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

Small Scale “Losses”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Medium Scale Losses

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Life Changing Losses

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By popular demand here are the action steps:

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

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

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

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

– Push yourself to physical failure every single month

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

– Never pay more taxes than you should

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

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

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

———————-

Unrelated side note!

Welcome New Readers!

For some reason the blog went viral so we decided to wrap up this post early (we will proof read tomorrow and you should anticipate more improvements to come over the next month!). That said… We probably spooked off all of the “normal people”. If we did… We’re thrilled! Thank you to the smart ones who are sticking around.

This blog is intended for successful people. This means that the following are unacceptable around here:

1) motivational videos and other such non-sense… become self-motivated not a follower who needs motivation

2) frugality... trying to gain muscle by eating iceberg lettuce all day

3) television and mass media… decrease in cognitive abilities, entertainment for idiots

4) beliefs rooted entirely in emotion, not logic… Easily influenced by the masses

5) trading your time for money… working an hourly wage is *never* going to make you rich

Now that we’ve spooked everyone off… on with the show and we’ll be watching the comments under a microscope!!!

We have already beaten it into everyone’s heads. The only way to get *wealthy* is to start a Company. The only way to become well off is to go into Silicon Valley, Sales or Wall Street. The rest is non-sense. No performance, no money, no exceptions. With that horse beaten to death, lets see what you’re good at and determine which industry you should work in.

1) Why You Need to Determine Your Intelligence Set Early

2) Intent – The Broadest Talent

3) Numerics – The Most Difficult to Replicate

4) Synthesis – The Most Adaptable

5) Artistic – The Call Option

1) Why You Need to Determine Your Intelligence Set Early

You simply do not have time. We tried to explain this in our post on living a balanced life but it needs to be a non-debate. You do not have time.

We hope that the vast majority of our readers are young because we can prevent them from ruining their lives chasing skirts at the expense of their future. You are going to get more physically attractive from 20 to 35 if you eat healthy and stay in the gym. However… It will become exponentially difficult to learn new skills as you age that are **equivalent to your competition**.

We highlighted part of that sentence with 4 stars because it is paramount to understanding that you do not have time. Lets assume that you believe you can learn a new skill at 20 just as fast at 30… Great.

It doesn’t matter! Too Late!

Why doesn’t it matter? It doesn’t matter because everyone starts from *zero*. If person A is equally as smart as you but starts building his salesmanship skills at age 20 and you start at age 30… Good Luck! While you may improve at the same rate as the 20 year old, you won’t be as good as him until you are 40, you’re cooked.

Now that we have spooked everyone… even if you’ve made some bad decisions… there is nothing you can do but fix it (take action). If you’re 18 (hopefully) or if you’re 30 (long-road ahead) the only way you’re going to get better is to find your primary intelligence and leverage it immediately. Get into the ring and get ready to take all of those losses.

2) Intent – The Broadest Talent

Some of you are going to read this section and believe it means “Emotional IQ”. That is certainly close. The difference between intent and Emotional IQ is that you don’t need control of your own emotions to have an amazing ability to recognize intent. Intent is an all encompassing skill that is fully transferable to every aspect of your life (except one): Business, Sales, Social Environments.

The elephant in the room? Minimal transfer skills to Silicon Valley/Quantitative Finance.

Do you ever wonder why Quants and Engineers are usually the two groups with the worst social skills? Do you ever wonder why they are so brilliant… yet… have a hard time in group environments? Well now you know. They have low abilities to read intent.

The good news is that intent is the easiest skill to learn. You can go from zero skills to moderate abilities in a year (maximum). The trick? If you recognize that your talents do not lie here, don’t bother going into a pure sales role! You’re going to be better off in a specialized business, Silicon Valley or Wall Street (Remove Investment Banking and Sales within Wall Street).

With the basics out of the way. here’s a good bullet point checklist to see if you’re good at recognizing intent:

1) Can you correctly read the difference between passive aggressive behavior and dis-interest?

2) If you are shown an advertisement can you determine if it is “good” without seeing the numbers?

3) Can you correctly read the difference between insecurity and an outright lie?

4) Are you able to tell when someone is lying about their achievements (up or down)?

5) When an acquaintance of yours says he/she is going to do X do you know with certainty that he/she will or will not do it?

Now that you’ve read these five questions you can now test yourself. You can use this as a quick quiz over the next 6 months and see if you have a *talent* for intent.  Find at least 10 situations where you will have to ask *each* question to yourself and you need to try and get 50/50 correct. This is next to impossible. Try it anyway.

If you are able to correctly recognize these behaviors 50-60% of the time (you’re at the median). IF you can correctly recognize these behaviors 70-80% of the time (you’re at the 1.5 standard deviation). If you clear 85%… You’re extremely talented. If you’re at 50% or below, ignore it as a primary talent, if you’re at 70%+… Get ready to invest aggressively in your salesmanship.

For fun, lets go ahead and assume that you’re good at this. You are able to correctly determine the *intent* behind what someone is doing 70% of the time. Congratulations! Now you can move on to building up your encyclopedia of reference points.

1) The best way to determine if someone is being passive aggressive with you… or is dis-interested in you… is to give them something they need. We would wager that everyone meets at least 5-10 of these people per day and don’t recognize it.

Once you’ve got your list of people, you can see if you were correct. Give them an item worth about $20 that they *need* and see how they react. If they feel uncomfortable? They had no interest in you. They were not being passive aggressive. If they are extremely excited (fake) or they don’t even say thank you (blunt) they are being passive aggressive. It really is that simple gentlemen.

If you don’t want to spend anything and want to do it the long way, here’s another method:

For the most part, when people give you short answers (assuming they are not meaningful) they don’t care about you. If they try to gossip with you… You’re likely talking to a passive aggressive person (hence why the vast majority of women gossip and are usually passive aggressive).

2) We put up a tweet of a fantastic advertisement we saw on Yahoo! It was for a skin care product with a “free trial” <– affiliate 101. It was so good you can view the advertisement below.

This one was an easy one to peg as “good” because of the advertisement copy: 1) *horrifies surgeons* (ie: fake bias of positivity), 2) *shocking trick* (IE: laced with emotion), 3) *weird solution* (IE: targeted at morons looking for a magic cream), 4) *younger* (IE: solution to the problem, clearly targeted at women 25-40 or so).

After clicking on the headline copy you enter the sales page. The sales page is also beyond fantastic. The details in the woman’s face are extremely close to looking “real”. That’s what a good sales page should look like. Looking down you find the following: 1) “botox injections” (Ie: pre-selling the product at a higher price point since botox is relatively expensive – cost of most generic skin products is below $1.00!); 2) “recent clinical study” (IE: again, biasing the reader into believing in positive results), 3) “contraction of facial muscles” (IE: how morons would understand how skin ages – making a connection by talking in this form of prose), 4) “free trial” (IE: set them up for recurring billing).

That is how it is done! If you can correctly see solid ads, you’re going to be swimming in money later… by writing them! This ad is simply fantastic. It is targeted at an extremely lucrative market as well.

Insecurity (decline of looks) + Income (women 25+ or married with access to hubby’s $) = Cash Flow Machine

***Pro-tip: As you can see… all good businesses target insecurity & fear. A great example is “Investment Banking Modeling Courses!” anyone who works in the industry knows that these courses are useless (you are trained on the job). But. Everyone wants an “edge” on their competition! In *fear* of not being able to perform up to standards, they sign up for modeling courses that won’t help them at all.  They could have just learned how to model *for free* sitting at their desk. But… That’s too much work. Everyone wants “hand holding”, making them less self-reliant and weaker performers in general… Sigh.***

3) If someone is insecure and you need to befriend them… You know what to do. Highlight the insecurity as a positive. The person is so insecure about topic X that you should simply big him or her up on topic X. Lets say your acquaintance has a lot of contacts that you want to sell your product to. Unfortunately, he is an extreme liar when it comes to getting girls (you know this). In order to get him to like you… Ask him for tips on picking up women!

While it may sound counter intuitive… it works every time. He gets to give you “tips” while you get to build a relationship with him. He claims to be good at this (he’s not) but here he is giving you advice. As you do this over the course of a few weeks he is incessantly lying through his teeth about how good he is and how you should do X, Y, Z. Unless the person has no heart at all, he is going to mentally feel bad about this. Over time as he lies to you about his conquest and you “believe it” he is going to feel bad about lying to you every single day. Then you pitch your product. He’ll say yes.

Finally, if he was outright lying to you and it wasn’t an act of insecurity… He won’t give you any tips.

***Side Note: This piece of advice was by far the most uncomfortable part of the entire post. It seems down right crazy. The problem is that you’re going to have to *bend the rules* a lot as you go into higher stratospheres of income. In the end, if you’re selling a legitimate product that you know he and his friends need… You’ve done nothing wrong. Your approach was slippery, but the end result was beneficial for *everyone*. As always, art not science.***

4) There is not much you can do here. If someone is a colossal liar, so be it. If someone is lying up or down by 10-15% about their achievements… They are probably normal. In fact, when your resume is handed to someone, everyone in the recruiting department assumes a “15% exaggeration factor”.

The real benefit is catching the people who *lie down*. These people are the smartest ones in the room. They lie down because they want to see how you react when *you believe* you’re doing better than them. Our friend at Financial Samurai calls this “stealth wealth”. If you can find people who are trying to get you to show your cards… keep an eye on them as a potential threat or partner. It’s going to be one or the other.

As you all know… the guy who tries to “convince” you that he’s rich… Is never rich. If they have to tell you they are ____ then they are not. Other people will tell you.

5) This is the easiest game to play during new years. When someone says they are going to do X for their “new years resolution” keep a quick journal and see if they follow through. If someone actually follows through with what they said they were going to do… Get ready to bring out the recruiting forces.

