorted the Chinese market as he realized a lot of speculative demand for commodities came from them. People were building for the sake of stimulating the economy. This led to an overheating of the market. Supply was outstripping demand. China also had a heavy credit crunch and was over-leveraged. Long corruption, short property. There are definitely more optimistic people than pessimistic people around. Valuation shorts are difficult to pull off as the market might not correct itself in the near future. One can buy puts to protect yourself or wait for a stock to ‘break’.

Short sellers arguably are the ultimate capitalists. Without us pointing out failures, the capital markets won’t function as well. – James Chanos

Lee Ainslie was always interested in technology. He used the BASIC program to track his stocks. He worked with the Tiger Management Corporation and subsequently, Maverick Capital. Lee conducts a great amount of research, unlike other companies. Episcopal High School was known for their top students which had good ethical values and meticulous discipline. Julian Robertson founded Tiger Management. Instead of joining the big banks, Lee joined Tiger. Lee focused on tech stocks. Tiger focused on the best businesses with top management, with a long term view. In 1997, Lee had a controlling stake in the firm, Maverick. He started to invest in overseas markets. The firm was developed based on a teamwork model and encourages independence. The firm works based on a partnership model. Information sharing sessions are extremely common. ‘Our goal is to know more about every one of the companies in which we invest than any non-insider does.’ Lee Ainslie, on their competitive advantage. It takes many months for this information gathering process. Potential hires are tested rigorously. The Big Win for Lee was an Indian company which performs outsourcing work for tech processes for banks. The name of the company was Cognizant. Many companies in the US were looking to outsource processes to Cognizant. Cognizant had a lower operating margin as compared to its peers. To buy an overseas stock, one needs to be aware of the local regulations, operating environment, etc. Emerging markets are highly volatile and an investor has to ready for it. The author gave an example of NII Holdings, where it was incorporated in the US and its customers were all overseas. Due to the lack of analysts following the stock, it was not very highly valued. In emerging markets, the news could occur during your sleeping hours. This makes it harder to follow company related news.

‘We’re a team of peers. There is no king of the hill. There are many talented people who do not enjoy such a team-oriented environment.’ – Lee Ainslie

Chuck Royce knew what he wanted to do when he was just 6. Since young, he has stuck to that goal and has never wavered. Royce picks stocks, especially small caps. He started his own firm, Royce and Associates. He bought Syntex – a manufacturer of birth control pills. He also betted on horses. He joined Chase Manhattan Bank as a research analyst. Due to the boring nature of the job, he headed to Blair and Co, a smaller firm. There was a period when his fellow partner at the mutual fund they had set up, Pennsylvania Mutual Fund left. This was a stressful period of his life. He almost completely lost all his wealth during 1973 and 1974. You can use measures like the S&P 600 growth and value or the Russell 2000 to define what small stocks are. He knows value when it sees it. He treats his purchases as buying into businesses. Do not try and buy the glamour stocks. He looks out for debt levels and return on capital. For the Royce fund, they strive for absolute performance and do not want to lose money in any market condition. The big win features Ritchie Bros Auctioneers, which is a Canada-based industrial equipment auctioneer. They sold equipment from various industries. This business had a particularly large moat to compete. Royce’s company researched everything there is with RBA. RBA had a very strong compounding rate. Royce uses EBIT/EV, which is an approximation for cash flow. EV is the stock price*outstanding shares, plus debt and preferred stock, less cash and cash equivalents. Also, look into the EBIT growth rate.

If you lose 50%, you have to make 100% just to get even…Unless you’ve experienced it, you cannot fully grasp it… My vivid centerpiece of my investment style is not to lose money. – Chuck Royce

The small-cap world is so large that you can do virtually anything you want with it. You can avoid clichés, can subsector the class any way you like to weed out things that don’t fit and reduce volatility. The general perception is that small-caps are all growth all the time, with lots of volume. But the reality is much more varied, more nuanced. – Chuck Royce

But if it is work you have wanted to do since you were 15, then no matter your age, you are passionate about doing it. It is the kind of passion that keeps a person focused – acutely, intensely, relentlessly. – Chuck Royce

Alfred Taubman has made a fortune in retail real estate development. He saw things that others did not. He invented the modern shopping mall. He has a net worth of $2.5 billion. When there was a population shift of people from cities to the towns, he identified a business idea. Where would the people shop at? He revamped the original layout and allowed visitors to interact more with the shop-owners. He built shopfronts with curves so that shoppers could spot it from a distance. In 1950, he started the Taubman Company. His big win was the enclosed mall and the Irvine Ranch. He wanted to expand his business into California. Irvine Ranch was 5 times the size of Manhattan. Initially, Mobil wanted to own this plot of land. After realizing there was much hidden value with the plot development, he upped his bid to outbid Mobil. Alfred sees himself as a developer. His core competency is that of retail real estate development. Learn to cover your downside. When it is risky, spread the risk to others. His company engages in both high and the low end, but not the middle. He met little threshold resistance and dared to redesign shops and combine them to form a mall. He engages in many philanthropic activities as well. Also, he tackled the problem of adult literacy rates in Detroit. He believes in giving others a shot at life if possible. Alfred’s model is as follows ‘Due Diligence à Assess Risk and Reward à set objectives and monitor investment’. He has good knowledge on customer preferences. His firm believes in good cost management. He is an extremely loyal man

It is good karma to share wealth and opportunity, particularly with similarly mined and resourced individuals. – Alfred Taubman

James Beeland Rogers Jr was someone who was always on the move. He was like an explorer waiting to discover new worlds. He started a bottle cap collection business when young. He won a scholarship to Yale. Obsessed with grandeur, he took part in the Oxford-Cambridge rowing contest. After he started out with investing, he fell in love with investing. After his national service, he worked at Arnhold and S Bleichroeder, an investment firm. His co-founded Quantum Fund with George Soros. He retired by 37. He rode on his bike over the 6 major continents in the world. By travelling, James noticed the world for investment possibilities. Jim Rogers was now fixated on China To him, they were the nation of the 21^st century. People in China were toiling, saving a lot of their money and studying English. They seemed very driven. He moved his entire family to Singapore. He invests heavily in the Chinese stock market. Jim rarely spends much time in Singapore. He also has a supremely happy life. Be proud of what you like, don’t be ashamed if it’s not the latest trend. Since there was a glut in the finance industry, he predicted that commodities will flourish instead. Jim now invests in commodities. China has an incredible growth rate and is getting very affluent.

If you come to a country and you see things that are going to be great in the country, my reaction was to go downtown and see if there was a stock exchange. And if there was, then I’d start making investments. – JBR

I will spend as much money as I need to make sure my little girls go to Chinese schools, because the best skill I can give to two people born in 2003 and 2008 is to know Asia and to speak Mandarin fluently. – Jim Rogers

Don Peebles was a millionaire by 27. He runs the Peebles Corporation, an African American real estate development company. This man has a lot of connections to make it big. He did not face any limitations to become what he could today. His parents divorced when he was 5. His parents held decent jobs, but they had to work very hard. This man wanted to seek out for the stars. He believed greatly in his own ability. ‘In America, there are no limitations on what you can do.’ He was born in the 1960s. He had an apprenticeship in real estate and then became a real estate agent. As real estate involved politics, he knew he had to be involved. He worked for a particular Mayor Barry and became chairman of the property tax appeal board shortly after. This helped him achieve many potential clients. He bought a plot of land to develop and convinced many to lend him money or to have a stake in it. To him, barriers are self-constructed. Currently, he has even provided advice for the Obama administration. He likes transformational projects, projects with symbolism. The Royal Palm Hotel project was his next win. He is a very calculated risk taker. He also entered luxury residential development. His next aim is New York. Don’t simply dismiss investment opportunities. Be brutally honest with yourself. Decide for yourself, even those it is alright to seek advice sometimes.

Martin J. Whitman started at the top schools in the US. He even has a school named after him. He was granted for education and what it had done to him. Martin liked Russian history when he was young. When he acquired Equity Strategies, he regretted his decision. Martin had a great knack for analysis, and started analyzing the balance sheet. Soon after, he learnt about control investing. In the 1970s, he realized that corporate finance was his thing. Shortly after, he became an expert in bankruptcy cases and litigation. He eventually entered distressed debt investing. He also performed bankruptcy organization services. He had four criteria when selecting businesses. They had to have decent disclosure, good financials, good price an excellent prospects. Investors can only guard against investment risk, not market risk. Know what you are investing in. Martin also gives back to his alma mater. He is a man of strong values. Bankruptcy cases is his field of expertise. Bondholders get a better chance of a payout during bankruptcy than stockholders. Distressed debt investors will buy these bonds before reorg is announced. Usually it pays off. Value investing is very hard work.

Be wary of value traps along the way. It does not mean that when a share price falls, it makes it cheaper to acquire. One needs to analyse the fundamentals. Observe the PE as well. – Martin J. Whitman

Every one of the above investors is an entrepreneur in his/her own way. Even a retail investor is an entrepreneur as their objectives is to maximize returns while limiting risk. The five principles that investors should adhere to are a well-defined strategy, introspection, discipline, a strict risk discipline and a detachment from emotion.