Anyone who says they are going to do X and actually does it consistently is already in the top 10%. They may never make it to the 1% or become exceedingly wealthy, but they will *never* be average. Why? If someone consistently commits to a task and completes it, they are of value.

The only exception to breaking a resolution, is in exchange for something better. (Example: guy says he will increase his income by $20K after switching firms. Instead. He starts a side hustle and makes $40K. Clearly this is a perfectly fine reason for avoiding the firm switch).

Concluding Remarks: This type of intelligence must be cultivated. Even if you’re scoring below the 50% marker in our “exam” it is a necessary skill to at least develop. Develop your skills to the 60% marker and move onto numerics and synthesis. If you’re scoring in the 70%+ range out of the gate… here are the obvious career choices for you: Affiliate Marketing, *Sell-Side* Wall Street, Enterprise Level Sales, High End Promoting/Marketing <– only if it can be scaled, no hourly wages.

3) Numerics – The Most Difficult to Replicate

Ahh it finally hits you. Why in the world does everyone assume that being good with numbers is the end all be all of intelligence? Now you have the answer. It is nearly impossible to find this type of talent. This is both a blessing and a curse if your skills lie in numerics.

99/100 times we will wager that someone with numerical skills (enough to become a Quant or high level engineer) has social issues. They consistently use logic to explain *emotional* behavior of humans (practically no one you meet will have control of their emotions). Out of frustration, they end up being outcasts, particularly when it comes to dating.

With the negative paragraph out of the way… They are going to clear low to mid six-figures (or more) every single year without skipping a beat. Why? This type of talent is nearly impossible to learn. We will go so far as to say that it *cannot* be learned to the 1% level. You’ve got the gift or you don’t. You can try to fight reality and claim this is a “limiting belief”, but we’ve simply never seen it.

If you know someone who was not very good at math land a career at Renaissance Capital coding as a software engineer… Please let us know! (hint: they don’t exist).

Fortunately, if you’re good with numerics, you can quickly see if this is your talent because the stair steps are clearly laid out for you.

1) Are you blowing through the math section of your SAT (lets draw the line at 750)?

2) After blowing through these exams did you step on the gas pedal through an elite university? IE: you were not studying hard yet landing A-‘s or better in complex courses?

3) Can you read a statistics report and immediately laugh at the findings?

4) Did you get through the 5+ round process to work at Google or as a Quant? (obviously you’re good, ha!)

Now the questions above seem ludicrous… Because they are. This is the only form of intelligence that is easy to test and easy to measure. This is also why society focuses so much on it, they can easily *prove* if you’re good at it so it becomes a primary measure of intelligence.

No matter how many people read this post, we can easily say that less than 2% will say “Yes” to all four of the questions above.

Now before we sign off on this topic we can create a baseline of understanding without becoming a Quant. So here are some quick math questions:

1) A person earns $100/hour and works a full time job. How much do they earn?

*You should be able to do this in 5 seconds or less*

The answer is: ~$200K. Instead of taking a calculator out… the answer is simply 2,000*hourly rate. Now you will never be fooled by BS claims of riches.

2) A stock goes up 10% on day one and declines 10% on day two. How much is the stock worth in 50 days?

*You should be able to do this in about 10 seconds*

The answer is: ~75% of original value. Regular people will need to take a calculator out. They will never understand the power of compound interest. The “true answer” is closer to 78% but once you realize that it is losing 1% in value every two days, the number pops up after one iteration.

3) You invest $25,000 at age 25. It grows at 5% per year. How much do you have at age 40?

*You should be able to answer this one in 5 seconds*

The answer is: ~$50K. The true answer is slightly higher but you simply know that it would take ~14 years to double. You round up so call it a wash. Double.

Concluding Remarks: Wow. This is by far the most boring section we have ever written on the blog. Numerics is likely interesting to a very small subset of people (the ones that are extremely good at it). Positively, if you have mediocre skills when it comes to numbers, the door is wide open for a wide range of careers or business opportunities.

If you are extremely good with numbers… congrats! You’ll always be well off (financially). Become a Quant or a high-end Software Engineer.

If you are mediocre with numbers: Investment Banking, Merger Arbitrage Hedge Funds, Sales and Real Estate are all up your alley. If you’re “good” with numerics. Engineering is still on the table, but becoming a high end Quant at a competitive Wall Street firm is not.

If you found the questions above to be difficult… You should immediately improve your baseline understanding of numbers.  Once basic algebra becomes easy, the high level numbers when looking at a business will be easy to calculate.

While you can go ahead and try to bring a calculator and excel with you to every meeting, it is *much* better if you don’t. Why? You can synthesize the data on the spot and play dumb if they give you too much information.

4) Synthesis – The Most Adaptable

Similar to intent, synthesis is the second unspoken form of intelligence. In short, you’re probably a fantastic person when it comes to networking. Why? You can quickly make a connection with someone. You synthesize his or her skills and put them in contact with the right people to fulfill their needs. (transaction complete!)

Ever notice that solid real estate agents are always able to network like it was engrained in their brain to do so? They are natural synthesizers and of course… this leads to solid “leads”.

The real interesting part about being able to synthesize information quickly is this: What *type* of information can you synthesize quickly?

If you can synthesize 1) numbers, 2) emotion and 3) intent all at the same time… You have a wide range of career and business options ahead of you. If you’re heavier on one versus the other… We still have solutions for you. 1) If you’re able to synthesize basic numbers and intent – You want to steer towards transactional work (Investment Banking, Private Equity); 2) If you’re able to synthesize emotion and numbers – you should look into portfolio management; 3) If you’re able to synthesize emotion and intent… but you are not good with numbers – every single product sales position is yours for the taking.

Similar to the other section lets see if you’re good at synthesizing:

1) Can you correctly predict who will like each other in your phone? Everyone believes they can do this, very few can do this accurately.

2) Can you determine what type of asset your friend(s) are willing to purchase? Everyone has a different investment strategy, but can you figure out the next “big move” someone is going to make?

3) If you have twenty meetings in a day, can you remember all of the numbers you were given without checking your notes? How accurate were you and can you connect the dots to see if anyone is lying? (Fun fact: if you meet at least 20 people, someone lied to you in the meeting and the numbers will prove it)

4) You read an in-depth statistics report and compare it to a report you had read 6 months ago that contradicts the new data. Without referring to the second report are you able to determine which one is accurate *without* emotional attachment to either?

The first two items are easiest to test as you have access to information at your finger tips: the contact function in your phone. If you can correctly predict the moves of your friends, you’re going to be very good at sales, Sell-side Wall Street, fund raising for a Private Equity firm and selling real estate.

On the other hand… If you find the first two tasks to be difficult, but find the next two tasks to be easy… You’re better off working as an engineer or at a quantitative heavy hedge fund.

Intelligence/Skills Overview: What started out as a “quick post” has somehow ballooned into a much more lengthy article. The good news is that the post can be summarized by the Venn diagram below.

For fun, here are some clear examples of the overlap:

1) James Harris Simons – would clearly fit into synthesis and numerics, Renaissance Technologies (purple)

“Why don’t we have enough teachers of math and science in the public schools? One answer is well, if they knew the subject well, they’d also know enough to work for Google or Goldman Sachs or God knows where.” – James Harris Simons (No surprise he is a mathematician!)

2) Ken Griffin – would fit more into intent and numerics. (yellow)

“We manage risk and provide liquidity. We are not a hedge fund… We use our capital base to provide liquidity to capital markets and to absorb the risk of risky assets… Our goal is to find underpriced and mispriced assets and hedge away the risk… We mitigate the macro risks that global macro managers take. We are the inverse of macro fund managers.” – Ken Griffin (no surprise they run a market neutral book!)

3) Frank Quattrone – Would fit into intent and synthesis (light blue)

“I did nothing wrong. I am confident that the investigation will show that.” – Frank Quattrone (Unquestionably the best Tech Banker today, unsurprisingly cool as a cucumber when being investigated)

4) Pure Intent (green) – All sales all the time. Zig Ziglar. Affiliate Marketing.

5) Pure Synthesis (dark blue) – Head Hunters. Glocap.

6) Pure Numerics (red) – All of the quants and engineers gathering and organizing data but not yet in position to “pull the trigger” on the meaning of said data.

If you have no skills in any of the three categories… You should get to work immediately. Of the three skills, Sales and Synthesis are the *easiest* to learn (numerics is the hardest to improve upon).

Now you see why it is so important to find out where your “intelligence” is the highest. You can quickly steer your life into a specific career or business model. If you know at age 20 that your skills are in sales and synthesis… Don’t bother with becoming an engineer or working at a numerics heavy hedge fund. You’ll get paved.

Instead, go into Banking or Private Equity and suddenly you’ll find yourself moving up the ranks! The belief that everyone should go into X career is simply non-sense. If you can make Vice President or above in any of the fields mentioned here you’re not going to be hurting for money. You will be raking it in. Making at *minimum* $300-400K a year and you won’t even be thirty.

Finally, if you’re older… Then time is not on your side. You need to find out which area is best for you… starting yesterday. Get cracking on improving your skills in that arena. You need to work *harder* than everyone your age since you are playing catch up.

5) Artistic – The Call Option

We’ve separated this section out for a reason… It is a winner take all market. We can throw athletics into this category as well. If you’re truly at the top of the food chain in terms of artistic abilities or athletic abilities… You’re going to make a lot of money.

While Lil’ Wayne may fail a standardized test… He’ll make more money in a year than most people will make over 5, 10 or even 100 lifetimes. If that’s not a form of “intelligence” we don’t know what is. We’d happily trade his artistic/rap abilities over a 90th percentile score on some meaningless aptitude test.

The Action Bullets:

– If you’re not where you want to be financially, time is *not* on your side. This is a stone cold reality. It only gets harder. If you don’t take action today, you’re simply giving the competition a head start.