 

Luminate by Jun Mi Tan

Entrepreneurship is a journey with many ups and downs. It is possible to an entrepreneur in an MNCs if you start new initiatives. Learn to find yourself. This book is largely about success, entrepreneurship and how to live life to the fullest.

Jun Mi is an ordinary person with big dreams. Jun Mi cultivated the habit of reading and had the dream of writing a book. In addition to attending many courses and networking, she owns her own company that provides corporate secretariat services etc. Her motivation for writing this book is so that she can inspire others on their journey.

Curiosity is the key to learning. Devote 100% to everything you do and the rewards will come. Later on in her career, she pursued professional qualifications in the areas of tax, trust, estate planning and compliance. This was after close to 11 years working in other companies in the corporate secretariat field. Learn to step outside your comfort zone. Greet opportunities with a smile and embrace them. Enjoy the process and always find ways to value add.

She wanted to venture on her own after a while. After much thinking, she chose a business that she was familiar with. This allowed her to achieve better work-life balance. What you do on a daily basis is a good indicator of what your future venture is. Learn to think win-win and add value to others. It is never an easy route but there are workshops that one can go for to aid you on your journey to starting a business. There are 3 phases of entrepreneurship. The basic phase is filled with negative emotions but there is a need to stay positive. The Advanced phase is when you need to network to promote your business. Always look out for such opportunities. The Mastery phase is when your business is able to operate without your constant supervision.

Dreams die if they are not worked on. Start writing a list down and tell someone about it so that you will remain accountable to them. Treat yourself when you achieve. Keep practicing. Take considerable time to design measurable goals. Learn to keep a journal as well. Construct your own dream board if you are lost.

You do not need to be successful only when you have attained your goal. It isn’t difficult to be successful. It is just how positive your mindset is. Being alive can be rewarding as well. Choose a positive affirmation and tell others. It takes 22 days for a habit. Stay positive. Listen to both negative and positive feedback. The author’s definition of success are (1) Doing what I love, and loving what I do; (2) Achieving the goals I wrote down at the beginning of the year; (3) Helping others; (4) Being happy; (5) Learning new things; (6) Accepting mistakes; (7) Pressing on.

Use the words ‘wish’; ‘desire’; ‘intend’; ‘passionate’. The ability to speak in public confidently is a life-long skill. Conquer your fear. Understand where your audience is coming from and what they would like to hear. Give eye contact. It requires a lot of practice and don’t expect results overnight. Be the best person you can be. You can share better with others if you can speak well. Use your chances at presentation wisely.

Networking could be more important than money. Learn to sell yourself. Know what your intentions are. Try to serve and help others first and listen well. Be authentic and true to yourself. Learn to remember something about the other person. Organize future meet-ups to strengthen the relationship. Support the person by buying their products or services.

She took up the challenge of organizing a huge seminar. There are plenty of logistics to take care of. However, the book breaks it down into meaningful steps. The more responsibility you take, the more opportunities will be presented to you. It is great when you see those you have helped eventually succeed. Learn and stay humble.

Learn the art of collaboration or ‘win-win’. Everyone still gets a slice of the pie. Synergy is formed if the group is larger and more ideas come together. Integrity is also very important for successful collaboration. Learn to pull resources together. Look out for people to partner with. Align your values with those you are working with. Give each other feedback and track progress. Try not to compete with others unnecessarily.

Know thyself. It is always better to have a direction in life and to know what you want. She learnt about metaphysics, which is non-religious in nature. There are many similar courses available. Learn to maximize on your strengths instead of putting all your energies on improving your weaknesses. Who are you? You are responsible for your own happiness. Try to only work on things you have control over. Once you surround yourself with the right people, success will come. Treat yourself well.

Learning is great because you can apply some of what you learn. Time management is crucial. Find time to do the things you like. Try to volunteer at the event or look for sponsors. If you do not have the money to attend courses, keep reading. Aim to complete a book every month. Share the knowledge to others. Always believe in lifelong learning. Teaching is also a deeper form of learning. Try to apply what you have learnt immediately. Invest in education to spark that urge in learning.

Learn to serve others. Help those who are less fortunate. Give from your heart and you don’t need permission for doing that. Donate to a worthy cause. You can give money, food and clothes, time, skill etc. Voluntary work helps people develop compassion. Share your good deeds with others so as to inspire others. It is alright to be a quiet giver too. Be reciprocal in giving.