– What are you good at? Intent, Synthesis or Numerics? You don’t need to be good at all three (if so congrats!).

– If you find out you’re not great at any of the three (scoring below 50% in all categories across 100 test runs) then you should invest in Sales first. There are too many products that need to be sold and there are too many ways to make money in sales. It is also the easiest to learn.

– Do not fit a square peg in a round hole. If you’re great at numerics there is no reason to change your life and try to become a real estate agent. *leverage your talents*. There is money everywhere. Again. Leverage *your* talents not what other people are “telling you” to do.

– If you’re in the top 1% when it comes to the arts… Congrats! (We’re obviously not!). Go ahead and go up the food chain and make that $$$.

Good luck!

Four ways to attract girls: 1) looks, 2) social skills – “game”, 3) relative status and 4) money. That breaks it down quite well. Instead of arguing about which one is “more important” we are going to focus on money in this post. You should always work towards maximizing all of your four categories. However. We assume you are at the *median* in the other three categories (no competitive advantage when it comes to status, looks or game. Simply the median).

1) Overview of Why Money Matters

2) Quick Calculations For Your Relative Dating Market Value

3) If She Can’t Experience It, It Does Not Exist

4) Why Over 70% of People Are “Below Average”

5) “But I Know a Rich Guy Who Struggles”

Overview of Why Money Matters

Since our readership is full of intelligent people… you already know why money matters. You can use money to improve your looks (clothes, healthier food). You can use money to hire a social skills coach (extreme situation). You can use money to hire a personal trainer (fitness). You can use money to elevate your relative status (owning expensive assets). Money simply makes life easier.

Please take a look at the graph below and you’ll understand why you should work hard in your 20s. The graph depicts her expectations of your income versus your age.

As you get older and older, the amount of money you’re *expected* to have will continue to increase! If you’re young (college or just out of college), girls do not have high expectations. You’re young, broke and hopefully cool/popular. Money doesn’t matter much.

You simply do the following: 1) get in incredible shape and join a sports team, 2) learn how to dress and 3) improve your social skills. Since girls do not have high expectations when you’re 18-22 years old, do not try to use money to get girls. You don’t have enough money and they do not care. They are more concerned with you being a cool and attractive person.

At 23 the fun begins.

For those of you that made the right decisions… the amount of money you’re making will help you *immensely*. If you are making ~$150K out of college as an investment banker, you’re going to have a slight edge over your competition. However. When you start making ~$300K+ at age 26-28 you are now in the top ~10% in major cities and life will get significantly easier.

In Short: When you are young, girls care much less about how much money you make. They care much more about how cool you are (status). How attractive you are (looks). How funny and interesting you are (“game”). This changes at age ~23. Even if you’re still trying to date younger girls they *expect* you to have some income. Living at home in your parents basement is simply not going to cut it. You should have a roommate for the first year or two, post college. But. You should go ahead and live on your own by the time you are ~25 years old.

Quick Calculations For Your Relative Dating Market Value

Unlike other places on the Internet, we are going to break down the income brackets for you in a simple graph.

As you can see by the graph, you need to make *at least* the median income in order to consistently date girls in the 6-7 range. If you are extremely good looking or have extremely high status (musician, DJ etc.) you can break these rules. But. Nothing else will help you if you’re below the median. If you have incredible social skills but can’t even afford to live in a major city, the girl is going to ditch you. A girl who is a solid 7 still has dating options.

Girls in the 5 and Below Range: As mentioned in the graph… Who cares. Don’t bother “practicing game” on these girls. Simply avoid them and move on. One day you will black out from partying too much and make a mistake. But. Do not talk to these girls on purpose! Everyone has a loss somewhere on their dating resume.

Girls in the 6 Range: A six is simply your type but other people wouldn’t be attracted to them. If you like XYZ type look and she’s “okay” it usually means she’s a 6 to you and a 5 to someone else. This shouldn’t matter to you, so simply proceed as normal. She knows she’s in the 7 range for most guys and will adjust her expectations accordingly (notice: girls automatically give themselves 1 extra point). This means you should generate at least the median income.

Girls in the 7 Range: Now you’re solidly in “cute” territory. This means the girl knows she’s relatively attractive and she will raise her expectations. You need to be in decent shape, have decent social skills and not be socially awkward. More importantly, since this is about money, you should generate at least 1.0-1.5x the median income to consistently get girls in the 7 range.

Girls in the 8 Range: Competition is heating up aggressively. Just like improvement, dating is not a linear curve. It is an exponential curve. Girls in the 8 range know they are attractive. They are approached all of the time and will raise their standards yet again. You need to be in shape, decent looking and have solid social skills. You also need to generate serious amounts of cash flow to stay in the 8 range consistently. This means you need to generate at least 3.0-4.5x the median income. It becomes much more complicated at these levels. If you’re doing great on all of the other items (looks, status, social skills) you only need to generate about 3x the median income.

Girls in the 9+ Range: Now we are in the upper echelon. Congratulations! Anything in the “9-10″ range is simply a girl everyone will say is gorgeous. In addition, she is likely your “type”. Meaning if you’re into Latin girls or if you’re into white girls, the lowest they will be called is a “9”. A 10 to you may be a Russian blonde, but if another person likes Asian girls she will be a “9”. These girls have an incredible amount of options. For all you know, they are already high end escorts for wealthy men in the 9 figure range. If you want to consistently compete at this level you need to generate 5-10x the median income. The range gets much wider depending on who you are. One thing is for sure. Extremely attractive women have a ton of options so they will not date men who are “average”. Anyone who believes otherwise is simply full of it. Good luck splitting a $40 round of drinks with a girl in the 9 range. You’ll get paved.

In Short:  You can calculate your worth pretty easily. If you’re doing fine in all of the three other categories and you can generate the median income… You can pick up girls in the 7 range consistently.

“As long as you have two commas in your bank account… You will always be a seven” – Wall Street Playboys

The quote above isn’t really a joke. If you have $1M generating ~5-6% returns you are making the median household income (post-tax) and will have no problem dating 7s. If you’re in the seven figure net worth range and cannot do this it means you either: 1) have serious social issues, 2) are out of shape and are in bad health or 3) are not spending any of it. The third piece is critical.

If She Can’t Experience It, It Does Not Exist

Repeat that phrase over and over again. If a girl cannot experience the money you have, it does not exist in her mind. This is why we continue to hammer down the importance of building a company *and* building a career in your 20s. If you make $1.2M a year but live in an RV located in Alaska… She’s not going to care about you.

The income requirements are based on money being *used*. If you generate the median income and use all of it, you will be able to date 7s without much trouble.

Location: As you can imagine, the median income requirements are based on *your city*. In major cities such as New York, San Francisco, Los Angeles and Miami, this is roughly $80-85K gross income. If you are living in a city where the median wage is only $1K a month and can spend $3K a month… You’re well into the 8 range. Income depends on your location. Everything in life is relative.

Net Worth Can Be Meaningless: In the extreme case where you are worth $5M+. But. Live in an RV… Girls will not care at all. If you are generating $250K+ in disposable income but spend $1K a month, you’re not going to get any girls. If you generate $250K+ in spendable income but you are *using it all* now you’re getting somewhere.

Create The Experience: This is where being well rounded will help you immensely. You should have many hobbies. You leverage these hobbies into interesting experiences which can include the following: 1) front row tickets to a concert, 2) tables directly next to the DJ, 3) large sporting events such as the Mayweather Pacquiao fight, 4) high end art events, 5) charity events where you are seen literally giving money away, 6) nice apartment/condo in the center of the city, 7) using a black car service at all times, 8) drugs and 9) anything else you can think of. If you don’t have a personality then you already know what to do… Get out of your comfort zone. No attractive girl is going to enjoy spending her time around a type A boring person. They want excitement and fun. Looking at a 10-year yield curve is no where on her list.

Boring City, Limited Upside: This is yet another topic we don’t see discussed much. If you live in a city that is boring and does not have much to do… You’re limiting your ability to leverage your income. This is absolutely critical. If you get into the 3x median income range and find that there is no way to leverage your income… It is time to leave! In addition, the cities with the least to do typically have the least attractive women! You can apply this across countries as well. If you live in the most popular city in country X you’re going to find that there are a lot more forms of entertainment and the “high end” has high caliber women (PHD, Lebain, Catch, 1Oak). Sure there may be rare “exceptions to the rule” but we don’t know many cities full of attractive women with nothing to do (you couldn’t pay us enough to live in Nampa, Idaho).

In Short: If she can’t experience it, it does not exist. If you are an 8 figure man and spend $1K a month you’re not going to obtain any leverage out of your cash flow. Find interesting hobbies and use them to meet the girls you like. If you can spend 3x the median income in your city and are not able to meet women, this is a clear sign that 1) looks, 2) social skills or 3) status needs to be raised immediately. Something needs to be fixed.

Why Over 80% of People Are “Below Average”

This graph explains everything in life. It explains income, it explains dating and it even explains life experiences. There is a massive positively biased skew to life and over 80% of people will fall below the average. This is simply reality.

Knowing that ~80% of people are going to fall below average you know that the girls are going to flock to the top 20%. This is shown on numerous college campus studies where 1/5 of the men receive the majority of the sex (Reiteration: join a college sports team if you can! Full ride + immediate status).

This ratio doesn’t change as you get older and likely gets worse! Particularly as you get into the 30+ range where many men have decided to marry and others simply gave up and settled for a life of mediocrity.

Staying Above Average on the Income Side: This one is easy. Read our post on careers and you will have a hard time being below average. If you put in your best effort based on what type of intelligence you have… You will make money at or above the average. This will give you enough income to spend *at least* the median level in your city and invest the rest. You’ll gain momentum over time particularly as your event and performance based income increases over time. In the interim… You are spending at or slightly above the median to maintain a normal and fun social life.