Be clear about your purpose in life. Plan ahead but be flexible as well. Start doing more of the things you like. Have faith and belief in whatever you do. Stay positive.

3 Recommended Reads: 1) The Power of Now by Eckhart Tolle; 2) Start with Why by Simon Sinek; 3) The Secret by Rhonde Byrne

Willpower By Roy F. Baumeister and John Tierney

This book seeks to enable you to take charge of your life, teaches you how to be self-disciplined and how willpower can eventually bring you success. Willpower can also be grown and nurtured.

However, intelligence cannot be increased permanently. Self-control can. Willpower is like a muscle, which can be strengthened through repeated use. A lot of non-achievers suffer from a lack of willpower. People often succumb to desires. Modern people were not as strong willed as the Victorians in the past. Modern times tend to focus on do what makes you feel good. People initially thought confidence mattered a lot and that it determines your success. Research proved otherwise. One way to avoid temptations is to distract yourself. The marshmallow experiment has shown that resisting temptations can lead to success in life. Self-control can also predict grades accurately and is a vital strength to key to success in life. Learn to perform goal setting.

Amanda Palmer built character and willpower from being a human statue. The ability to stand still is all in your mind. Exercising willpower like this makes you tired after a while. Willpower can be depleted fast, as shown when the students who ate the radish while looking at the chocolate cake, gave up quickly during the puzzle stage. It is like a muscle, which can be fatigued after long use. If you use too much willpower in the office, your relationship might suffer as you don’t have enough energy to channel to your loved ones. If you try to suppress your emotions, that takes up willpower as well. Ego depletion describes ‘people’s diminished capacity to regulate their thoughts, feelings and actions.’ This also means that the conflict monitoring system in the brain is less able now. Recent experiments suggest that people will over-react when they are ego-depleted. Students experience ego depletion during periods of exams. Money can improve one’s willpower temporarily. Researchers have proven the following: 1) you have a finite amount of willpower that becomes depleted as you use it. 2) You use the same stock of willpower for all manner of tasks. Willpower has 4 types. Control of thoughts. Control of Emotions. Impulse control. Performance Control. Aim to just focus on one project at a time. Don’t overload yourself. Keep to one resolution at a time.

Food containing sugar can give you a temporary boost in brainpower. Energy from food gets converted into simple sugars like glucose. Your body consumes a lot of glucose when you are feeling unwell. People with low blood sugar, or hypoglycemia, have problems concentrating and suppressing their emotions. There is also higher tendency for violence. Blood sugar is a key factor when determining the tendency in which criminals commit crimes. On the other hand, diabetics tend to be impulsive, distracted, have problems with alcohol, anxiety, depression etc. Breakfast is key to having a good start to a day. Moral of the story is: no glucose, no willpower. Ego depletion causes the brain to engage in other activities, rather than the one it is currently engaging in. In general though, women have better self-control than men. Solutions one can take include having a good breakfast, having enough rest. Don’t get into arguments before meals. For smokers, don’t try to quit when you are on a diet. In reality, it is better to go for the slow burners, such as proteins or complex carbohydrates. Food with a low glycemic index. ‘When you’re tired, sleep.’ If you shortchange yourself on sleep, it results in a decrease of self-control. Long term sleep deprivation may lead to a higher risk of diabetes.

To get the most out of your willpower, use it to set aside enough time to sleep. You’ll behave better the next day – and sleep more easily the next night. – Roy F. Baumeister & John Tierney

It is important to regulate the goal as well, meaning you know what it takes to get you there. In reality when it comes to goal setting, people worry too much, they get less done, and both their mental and physical health suffers. Avoid conflicting goals at all costs. People who are drug addicts usually like to see the payoff now and set only very short term goals. It is crucial to always have a long term goal in mind. Proximal goals (short term) VS Distal goals (long term). Daily plans lack flexibility and are difficult to execute. In times of war, it is imperative that militaries plan well for them. However, the plan needs to allow for flexibility and improvisation. David Allen was someone who tried a wide variety of jobs in life. He believed in keeping the work desk neat. He used the tickler file 31 folders. One for each day of the month. It reminded you of what is needed to be done on that particular day. The to-do list needs to have very specific actions, such as ‘driving to the jewelry store.’ It has to be specific so that it will not ambiguous and you will procrastinate doing it. Eliminate your monkey mind by coming up with specific goals. The Zeigarnik effect. The Zeigarnik effect ceases to exist once people have a concrete plan. Our unconscious mind is asking our conscious mind to make a plan. Your mind will only stop worrying if you have a concrete plan to execute something in the future to achieve your goals. Do it, delegate it, defer it or drop it. Being very decisive helps a lot.

When you make an agreement with yourself and you don’t keep it, you undermine your own self-trust. You can fool everybody but yourself, and you’re going to pay for that, so you should be aware of the agreements you make. – David Allen

Uncompleted tasks and unmet goals tend to pop into one’s mind. Once the task is completed and the goal is reached, however, this stream of reminders comes to a stop. – The Zeigarnik effect

Eliot Spitzer had a tough time when he was the governor of New York. He engaged a prostitute, even though he was full aware of the consequences. He was an honest and upright man before he was made governor. He suffered from decision fatigue. Whenever you make a decision, it uses up a little of your willpower. Making decisions saps your willpower. Automatic is when the problem is simple and controlled is when the problem is more difficult. There are no such things as a free choice. However, if you like to do a particular thing, making decisions on that will not affect your willpower in the short term. It is much easier to choose something for others. Even for judges, they were biased in the morning and granted more parole cases in the morning as compared to afternoons. This is attributed to them having a good breakfast and not experiencing decision fatigue yet. Judging is hard mental work. When willpower is low, people tend to defer decision making, so as not to lose options. This problem also applies when finding a mate. It is easier to choose when you are not spoilt for choice. ‘Above a certain point, increases in price are not worth the extra gains in quality’. Once decision fatigue affects someone, he will tend to listen to the salesman’s recommendation.

Mint.com’s software helped people to track their personal finances and expenditures. Computers can help make us more self-aware, in this sense. Those who were more self-aware made better decisions and worked harder. Self-awareness is to compare what you see to what it should or might have been. It’s like comparing yourself to a set of standards. Just by looking at the mirror, people were more likely to follow their inner values. Looking at the mirror indeed makes one more self-aware. ‘A small daily task, if it be really daily, will beat the labours of a spasmodic Hercules.’ Anthony Trollope. Don’t make drastic changes, instead, take tiny steps to change things. People care about what others think of them. Hyperopia is a condition when one focuses too much on the future at the expense of the present.

For contentment, apparently, it pays to look at how far you’ve come. To stoke motivation and ambition, focus instead on the road ahead. –  Roy F. Baumeister & John Tierney

‘The more the body suffers, the more the spirit flowers.’ David Blaine. He is self-described endurance artist. He is obsessed with performing feats that require huge willpower. He managed to hold his breath for almost 16 minutes under water. However, in an attempt to beat the world record, he suffered in front of a live audience. He believe that willpower can be trained and developed. Research has shown that practicing emotional control does not strengthen willpower. You need to override bad habits to improve willpower or by diligent self-monitoring. Your willpower doesn’t get depleted so quickly when you train your stamina. The key is trying to change a habitual behaviour. Exercise is a good way to improve both mental and physical stamina. Self-control is pervasive and will enter every aspect of your life. However, David Blaine also succumbed to temptations in his daily life and especially in between stunts.

As long as you were motivated to do some kind of exercise, your overall willpower could improve, at least over the course of the experiment. – Roy F. Baumeister & John Tierney

Getting your brain wired into little goals and achieving them, that helps you achieve the bigger things you shouldn’t be able to do. It’s not just practicing the specific thing. It’s always making things more difficult than they should be, and never falling short, so that you have that extra reserve, that tank, so you know you can always go further than your goal. For me that’s what discipline is. It’s repetition and practice. – David Blaine

Henry Morton Stanley was a great explorer. He explored many parts of Africa. Stanley had an indomitable will. He lost his father at a very young age and his mother taught him about willpower African people were extremely hostile to foreigners, but he managed to overcome all this. ‘hot-cold empathy gap’ is when it is hard to predict what we will be like when the situation is intense and stressful. People usually only plan for pleasant, peaceful situations. When men are in a hot, impassioned state, they were more likely to want to agree to have a threesome, with another guy involved. Only save your willpower for emergencies. Precommitment is one technique. Tell yourself you can’t leave the path, that it is disgraceful or sinful etc. Example, use a firewall on the internet. There are websites which enable to state your goals and if you can’t achieve them, a certain form of punishment will be ‘meted’ out. Setting a penalty for yourself which force you to achieve your goals. If the precommitment is set long enough, it becomes a habit. Stanley shaved the first thing in the morning. He was a very orderly man. Orderly behavior can actually improve self-control. External order and self-control are co-related. Self-control is only required during the period when the habit is formed. Once you make something a habit, you will be able to conserve your willpower. ‘I was not sent into the world to be happy, I was sent for special work.’ Henry Morton Stanley