Use Money to Improve Your Looks: You cannot do anything about your height. You cannot do anything about your race. You can do a lot with 1) your build, 2) your hair style, 3) the clothes you wear, 4) your body language and 5) your diet. Instead of wasting hours and hours talking about things you cannot control, focus on the 5 items listed in this paragraph. Do the opposite of your peers and get a basic understanding of how to improve your looks. Use your money to get a solid gym membership, purchase some nice fitting clothes, stretch daily to improve your posture and of course use that money to buy premium fuel for your body (fruits, vegetables, fish oil etc.).

Use Money to Improve Your Status: This is straight forward. In a club environment, the easiest way is to become friends with the bouncer and bartender. Alternatively. You can go straight for the jugular and obtain the table next to the DJ. It simply depends on where you are in life. If you’re trying to compete with guys in the 8 figure range in the most expensive club in town on an investment banking associate budget… You’re going to struggle. This is simply reality. Find a venue that has girls you’d like to meet and calculate your relative status in that environment. If you will be in the top ~1/5 in the venue… It’s the correct venue to enter.

In Short: Life is a positively skewed bell curve. It is not a normal bell curve. The vast majority of people fall below average leaving an open field for those in the top 20%. This ratio only gets worse over time and if you can get into the top 2-3% you’ll be swimming in options. Sooner than later… you’ll be avoiding phone calls. If you have to go out of your way to meet girls and you are 30+… Something went wrong.

“But I Know a Rich Guy Who Struggles”

To wrap up this post, the most common rebuttal is someone saying “I know a rich guy who can’t get girls! Therefore money doesn’t matter!”

This is pure non-sense. We have provided a solid guideline to how much money you need to make…

For a 7: ~1.0-1.5x median income; For an 8: ~3-4.5x median income; For a 9: 5.0x+ median income.

The only way this equation *does not work* is if you violate the original premises laid out in the post. We simply have not seen anyone with normal social skills and an income of $250K+ complain about girls in NYC. If you are 1) overweight, 2) dress like a slob, 3) don’t spend money on experiences and 4) have horrible social skills, then you have broken the rules in this post.

Boring Type A Personality: This is the most common. Many, many, many people with high incomes do not have an interesting personality. This is why we recommend going out 2x per week when you’re young (Thursday & Saturday). This creates a baseline for your social skills. It forces you to improve. Under no circumstances do you live inside of a basement coding the next amazing app for 7 years straight. You deserve to go out at least two times a week. If you know someone who is a boring type A person but has money… You know what to do. Befriend them and try to see if you can create money together. If there is no business overlap and the guy is unwilling to learn basic social skills, stop returning his calls. Move on.

Simply Unattractive: You don’t need to be a model. You don’t need to be 6′ 3″ with blonde hair, blue eyes and a testosterone level of 1,000 at all times. You simply need to be the best *you* that you can be. If you are of average height but have a solid build, you’re going to be well ahead of your peers. Guys who are shorter but are built like “Greek gods” are going to do just fine (Frank Zane is a great example). Again. You do not have to look like a professional body builder either. Simply get your body fat into the single digits and put on extra muscle weight. As a review, here are the general guidelines (get to within 85-90% of these numbers):

Wrist Measurement Multiplied by (Number) to Obtain Ideal Body Part Metric: Chest:6.57x, Waist:4.57x, Hip:5.57x Thigh:3.43x Bicep:2.43x Neck:2.43x Calves:2.29x Forearm: 1.86x

Poor Style: This is honestly an epidemic. While obesity is certainly the number one epidemic in the USA, poor fit and poor style is second on the list. It does not take much to look nice! Simply find clothes that fit and put them on!

In addition, take the next step and also find what colors suit you best. We don’t know if you are Black, White, Latino, Asian, Indian or Middle Eastern (we also don’t care). But. Please find the colors that will match your skin tone best. Here is a quick and basic book on the topic.

In Short: The argument of knowing a “rich guy who struggles” is simply rationalization. The person is trying to find examples to prove he is correct. This way he does not have to take responsibility for his life or his decisions. The only group of people we see struggle with women (once they clear 3x the median wage) are… Type A boring people and extremely lazy slobs. If you go out 2x per week and stay in shape? You’re not going to end up in this camp.

Use this to filter out your friends. Anyone who tries to tell you money doesn’t matter… is rationalizing their failures. Take a mental note and slowly fade away from them.

Concluding Remarks:

This post focused primarily on income and dating. If you are extremely handsome “a male 10″ or have extremely high status in an area (DJ, Musician, etc.) then you can certainly break these rules. The overall premise, however, is the same. If you can spend 1.5x the median wage in your city (not save but spend on experiences) then you will have no problems dating in the 7 range. If you can get into the 5x median range and are in shape with solid social skills, you’re going to be sending girls into voice-mail consistently.

– For a 7: ~1.0-1.5x median wage ; For an 8: ~3-4.5x median wage; For a 9: 5.0x+ median wage

– If you cannot find a way to date attractive girls while spending 3x+ the median wage in your city, the problem is personal. You should be able to obtain dates easily by having better ideas, better venues (concerts, major events, private parties, charity events) and better logistics

– As you get older, girls expect you to make more money. When you’re young take advantage of this and prepare for the future. By 30 you should be at or above the median in spending power (bare minimum).

– “As long as you have two commas in your bank account you will always be a seven”

– If she can’t experience it, it does not exist. If your net worth is in the 8 figure range but you live in an RV and dress like a slob, no one will care.

– Location matters a lot for 1) determining median income, 2) potential upside in terms of experiences and 3) your ability to leverage your income to *your advantage*

– Money can improve your looks, it can improve your status (calculate the relative value of people at the venue) and it can even improve your social skills as you should feel much more confident in your personal value

– Dating and *life in general* is a positively skewed bell curve. Roughly 80% of people are below average. This is simply a harsh truth.

– Anyone who claims that money is irrelevant is simply rationalizing or is extremely young (has not seen the wealth impact yet). If they are in their 20s, they don’t know whats going to happen when the inflection point hits (around 30) and the long-term pain will come (40+).

– Avoid people who attempt to rationalize their poor decisions.

– Hat tip “blogging buddy” Financial Samurai for the post idea

– from the comments here is the “median” for the other three categories:

Looks: you are about 5’8″. You are roughly 13-15% body fat. You are not fat or skinny or ripped. You know how to wear appropriate fitting clothes. You look better with a shirt on than a shirt off at the beach.

Game: you don’t have social anxiety issues. You can spark a convo at a bar with girls or at a coffee shop. You do not have cold hard calculated regimens. A guy with incredible game can teach you a trick or two but you don’t *need* advice. You are socially normal.

Status: since you’re at the median it doesn’t hurt or help you. You are not a DJ, bartender, promoter, musician, gangster, or ball player. You are simply a typical guy in the environment. You are not able to push guys around with status symbols (tables, bottles, sports car).

Notably, we will not let the post degrade into a debate regarding “what is more important” (IE: Looks or game, money or looks, status or money etc.)

Why? It depends on who you are talking to.

If the girl is obsessed with music you are going to have a huge edge by being in a good band (status).

If the girl is a trust fund baby, you are going to have a huge edge by being attractive since she doesn’t need the money (looks)

If the girl is upper middle class and lives a boring life, your edge is going to come from entertainment/fun (game)

If the girl is dead broke and is a gold digger, you’re going to have a huge edge by being rich (money)

Just don’t trust them!

—-

If you took anything away from this post it is that cash flow matters! Money sitting in a bank collecting dust is not going to impress anyone. So if you want to 1) protect your assets, 2) grow your net worth and 3) continue generating solid cash flow we recommend signing up for Personal Capital to learn the basics of money management (the best part is that it is free to sign up!). Notably, this is only for our higher net worth readers (line drawn at 6+ figures in assets), for a full explanation click here. 

We have not done an overview in quite some time and needed a post specific to Wall Street. This will elaborate a bit on our hedge fund posts and provide an overview for those that are interested in Investment Banking (You will work closely with Leverage Finance at some point in your career). As with our many other overviews, please feel free to add any additional color. These posts generally rank extremely high with page views and low with comments as many of you Wall Street guys are introverted! Overview below:

 1) Introduction

2) Corporate Debt Securities

3) Purposes of Debt Instruments

4) Lending Side of Leveraged Finance

5) Credit Analysis

6) Investment Considerations

Introduction

Unlike the equity market, the credit universe captures a huge variety of security-types.

Why? It encompasses (pretty much) every other sort of financing. The size and complexity is also magnitudes larger than the equity market (roughly speaking the US bond market is 3x the size of the equity market!!!). As such, we’re focusing on perhaps the most significant portion of the credit markets to institutional (i.e., HF / PE) investors: the leveraged finance market (LevFin).

We are focusing on LevFinfirst for the following key reasons:

Depth Instead of Breadth: We could give an overview of the entire credit market at a much higher level, or we could explain part of it really well. We prefer more quality and of course *actionable and useful* information.

Single Markets Make Descriptions Easier: Fundamental credit analysis is best introduced within the vacuum of a single market segment and a limited number of security-types

Cross Sectional Leverage: As noted above, LevFin is useful to the largest cross-section of our Wall Street focused readership. Almost all front office Wall Street careers are guaranteed to involve at least some exposure to and interaction with LevFin in one form or another. Better to learn the basics now so you don’t have to deal with it later.

Corporate Debt Securities

As many of you know, corporations have three basic ways of securing financing: 1) debt, 2) equity, and 3) hybrid securities. We’re only concerned with credit for now,  so we’re going to ignore equities, hybrids and other more complex securities.

Corporate Debt Securities (In rough order of seniority)…

Revolving Credit Lines (Revolvers / Short-Term Financing):  Simplistically a corporate credit card issued to a company by a bank. Companies are allowed to draw on and repay revolvers as they please. They are usually secured by a Company’s cash flow, meaning they always have to be 100% repaid before any other non-mandatory debt prepayment. As a result, revolvers are the cheapest form of debt financing.

You will find many of these instruments outlined in SEC filings. Simple example? Companies access the revolving credit facility when there is a short term swing in cash flows. They access the facility for the temporary operating purpose and repay the debt.

Ford is a great example (Page 67 of 10-K filing), emphasis is ours.

“We target to have an average ongoing Automotive gross cash balance of about $20 billion. We expect to have periods when we will be above or below this amount due to (i) future cash flow expectations such as for pension contributions, debt maturities, capital investments, or restructuring requirements, (ii) short-term timing differences, and (iii) changes in the global economic environment. In addition, we also target to maintain a revolving credit facility for our Automotive business of about $10 billion to protect against exogenous shocks.”

Other types of short-term / senior-most financing can include: 1) Swingline Loans, 2) Bridge Loans, 3) Commercial Paper, 4) Letters of credit (LOCs)

Loans (Term Loans / Amortizing Loans):  Exactly what they sound like! Loans issued to corporations by banks (which in turn usually syndicate the loan to other banks and institutional investors so as not to keep too much risk on their own balance sheets). They require full payback over periods of anywhere from roughly 3-9 years. These loans usually include restrictive covenants as well since they are ranked second in overall seniority.

Unlike Revolvers (cash flow), Loans are secured by a lien (claim, or first right) on the value of a company’s assets in bankruptcy.

Here is an overview of the various types of term loans:

Term Loan A (TLA / Amortizing Term Loan / Senior Secured:  This is the most senior Loan type. Secured by a priority lien on the Company’s assets. Amortized evenly. Syndicated to banks. Lower interest rates. Maturities <=6 Years

Institutional Term Loan (TLB / Term Loan B/C/D / Senior Unsecured): Junior to TLAs. Either unsecured, or secured by a lien that is typically junior to that of the TLA (in bankruptcy, they only get right to corporate assets once the TLA lenders have been repaid first). Amortize partially with bullet repayment schedule. Syndicated to both banks and institutional investors. Higher interest rates. Maturities range is roughly 3-9 years. There are two major types of TLBs worth mentioning:

2nd Lien Loan: Specifically refers to TLBs with a junior claim (2^nd lien) on corporate assets and

Covenant-Light Loans (Covi-lite): Loans that have more relaxed, bond-like financial covenants rather than maintenance covenants that are typical with loans. Usually issued in “seller’s markets”, as companies can get away with more relaxed covenants when investors have excess cash to invest.

Bonds: Even the masses are familiar with this one. About as vanilla as debt securities come. The lender purchases a bond from the borrower in exchange for periodic fixed interest (coupon) payments (hence the term “fixed income”) principal repayment at maturity.

Broadly, there are two types:

Investment Grade:  Bonds issues by companies considered investment grade (BBB- or higher)

High Yield (HY Bonds / Leveraged Bonds / Subordinated Notes / Junk Bonds): Bonds issued by companies rated BB+ and lower. Carry much higher interest rates than Investment Grade Bonds

Mezzanine Financing (Mezz): Here we won’t go into too much detail as we’re knocking on the hybrid securities arena. But here are two basic bullets on the topic:

Hybrid-like debt financing, also called “in between” debt which ranks above equity but below other debt in a company’s capital structure

Typically high-yield subordinated debt coupled with equity warrants (“equity kicker”)

Leveraged Finance: Within the context of the credit market, “Leveraged Finance” involves any debt financing in which a company is financing with more debt than what is considered normal for that company or industry (overleveraging itself) relative to earnings and cash flow. This is certainly a vague line to draw.

What’s more than normal? There’s no set answer. But. Some rules of thumb are based on interest rate spread cut-offs (anything > LIBOR+125-150bps), ratings (anything BB+ or lower), and leverage ratios (Net Debt / EBITDA) relative to industry comps. Typical LevFin issuers include sponsors, fallen angels, company’s exiting bankruptcy and startups that need seed capital.

If you work in a specific sector (A Detailed Look at Financial Institutions Group; Overview of the Consumer Sector; Overview of the Healthcare Sector; Overview of the Oil and Gas Sector;  A Detailed Look at Technology Media and Telecom (TMT)... also find Part 2 here) You will find various rules of thumb to add to your definition of “over leveraged”.

In Short: There are several types of debt/loans and the seniority is as follows: 1) Revolving Credit, 2) Term Loans – followed by B’s C’s and various levels of security, 3) Bonds, 4) Mezzanine Financing and 5) Leverage Finance.

Purposes

What is more telling than interest rate cutoffs or leverage benchmarking? What is the company *using* leveraged financing for?

Overleveraging is a risky and expensive proposition, so it is typically used for specific projects in which the borrower feels the potential upside from the project is high enough to justify the increased cost of capital. This increased leverage generally comes with restrictive covenants particularly in an aggressive leveraged finance investment. Examples of such project include:

LBOs: The business model of Private Equity. The increased leverage is justified by the increased returns on equity possible once the debt is paid down. The simplest example… even for your “Average Joe” is the purchase of a fixer upper home. He puts down a minimal down payment (over leverage) then tries to fix the asset and sell it for a profit (or generate higher than expected cash flow to more than offset the monthly payments).

If you want a basic overview of a real estate LBO/private equity investment we have one here and if you’d like to look at company specific ones… You’ll have to wait! Generally for a company there is ~10-20% equity and ~80-90% debt, heavily leveraged and you’re looking for a 20% annual ROI (yes the typical definition is 90% debt and 10% equity but we’re expanding the range to encompass more transactions)

M&A / Capital Expenditures:  If a company identifies an attractive enough acquisition target or capital investment opportunity, they can justify the leverage based on the synergies and growth opportunities they think a potential investment will provide them.

Re-capitalizations:  Equity holders will leverage the Company in order to use the proceeds for a dividend, stock repurchase, equity infusion, or any other transaction that will significantly impact a Company’s debt / equity ratio. Recaps are used when the company’s current capital mix is equity-heavy enough to justify allowing equity holder to liquidate of portion of their stake

Refinancing: Investment grade issues will use Refis to take advantage of periods of low interest rates in order to swap their existing debt out for *new*… Cheaper debt. Companies that use LevFin to refinance, are likely facing a maturity wall, cash flow shortage, or upcoming default event.

Refinancing using the LevFin market is somewhat of a “last resort”. But. Lacking other options, companies prefer expensive debt that’s matures 7 years from now over cheaper debt that matures tomorrow that they don’t know if they can repay.

In Short: Leveraged Finance is expensive debt that’s usually tied to a specific purpose. It is crucial to understand what the financing is being used for as the reasons for the financing will determine what investors are interested in the debt instruments.

Lending Side of Leveraged Finance (Lenders / Investors)

Leveraged Finance includes three of primary security-types: Institutional Term Loans, High Yield Bonds and Mezzanine Financing. These are typically the only debt securities with high enough yields to attract institutional investors. As such, they are the focus of a majority of institutional credit analysis. This brings us to the other side of the LevFin market: who the investors (or lenders) are.

In contrast to the low-risk Investment Grade debt market (largely funded directly by banks themselves), lenders in the LevFin market are typically institutional investors seeking to generate a higher risk-adjusted return.

Besides banks and finance companies, they include:

1) Hedge Funds: Debt focus; 2) Niche Private Equity Shops: Specifically, Mezzanine funds, 3) Traditional Institutional Investors:  Pensions, Endowments, Insurers etc.

And finally…. The most infamous example…

4) Collateralized Debt Obligations (CDOs): The perpetrators of the 2008 Financial Crisis (partial joke for the intense finance readers). A CDO is essentially a corporate entity that is set up in order to buy a slug of debt securities and pool them together. CDO investors then buy stakes (liens) in that entity, which gives them a right to the cash flows from the debt purchased. The CDO is cut into slices (tranches) based on seniority, and investors pick which tranche they want to invest in based on their risk-return preferences.

The debt payments are then paid out to investors in a waterfall fashion, with those who bought the more expensive senior tranches being paid before those who bought the cheaper and higher yielding junior tranches.

Finally, to give you an idea about sizing: the HY  Bond market is ~$1.4Tn, the Leveraged Loan market is ~$625Bn, and the Mezzanine Finance market is ~$500Bn. So all in, LevFin is about a $2.5Tn market!!! There is a lot of money out there!!!

In Short: When you start looking at “over leveraged” investments you begin talking to more and more risk loving investors. Or as they like to call themselves “sophisticated investors” (please tell us you got that joke!). The market is huge at $2.5Tn and you will certainly deal with the LevFin market at some point during your career.

Credit Analysis

Whether you are investing in equity or credit, you are evaluating whether or not a given company is worthy of an investment (stating the obvious we know). That is, if you give XYZ Corp. some of your money now, is XYZ likely to give you your money (and more) back in the future. The biggest risk in both cases is that you are not paid any of your money back.

Alternatively? You are not paid the “appropriate” amount of money back for the amount of risk you took on.

The difference is in the potential upsides? For equity investors, upside is unlimited. For credit investors, the upside is contractually limited.

Credit investors are guaranteed their upside, so their biggest focus is on the risk of not getting paid back. Since their returns are capped (fixed income), they spend a lot more time caring about the nature of the actual security that they are investing in. Where does it fall within a given Company’s capital structure? Do they believe the Company will be able to afford their interest payments? Will this lead to an eventual return of principal? They aren’t nearly as focused on earnings or the income statement as a whole. instead. They focus much more on the balance sheet and cash-flow statement.

While credit analysts end up covering the same companies as the equity analysts… They spend almost all of their time on different things.