Often it appeared as though it were wholly useless to struggle against evil, yet there was an infinitesimal improvement in each stage. The character was becoming more and more developed. – Henry Morton Stanley

Eric Clapton was an alcoholic and a drug addict in the past. He liked to binge drink and had suicidal tendencies. It lowers blood glucose and self control. When part of you wants to do something and part of you does not, alcohol will make you do that something. He prayed every morning. He didn’t believe in a God. However, praying did work. The same thing worked for Mary Karr. Alcoholic Anonymous (AA) helps improve self-control. AA is a session for alcoholic. people to get together and share their problems The more meetings you attended, the less likely you will drink. AA seemed to be as good as seeking professional help to quit alcohol. Why?. Members get rewarded for not drinking and can choose a sponsor, who is someone who they are supposed to contact to track their progress. The warehouse effect. The last reason is that AA is socially uplifting. People drink and smoke because of peer pressure. People may be a higher power in your life. It need not be a religious figure, like God. The people who needed to seek help from others were about to quit more easily. Social support can work both ways though. A lack of friends tends to lead to alcohol abuse. Just by relating your past experiences will force you to be more self-aware. If you mention your goals to your friends, it is more likely you will stick to them. Social influence matters a lot. Religious people are less likely to develop bad habits and have better social support groups. They also have better self-control. Religion affects both building willpower and improves monitoring. Religion has the diminishing people’s temptations effect. It requires good discipline for one to follow a religion as it involves attending services, prayers and rules. People who visit churches for other motives will likely not experience better self-control. ‘Hyperbolic discounting’ is when the temptation is right in front of you and you find it very hard to resist. It takes just 1 lapse to establish a long-term pattern. It is important to set a bright line, meaning zero tolerance with no exceptions.

Contrary to popular stereotype, alcohol doesn’t increase your impulse to do stupid or destructive things; instead, it simply removes restraints. – Roy F. Baumeister & John Tierney

Early psychologist believed having better self-esteem could change your life. A lot of people believed the key to success was self-esteem. A lot of parents encouraged their kids to think highly of themselves. Many of those who commit crimes have low self-esteem. From self-esteem to narcissism. Which came from? Good grades led to self-esteem? Or self-esteem led to good grades? Improving an academically weak student’s self-esteem did not make much difference to their grades. Serial rapists have very high self-esteem as well. Children, in general, have very high self-esteem. It might also be hard to get along with someone with high self-esteem. There are two benefits associated with high self-esteem. They are taking initiative and feeling good about yourself. High self-esteem can lead to narcissism, conceit and arrogance. When a problem arises, they tend not to act because they already feel their skills are adequate. Asians tend to have better self-control than the Americans. James Flynn argues that they do not have higher intelligence but are better able to make use of their intelligence. Asians believe more in delayed gratification. You get self-esteem from being praised and rewarded, not by boasting to others or flaunting your wealth/arrogance. Asian parents were more supportive of self-control, rather than self-esteem. You can’t keep letting your children win. They will climb all over you. The speed/consistency of the punishment matters more than the severity of it. You have to do what is right, even though disciplining the child in public might seem awkward. It is very important to lead by example. When the baby cries, sometimes let them be. Then go over and comfort them, then withdraw again. Repeat this until they can sleep in peace at night without disturbing you. Don’t let them think they can get their way just by crying. Set house rules like using colored rings, whereby one ring for a good deed entities the kid to 15 minutes of play. It is very important to understand the importance of saving. It is important to set rules and be consistent. Once the child is ready, let them set the rules. Both genetics and the environment played a part. Those children whose fathers’ voluntarily left the home were even less likely to succeed in life as compared to those whose fathers’ left due to other reasons, like work.

Success is conditional – but it’s within your reach as long as you have the discipline to try, try again. – Roy F. Baumeister & John Tierney

Everybody wants flat abs. If you want to lose weight, do the following 1) Never go on a diet; 2) Never vow to give up chocolate or any other food; 3) Whether you’re judging yourself or judging others, never equate being overweight with having weak willpower. Dieting and self-control are not strongly correlated. Exercise alone isn’t enough to ensure weight loss. Dieting is much harder. Your body will fight against it. And once you had food readily available, you will become fat again. Instead of going on a diet, take gradual changes to ensure long term effects. Set realistic goals. People usually set unrealistic goals. ‘Diets work at first but fail miserably in the long run.’ Self-control can fail when it comes to weight control. What-the-hell effect. Once you bust your calorie intake for the day, you have failed and will just continue eating. Your body knows what is the optimal amount of food you should eat. Diets rely more on external cues, not internal ones. Obese people were in fact more likely to go on diets. However, once you fail to follow to the plan strictly, you are screwed. Suppressing your feelings while in the cinema tends to cause you to overeat later. Dieters are trapped in this cycle. This the nutritional catch-22. ‘In order not to eat, a dieter needs willpower. In order to have willpower, a dieter needs to eat.’ Other ways of fighting the flab include precommitment. Keep the sweet food out of reach and out of sight. Brush your teeth early in the night is one way. There are websites where you can set penalties for yourselves if you fail to hit certain targets. Try to switch to automatic thinking. Whenever you think of sweet food, put on your running shoes, for instance. Constant monitoring like weighing yourself will help a lot in weight loss. Buy smaller plates and thin glasses at home. Avoid snacking when watching a movie. Simply by telling yourself you can eat something later is a way of ‘satisfying’ your craving now. When it comes to desserts, tell yourself that you can have it later. Never say never to nice food. Just say you will be able to have it tomorrow.

‘The best way to reduce stress in your life is to stop screwing up.’ People with good self-control need to resist to temptations less. This is ironic. The explanation is that people like that know how to keep their lives in order so as to minimize conflicts. Don’t procrastinate. That is the key. It is extremely common to procrastinate. The problem stems from impulsiveness. Men face more of this problem than women. When faced with a difficult task, men tend to be impulsive and do something else to make themselves feel good. It is not good to work under tight deadlines as your performance suffers. It seems like from research, procrastinators are healthier, but they suffer more in terms of grades. Every decision you make requires willpower and it will make you feel tired. How to sense for ego depletion? Once depleted, you will be liable to make mistakes. Force yourself to think long term and write down your decision steps. If you need to think very hard, remember to eat first. This includes an exercise regime, picking up a new skill etc. Pick the right battles in your life. Do self-reflection at least once a year. Use it to track your progress of goals. Don’t be too ambitious. Set yourself tight deadlines if you know you have the ability to achieve them. ‘Make a to-do list’ with a specific plan. To avoid the planning fallacy of being overly ambitious, think back to your past. Even if you are working on your goal, don’t forget to exercise and take care of your hygiene. Ensure adequate sleep. Change a bad routine. Try to delay your gratification. Monitor your goals frequently. Give yourself rewards as they will continue to motivate you. Research has shown that people with willpower are more altruistic and more willing to help others.

The secret of my incredible energy and efficiency in getting work done is a simple one. The psychological principle is that anyone can do any amount of work, provided it isn’t the work he is supposed to be doing at that moment. – Robert Benchley

Write or nothing. It’s the same principle as keeping order in a school. If you make the pupils behave, they will learn something just to keep from being bored. I find it works. Two very simple rules, a) you don’t have to write, b) you can’t do anything else. The rest comes of itself. – Raymond Chandler

 

 

Mental Efficiency and Other Hints to Men and Women by Arnold Bennett

The world is more efficient these days. We are often more concerned about our physical body as compared to our mind. As such, we do not see the need to improve our mental capacity and end up neglecting our minds. We lack the willpower and the ability to concentrate using our minds. The key to improvement is to recognize your weaknesses and to practice concentration for a while every day.

But it does not, perhaps, occur to us that the mind has its muscles, and a lot of apparatus besides, and that these invisible, yet paramount, mental organs are far less efficient than they ought to be; that some of them atrophied, others starved, others out of shape etc. – Arnold Bennett

 

We have the desire to perfect ourselves, to round off our careers with the graces of knowledge and taste. How many people would not gladly undertake some branch of serious study, so that they might not die under the reproach of having lived and died without ever really having known anything about anything! – Arnold Bennett

If you are too ambitious at the start, you will be doomed for failure as you will lack the motivation to push on when you received a setback. Failure is a dangerous wound. Start small and take little steps each day. Sometimes if you tell your goal to others, they may mock at you, although doing so can increase your accountability. Set aside small blocks of time to achieve your objectives and do it diligently. Go for memory classes and practice writing classes etc. Write about anything. Learn to keep a journal. Failure must be treated with indifference. Choose your own goals.