Credit analysts also find themselves working on unique and complicated situations that the equity analysts often avoid. This includes restructuring, asset sales and joint ventures. It requires hours of reading through bank covenants and other financial documents which most equity analysts don’t have the time to do. In order to predict cash flow, you still have to be able to predict revenue, so you do spend a decent amount of time on revenue and costs as well.

In Short: Credit investors have much less upside relative to equity investors. They are looking to secure a defined return and want to mitigate risk to hit their specific benchmarks. Therefore, a credit analyst would look at a security in a different light relative to an equity analyst.

Investment Considerations

Given that credit investors will look at investments in a different fashion… Below is an outline of some of the key takeaways:

Default Risk:  The likelihood of a borrower’s being unable to pay interest or principal on time. Based on the issuer’s financial condition, industry segment, conditions in that industry and economic variables/intangibles (company management as an example). Default risk will, in most cases, be most visibly expressed by a company’s public credit rating from S&P, Moody’s and the like.

Loss-given-default Risk: Severity of loss. How much will the lender lose in the event of a default? Investors assess this risk based on the collateral (if any) backing the loan and the amount of other debt and equity subordinated to the loan.

Industry Sector: Loans to issuers in defensive sectors (like consumer products) can be more appealing in a time of economic uncertainty, whereas cyclical borrowers (like chemicals or autos) can be more appealing during an economic upswing.

Sponsorship:  If a sponsor has a good track record, a loan will be easier to syndicate and can be priced lower. In contrast… If the sponsor group does not have a loyal set of relationship lenders, the deal may need to be priced higher to clear the market.

Liquidity:  All else being equal, more liquid instruments command thinner spreads than less liquid ones.

Market Technicals:  If there are a lot of dollars chasing little product. Then… issuers will be able to command lower spreads. If the opposite is true? Then spreads will need to increase for loans to clear the market.

In Short: Credit analysts focus more on *downside* risk. Why? Well the upside is already capped at X% return so that is already set in stone. What is not set in stone? The downside of a default and overall payment risks.

Concluding Remarks

Since this post is heavily tailored to Wall Street specific individuals you probably read the entire post. That said here are the main takeaways in bulleted form as requested:

– You will likely work with the Leveraged Finance team at some point in your career. That said if you’re interviewing for one you now have an overview. Two birds. One stone

– The LevFin market is huge at $2.5Tn

– Several types of debt/loans and the seniority is as follows: 1) Revolving Credit, 2) Term Loans – followed by B’s C’s and various levels of security, 3) Bonds, 4) Mezzanine Financing and 5) Leverage Finance

– It is crucial to understand what the financing is being used for as the reasons for the financing will determine what investors are interested in the debt instruments

– When you start looking at “over leveraged” investments you begin talking to more and more risk loving investors or “sophisticated investors”

– Credit investors have much less upside relative to equity investors. They are looking to secure a defined return and want to mitigate risk to hit their specific benchmarks

– Credit analysts focus more on *downside* risk. Why? Well the upside is already capped at X% return so that is already set in stone. What is not set in stone? The downside of a default and overall payment risks

—-

*** Please feel free to add additional color and comments. We know most Wall Street folks do not like to comment however if it is valuable we have no problems adding it to the main section of the post (we have done this many times in the past). Alternatively? If you’re interviewing for LevFin or you’re looking to break into the Street be sure to flip through this article. Thank you and good luck with your investments/interviewing/career***

We’ve gotten some mail regarding our requirement for posting here. Which is a $1M+ net worth and at least 5 years of front office experience. For some, this seems “impossible”. But. The math simply doesn’t lie. If you’re 27 years old and you’ve made Vice President in a revenue generating role, you’re already making ~$500K per year (yes we’re back to 2006 compensation levels already). In less than 3 years you’d have at least $600K assuming you saved $0 during the years you made ~$200-300K per year. Enough of that. We’re going to outline a step by step process for *anyone* to generate $1M in net worth even if you *don’t* want to work on Wall Street. Will it be easy? No. Nothing worth doing ever is.

1) Job, Career and Business

2) Building Transferable Skills

3) The Quick and Dirty $1M Math

4) Targeting and Selling to the Right Market

5) The Only Sale That Matters is the One that Converts

6) Cruise Control and Real Work Life Balance

JOB, CAREER AND BUSINESS

If you found this blog you’re in luck. You can easily tell the difference between a Job, Career and a business as follows: 1) Job: Trading time for money (Hourly wage or fixed Salary), 2) Career: trading performance for money (Income is primarily from performance. Delivering results.), 3) Business: You have created an establishment that will make money while you sleep (product sales, outsourced work flow)

That summarizes every single position in the world. 80%+ of people will not understand the paragraph above (luckily our blog is targeted to the 20%) and they will continue to trade their time for money. This makes it impossible to become rich and around 33-35 years old they become bitter/jaded as they did not hit their goals.

Job: A job is only acceptable as a temporary position. You can take a job only under the condition that it is 1) not minimum wage and 2) you can transfer the skills to your future career or business. No exceptions to this rule.

People who are willing to work for free are *begging for help*. In addition? The only person willing to hire free labor does not have the power to afford *quality* paid for labor. How are you going to learn from someone who can’t even afford to pay you $15-20 an hour? You’re a human being and deserve to cover your bills even if you are learning for the most part. Besides. If he’s willing to pay you? He’s thinking of ways to leverage your skills long-term as he finds what type of intelligence you have.

To drive the point home. If you’re even thinking about taking an unpaid position, we’re going to assume you’re lazy. Why? If you’re actually willing to work hard (60-80 hours a week when you’re young)… Then? You would have put in the time to find a position you *would* be paid for! Doesn’t get much simpler than that. The only person who is willing to work for free is simply a fool.

Perhaps there is an exception to this rule? We haven’t seen it. Maybe if you get to work with Warren Buffet you can go ahead and work for free. But. Working for any large company for free (or even worse a small one) is simply a bad move. Your time is worth at least $15 an hour.

Career: A career is a performance based position. Do not be fooled by high salaries or high hourly wages. Even if you’re making $100 an hour that is only $200K per year. The Company will do everything in its power to prevent you from making more money than that.

The deadliest company trick in the book is paying someone *more than they are worth* in the early years (22-27 years old). Then… proceed to pay them *less than they are worth* as they remain at the Company. This is a classic move done in high salaried positions such as consulting. Dangle the carrot of making partner, burn them in their early thirties. One out of ~40 make the partner jump and get that equity. You see this trick time and time again in many industries.

Reiteration: A career is a performance based position.

Many careers (pure sales in particular) provide extremely *low* salaries with large performance upside. Think 30/70 split where 30% of your compensation comes from salary and 70% comes from performance fees on a quarterly, semi-annual or annual basis. Absorb the pain. The beauty of a sales role is that the skills are transferable into *any* industry! If you are good at sales you will always have income. If you can convince someone to fork over $50K for an enterprise B2B product, you’re going to have no problem selling cars if you hit a rough patch in your life.

The second variation of performance is *equity*. This is where the engineers come into play, not the ones who work solely for a capped salary. Equity is just a cute word for ownership. You are in a performance based position because your net worth is directly tied to the valuation of the Company you work for. If you can expand the Net Income line by $100K… and it obtains a 10x earnings multiple… That’s a million bucks. Just make sure you’re able to negotiate a fair slug of equity so you get more than $2 of that $1M valuation increase.

Business: In this situation you leverage all of your skills. Every single talent you have is poured into your business. A business is something that makes money even as you do nothing. Of course if you do nothing for multiple years it will likely die. But. You’ve created a system that makes money in your sleep.

Etch this quote into your brain: “You are hardworking or you’re smart. You cannot be both.”

When you have no skills, you’re forced to become hardworking. You’re killing yourself day in and day out to learn valuable transferable skills. Eventually, you have learned enough. You jump from working hard to leveraging all of your talents into scaling an actual company/business. At this point, once you’re generating meaningful revenue, you’re looking to *hire* hardworking people who don’t have the skills to start a company *yet*.

This is a huge jump. The building phase takes a lot of effort and once you’re generating a meaningful amount of money… you need to be able to *spot* talent. If you can do this, they will help you build a meaningful business.

After they learn the ropes? They will probably leave to start their own venture. Long-term, you both win.

In Short: If you’re young, you may need to take a job to build small skill sets to get into the career you are longing for. Once you hit age 22 you should not work in a job ever again. Business or career only. In our opinion, it is best to learn the ropes in a career for at least 3-4 years before starting a business. If you’re already running a scalable business, then this entire section could be skipped!

BUILDING TRANSFERABLE SKILLS

Now that you’ve got the framework… It is time to define what a “transferable skill” is. In short, a transferable skill is an *intangible skill*.

Funny. Many people think that tangible skills are the best but those can be outsourced. We talk about this a lot on the blog. Anyone can learn how to build a financial model. Anyone can learn how to read a graph. Anyone can copy and paste numbers from an SEC filing. Anyone can do basic arithmetic. In short, if it can be learned in less than a month it’s *not* a transferable skill.

Transferable skills are any skills that are unique to you. A simple person to person example? A fast twitched athlete would be unique to you. This would directly oppose a slow twitch endurance athlete. Neither is good nor bad. They are simply unique to you and your development of them will determine how good your talents are.

On a more important note, lets focus on transferable skills for money making:

Sales: You already knew this one was coming. If you’re good at sales you will always make $200K+. Emphasis on good. You sell to people with money (primarily older women worried about their fading looks) or you sell extremely expensive items to wealthy men. That’s generally how the market is split up. If you are good at sales you are not selling to your typical middle class man. Why? He is usually a weird frugal guy who refuses to buy anything. You sell to either women or you sell to wealthy men who are willing to pay a premium for high quality products/services.