A most curious and useful thing to realize is that one never knows the impression one is creating on other people. I mean that one has one’s self no mental picture corresponding to the mental picture which one’s personality leaves in the minds of one’s friends. – Arnold Bennett

We tend to judge others better than we can judge ourselves. We are also sometimes very harsh over the opinion of others. Sometimes, when you annoy others, you are unconscious of them and you only realize them very much later. Kindness is the greatest of human qualities in friendship. To a certain extent, kindness can be cultivated. The most resolution is the one where one needs to break with the past. One can’t do away with the past. Thinking of the past often makes one unhappy. Grief is something of the past. One should not keep mourning over the past as it will make one unhappy. We need the faculty of imagination and to look at our lives from another perspective. Don’t let your past influence you from pursuing new tasks and challenges. Every man must be their own philosopher. The grass is not always green on the other side. Do not let your ambitions cheat you too much. Savour in the present and not keep thinking that the future will be different from the present.

You search for happiness? Happiness is chiefly a matter of temperament. It is exceedingly improbable that you will be struggling gain more happiness than you already possess. In fine, settle down at once into life. – Arnold Bennett

Marriage is not a duty to the state. Do not marry someone because you feel like you need to fulfil a duty to the state. The author does not suggest that one should marry if one has any doubt, or does not feel sufficient love etc. Do not be afraid of being single, for single brings its own unique freedoms. Marriage is not a guarantee of no loneliness in old age. For most marriages, it becomes more of tolerating the other party and sometimes it even turns to dislike and detestation. One should be extremely cautious about marriage. Marriage should be about reason and never about whirlwind romance.

I read what I feel inclined to read, and I am conscious of no duty to finish a book that I don’t care to finish. I read in my leisure, not from a sense of duty, not to improve myself, but solely because it gives me pleasure to read. – Arnold Bennett

 

In buying a book, be influenced by two considerations only. Are you reasonably sure that it is a good book? Have you a desire to possess it? Do not be influenced by the probability of you reading it. After all, one does read a certain proportion of what one buys. And further, instinct counts. – Arnold Bennett

Success is broadly divided into 4 branches: (1) Distinction in pure or applied science; (2) Distinction in the arts; (3) Direct influence and power over the material lives of other men; (4) Success in amassing money. Sometimes, the majority do not aim for success and success can take modest forms. Success books are for minority to deceive the majority. It is misleading because it seems that most successful people have planned their route all the way though it’s not true. Based on the author, the successful does not have above average intelligence etc and it is very difficult to pinpoint what makes someone successful. There are 3 types of success. Success A is the accidental sort (due to chance); Success B refers to men who have the talent to succeed; Success C refers to sheer high merit. A certain degree of success will be due to chance. This means that hungry people are on the lookout for it more, but they are not necessarily industrious. They have the insatiable wish to be successful. They also do not give up easily, contrary to what others might think or criticize. He keeps trying and is undaunted by failure. He is always trying to grab new opportunities

Once a man has achieved success, the thing becomes a habit with him. The difference between a success and a failure is often so slight that a reputation for succeeding will ensure success, and a reputation for failing will ensure failure. – Arnold Bennett

Do away with all the small courtesies that will slow you down. Just do it right away. Form is the basis for all beauty. You can have too much convention in life. The basis for convention is symbolism. Beauty is brought out through discipline and ordering. Happiness springs from the fact that there is a higher being and something that can control the mind. One needs regular meditation. The Force is in me and exists forever. Imagine that your soul is immortal and that nothing can affect it. One needs to be benevolent in all aspects of life or you will never attain contentment. Learn to cultivate charity and calmness.

 

Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett by Jeff Matthews

This book is about the 2011 and 2012 version of the Berkshire Annual Meeting with Shareholders. It was conducted in a 6 hour Q&A format and shareholders can shop at the various booths of Berkshire subsidiaries. This was the Woodstock for Capitalists. Berkshire bought both fractional interests of businesses and complete businesses. The existing management pf the various subsidiaries would run the show and channel profits back to Berkshire, if necessary. Warren Buffett’s investment philosophy is long term and he only invests within his circle of competence. He was also a big fan of newspapers. The directors of Berkshire were known to be only paid a pittance due to Buffett’s thrifty nature. Set expectations, meet expectations, repeat. Buy great businesses at reasonable prices, rather than bad businesses at great prices. He only invests in companies with a durable competitive advantage, honest and competent management and at a decent price. Buffett was a prudent man with conservative spending habits. He is particularly bearish on the finance sector due to the underlying risks contained. The importance of good character qualities cannot be over-emphasized.

Lessons from the Book: (1) Do not lose. (2) Know your Circle of Competence. (3) Don’t follow the crowd. (4) Keep reading. (5) Look for easy problems. (6) Keep it Simple. (7) Broaden your horizons and keep an open mind. (8) Don’t believe what you hear, believe what you see. (9) Give back to society whenever you can. (10) Do something you are good at. (11) Have a margin of safety. (12) Think Independently