Networking: This is somewhat similar to sales. The only difference is that you don’t need to transfer a feeling. It is a lot easier than sales. Become a trusted source of good information. Then? Link two people who will *mutually* benefit. You will collect a commission for doing this. Why? It has a lot of value. If you’re able to realize that Person A needs Person B’s skills… And you’re the person who figures it out? That skill cannot be taught. It is valuable and not replicable by a sweatshop in India.

Production Improvement: This is *largely* overlooked. Many people say “I can’t think of a new idea or product”. So what? It doesn’t matter. What about improving the actual efficiency of the product or business. This is either on the cost side or on the revenue side of the equation! If you tell a company that you can reduce its costs (Total Cost of Ownership = TCO) by 25% at a cost of just 5%? They are going to hand you money. On the other side… If you can improve their sales funnel that results in a revenue increase of 5-10%? They will pay you a few hundred basis points for that product. You don’t need to recreate the wheel. Make the wheel run smoother.

Basic Maintenance: The most obvious example would be property management. Creating a quick stream of income in a niche neighborhood and managing properties for wealthy individuals. Once you gain the trust of a few wealthy men? They will refer you to other wealthy individuals looking for some monthly income. Once you’ve gotten the tasks down (insurance, good tenant screening, solid marketing of each rental property) it becomes a easy monthly paycheck. Notably, you can do this for many other industries as well. Just look at TaskRabbit as an example of outsourced services for menial needs.

Continuity: Ah yes, the holy grail. You affiliate marketers who keep visiting the site from StackThatMoney are all nodding in agreement. You’re able to private label your product and you’ve set up a monthly rebill. All your income comes from the re-bill and gaining the customer is the real headache. The manufacturing of the product is meaningless since anyone can set up the infrastructure in China (even an imbecile can do this!). The real skill is getting the quality up, getting the sale up and making sure other people don’t try to steal all of your market share.

The best example is one everyone knows of… NetFlix. Probably the best re-bill on the planet.

In Short: We don’t know what you’re good at. Maybe you’re better at creating the product. Maybe you’re better at selling. Maybe you’re better at improving efficiency. We simply don’t know. What we do know however, is that you need to find your niche skills and begin leveraging them. Time is not on your side and if you waste it trying to target meaningless niches you’re going to go belly up in a hurry.

THE QUICK AND DIRTY $1M MATH

Many people skipped the first two sections and jumped here. A million bucks in 10 years is not that difficult. We would wager that you’ll clear this figure in 7-8 years instead of 10.

“Can’t be too upset as I’ve made it many times over already based on your benchmark of 1 mil by 30, but had to stop for a moment to think about how much more could have been achieved if I had read this post 10 years ago“ – Stealthy1Percenter

Before we simply brush off this number as easily obtainable we’re going to outline the requirements here. Assuming you start at $0.

1) Give up three years and you will be free; 2) You will not work less than 70 hours a week for the *first* 3 years; 3) You will have two forms of income by year 5-6 at minimum; 4) You will not waste your time fixing weaknesses and will focus on your strengths; 5) You will not try to regurgitate another product unless it is *the only* product and you will take second place (Pepsi vs Coke as an example)

If you break one of these rules you’re unlikely going to succeed. We’re not too worried about your spending habits or your current skills because it is incredibly easy to make $100K a year if you work 70 hours a week for three years. After year three you will be efficient and you won’t crack more than 50-60 hours a week unless you made bad decisions. Besides. To make $100K a year you only need to make ~$27 an hour. A typical career will pay you north of $100K out the gate if you’re in a major city. If not? Well follow the path below anyway:

Year 1: As stated above. Your first three years are going to be dreadful. You will encounter many battles with self doubt. You will fail many times over and over and over again. You will work hard. By the end of year one you will realize that the only people who watch motivational videos are losers. You will fade into the abyss as you are forced to drop contact with many people due to your rigorous work schedule. In year one here is your goal. Find your talent. Only in year one are you allowed to work a “job”. You will likely work *two* jobs if you haven’t found a career yet. You work in one that is focused on Intent (sales, people connection) and you will work in another focused on Synthesis (networking, efficiency). Once you find out which one you’re good at, you jump into that career. Net Income: $80-100K. Net Worth ~$40K.

***Note: Numerics is left off. If you are good at numerics you don’t need to find where your talents lie***

Year 2: You are now in a performance based position. It does not matter which type of performance you choose. You are simply leveraging *your* talents. Do not listen to what other people are “telling you to do” you’re following *your* talents. Why? The masses don’t know anything anyway! By year 2 you must have a career at *minimum*. If you’re extremely talented go ahead and jump into business. But. Generally, you’re going to spend a couple years in the career zone. You work on your business ideas on the side. Finally, if you’re only working 50 hours a week, find a side job for another 20 hours. Don’t settle and break the rules. Expected Income: $120-140K. Net Worth ~ $80-100K.

Year 3: The last two years have been awful. You feel like you haven’t accomplished much but in reality you have. Your skill set is currently being honed and you’ve got some money in the bank to show for it (likely near $100K). For some, you’re going to spend more time on a side business (section 2 on using your transferable skills) while others still need a bit more time in their career. This is typically a dark and boring year but you’re much more efficient. 70 hours are clipped and you’re only up about 10%. Expected Income: $135-155K. Net Worth ~$150K.

Year 4: By now you know what you’re doing. You have at least one idea for a business that is based on your transferable skills: Sales, Networking, Production Improvement, Basic Maintenance and Continuity. In an ideal world everyone hits the continuity button! That said, you’re now going to focus about 45 hours into your career and that remaining time is going to be spent on your side business idea. You’re going to see a minimal increase in earnings for the year and build up a brand/reputation. Expected Income: 150-170K. Net worth ~$225K.

Year 5: This is typically a banner year for those in a serious career. Around year 5 you’re finally generating real revenue for a firm. You are also hitting your stride in efficiency. If you’re still working 60+ hours a week then you’re either a poor employee or you are not well positioned politically within the firm. When you make the leap on Wall Street this usually means a 50% move in compensation. If not? Well you’re still in the low 2s range. Since we don’t know a person’s specific career path we’ll assume another 10-15% move as you’re still spending a good 20 hours or so on your side business. Expected Income: $170-200K. Net Worth $310K.

Year 6 – 8: Now we’re into the good years. You should be hitting your stride and getting ready to pull the event button soon. If your side business has been growing for about 3 years, this is usually where the traction starts to show up. If you wasted your time trying to copy products or you wasted your time targeting niche fields with no money… You’re going to be in pain. Since you’re reading this post we assume you didn’t make that foolish mistake and you’ve got traction. Either A) it’s now generating a decent amount of money for you ~$50K or B) you’re realizing the growth is outpacing your career income growth! You either quit or gather a team so you can have two forms of income (we suggest gathering a team, but if you’re real greedy… quit and go it alone). Your income should continue to go up by about 10% but we’ll flat line you at $200K + $50K from the side… You’re saving $125K easily. Expected Income: $250K. Net Worth: $685K as of year 8.

Year 9 and 10: Well you’ve made it already. By giving up three years of your life (pretty meaningless since your early 20s are the most energetic years) you’re now a millionaire. You’re about 31 years old and you put away another $250K + market returns on all of your investments. We can squabble all day about how much you will actually have at 30. But. In reality, $1M by thirty is easily attainable with this game plan. In fact we’d go ahead and say you’ll *exceed* this number over the course of a decade. Using Wall Street as an Example by 27 years old you should be at the $350-500K marker and that alone will push you over the next 3 years. The real smart ones simply build that second form of business income and throw it into the bank. $50K a year is an easy sum to achieve even if you are lazy and decide to write copy on the side. Expected Income: $250K. Net Worth: $1M+… Call option with an *event* sale of the company.

In Short: Now you realize why it is important to put the big blocks up first. If you’re trying to catch someone who is already in year 5 of the described plan you will be hurting. Year 1 effort is always significantly harder than year 5 effort from an energy standpoint. In addition, this is a clear step by step year by year outline of how to leverage your skills to make money. Don’t bother listening to other people who claim it is not possible because they are not willing to put in the work.

Find that career. Find that side income. Scale. The side income will *more likely than not* be neck and neck with the career income by year 8 on the time-line. Will happily bet money on that one.

TARGETING AND SELLING TO THE RIGHT MARKET

Now that you’ve got the 10 year *blueprint* lets make sure you don’t throw up a huge mistake on the side income piece of the equation. The career debate is already dead as you simply look for performance based income. Anyone arguing for hourly wage non-sense is simply drinking far too much kool-aid.

How Do You Find the Right Market?

1) The Right Market is Willing to Spend Money: The word choice here is critical. This is also why we laugh when people try to target middle class men for money. Middle class men are generally cheap guys who are having their money spent by their wives (hint right there). The “right market” is the market that is going to spend the money. Not necessarily the one that is making the money. If your buddy is making $100K a year but he’s the same guy haggling for a $10 discount for his broken iPhone screen… He’s a tough guy to sell to. If your friend is hitting 28 and she’s single looking to find her man by maximizing her looks… She’ll be easily sold to (okay enough with the hints you already get it)

2) The Right Market is the Masses or the 1%: Those are the two segments. Rich men are willing to *pay up* for quality and status. This is why Ferrarri’s exist and this is why the largest companies in the world cater to the high end or they cater to your regular Joe Blow (80% of the population).

Generally speaking, a rich guy knows that he gets what he pays for. But. He is also smart. He will research your product and prod with intelligent questions.

Average Joe is the reverse. He is driven by emotion and will buy based on how he feels. If you can make him “Feel good” or make him think something will “easily solve his problems” without doing work… He’ll buy. This is exactly why products sold to the masses come with ridiculously idiotic statements like “guru’s hate him” “this one weird trick” “research science approved” (typically unrelated) so on and so forth. Joe average is going to buy based on feeling. This is why he likes motivational junk, quick fixes, and of course pain.

3) The Right Market is Sold in the Right Way: As long as your product is legitimate should you care about the sales technique? No. So long as you’re not doing anything illegal it does not matter “how it is sold” the only thing that matters is *if it converts!*. Remember this when you’re starting to sell your product.

Rich People (top 20%): If you’re targeting smarter and richer people (this blog) you’re not going to use phrases like “one trick!”, “approved by Kim Kardashian” so on and so forth. You’re going to have to spend a lot of time building a brand before even mentioning products you use. Even then? Simply disclose you make a few bucks off the recommendation.

Average People (bottom 80%): Now… If you want to make money faster… You’re targeting Jane regular. Yes we’ve switched to Jane regular for a reason. The number one complaint about women is as follows: “women are emotional”. This is a wet dream. This means they are easy to sell to! If a person’s mood is easily influenced… It means that they are easily convinced to buy!

Take it to the extreme. If you’re trying to sell to a Monk or a girl who is scared of losing her looks… Who’s easier to sell to? The answer is easy. The emotional one. The girl.

Reiteration. So long as your product works and does as advertised, it does not matter how you sold it. An emotional person is *not* going to respond to logic and reason so don’t use it! Type in 8th grade level English and make the sale. There is no value in using “verbose” language. Funny. Even with the word “verbose” in quotes it looks like a junk sentence.

In Short:  You’re really looking for three things. You’re looking for people who will actually spend money. You’re looking to target a lucrative market. You’re looking to sell “correctly” and the correct sale is an emotional one. This is the topic of the next section.

THE ONLY SALE THAT MATTERS IS THE ONE THAT CONVERTS

The best part about this section is we *can* give you “one quick trick”. Stop trying to sell with logic. Start selling with emotion. This is the most mind boggling concept for people who focus primarily on numeric based skill sets. Engineers and Quants in particular attempt to apply logic to humans and it simply doesn’t work. People make their purchasing decisions based on emotion and feelings. This applies to wealthier people as well. The only difference is that the wealthy person *does research* and makes sure he clears enough “utility” from the purchase.

“A person is in Pain or they are seeking Pleasure. Provide a solution to get rid of the pain or provide a solution to obtain pleasure. That is how you sell” – Wall Street Playboys

Generally speaking, pain sells more. Everyone knows this. This is why men who seek money will shell out thousands of dollars for get rich schemes and women who seek beauty will pay top dollar for any physical improvement. That really boils down the two sexes in a single sentence. Men want money to elevate their worth. Women want looks to elevate their worth.

Now that we’ve given you the “trick” to selling… It is 100% easier said than done. You must communicate at a much lower level to sell to the masses. Do not bother with insane vocabulary. Do not bother with logic. Do not bother with statistics.

The typical phrase is “Keep it Simple Stupid” or (KISS). You can go ahead and remove the first S in that equation when targeting the masses. Keep It Stupid (KIS). If your sales page or advertisement cannot be understood by a 12 year old… It is not a good advertisement. Lets look at some examples:

Infomercials: Infomercials are not there for fun. They are spending money on the airtime. Notice… What products are being sold? Primarily: 1) lazy products, 2) depression/insomnia products and 3) alcoholic recovery products.

Lazy Products: This makes complete sense. The type of person watching lame infomercials is likely a stay at home mom or a lazy person. They see a “cool gadget” that will save them 5 seconds on dicing tomatoes… This gives them an extra 5 seconds to watch more television! Hooray!

Depression/Insomnia Products: This also makes sense. A lot of *late night* infomercials are targeting people with sleeping issues. Someone is up watching TV all night at 2 in the morning. Typically, before these commercials come on, at around 10pm or so they have “dating products” because if you’re at home watching TV on a Friday/Saturday night you’re likely lonely.

So sign up for eHarmony! Then when the viewer has not taken action and feels depressed at around 1am… Boom! Here are some depression/insomnia medication products!

Alcoholic Recovery Products: The last subset is the alcoholic recovery section. A lot of people come back from another depressing night out trying to score at the bar and stumble onto their couch to watch TV. Many of these people have serious alcohol issues and the infomercial is right there to “save them”.

Pleasure Commercials: This is obvious and you don’t even need to read this section. Go watch the commercials for any major sporting event and you’ll primarily find beverage and insurance commercials. Alcoholic commercials are clear as day. You’re watching a fun event. You want to be entertained. Nothing better than a “cold one” to increase your pleasure.

Alternatively, there is the insurance side. You think this has nothing to do with pleasure? It does. In fact it’s *both* pain and pleasure. The other main audience (besides younger people watching for fun) are middle aged people with families. They constantly think of their kids (they probably play the sport as well) so here’s a great way to take a hold of your family. Get solid insurance in case anything happens (fear of loss, family combined with pleasure, feeling responsible).

Now if these examples were “obvious” then you’re in great shape. It’s time to create your own ads! Learn how to write good copy and see how good you are. Be warned. This is easier said than done.

If you’ve watched ads and wondered “why in the world is that a popular ad” you’re going to “un-learn” those thoughts! Chances are… if the ad is on prime time television… it is Return on Investment (ROI) positive.

We’re not kidding when we say Keep It Stupid instead of Keep It Simple Stupid.

In Short:  The primary lesson here is the same. It does not matter “how you sell” so long as the product is legitimate. If the best advertising technique was to show overweight people mud wrestling on television… You should do it (note: never works!). The only good advertisement is the one that *converts*.

CRUISE CONTROL AND REAL WORK LIFE BALANCE

Now that you’ve read this post and everyone who sees this is a millionaire (joke) it’s time for a more serious matter. Real work life balance.

If you’ve followed this path and find yourself with a solid 7 figure net worth and multi-six figure income streams you’re allowed to find balance. For the vast majority of people, they have not earned this right (yet). They should align their ducks and get to work.

Once you feel comfortable, you should now focus on your health and the power of 1%.

Health: No lies. During your first 3 years, your health will likely suffer a bit. You’re going to work so hard you will *actually break* at least once. Once you reach this limit you’ll know when you’ve gone too far. After a good 5-6 years of nearing the line but never crossing it… You should now shift your focus to *maximizing* your health. Again and again. While money is immensely important, the reason why you have it is to keep your health! By being rich you’re able to eat healthy, get some sun, live without stress and help people who have helped you in the past. The point of getting money is not to buy a Tesla (you can if you’d like) it is to eliminate every negative aspect of your life.

If you hit your first million in your late twenties this may mean working 40 hours a week still. If you hit it when you’re in your mid 30s it may mean 25 hours of work per week. We don’t know. Just make sure you’re maximizing your health because that was the entire point. If you’re rich and stressed out/unhealthy you’re doing something terribly wrong.

Make Small Adjustments: Begin fiddling with your business and your career. Can you give up some of your income stream in exchange for time? How much time will you save? How much will it cost you?

Many people attempt to do everything in a small group of 3-5 people. This works… until? You cross a certain net income level. At that point you have to expand. Do your best to maintain your equity and simply offer a higher salary to the person looking for a job.

The power of 1% is certainly real. Do this five times. 5% of a full week is 8.4 hours. That is a lot of time! That is literally a full day of work you just avoided. In other words you could spend 8.4 hours at the gym, eating healthy, reading a book and taking your dog for a walk. It really is up to you. But. 8.4 hours is a long period of time to have freed up!

In Short: If you’ve followed the path outlined here, your goal is to avoid money addiction. We really need to do a post on this but most wealthy people are *not* addicted to getting the money. They are addicted to making the money! It is simply a game they are playing and it is the hardest game in the world (picking up girls gets easy after about 3-4 years). But. Once you’re free, you’re allowed to strike a balance. Consider your health. Consider your social life and don’t fall victim to the money *making* addiction.

CONCLUDING REMARKS

We’ve reached the end of the post. It truly is possible for anyone to obtain $1M in 10 years. Maybe we have too much faith in our readership but who knows. Below are the bullets:

– A job is a time for money exchange only done to *temporarily* build skills for a future career or business

– Never work for free or for minimum wage

– A career is a performance based income stream and a business makes money while you sleep

– Find transferable skills: Sales, Networking, Efficiency, Maintenance, Continuity

– Simplistically, if you can average ~$200K+ a year over a decade starting at $100K and scaling to $300K+ you will easily become a millionaire if you want. You won’t have time to blow through all the money anyway.

– Again and again, frugality is a joke. If you’re busy earning? The saving part takes care of itself. You don’t get rich if you don’t invest in your skills. Example: “research ways to save $5″ vs. “spend same amount of time making $25″. Option one leads to $5… Option 2 leads to $30 with the same time spent!

– Target the right market. Either emotional people in the 80% or wealthy people in the top 1-20%.

– Sell with emotion not logic. Logic does not work.

– Pain sells much better than pleasure. Particularly if you can target an insecurity.

– If your product is legitimate, how you sell it is irrelevant. The only thing that matters is if it *converts*

– Creating good ads/copy is *NOT* easy. Particularly if you’re a logical person. You’re going to have to dumb down your writing and intellect to an 8th grade level at *maximum*

– You didn’t get rich to be an unhealthy fat person. Your health is number one. Your money can also help your friends and family who were there for you when you needed them during the dreadful “down” years.

– Reiteration. Give up three and you will be free. You’ll be hard pressed to find a broke person who really gave it their all for roughly 3 years. It gets significantly *easier* to make money after 3 years of pain. No need to crank out 70-80 hour work weeks anymore.

– Now that you got your money… Don’t let it turn you into a monster…

—

Notably, what was not mentioned? Taking *control* of your finances once you push up on a six figure net worth. We’ve looked through many products and concluded that  Personal Capital is the best way to learn the basics of money management (the best part is that it is free to sign up!). To reiterate, our recommendation is only for higher net worth individuals (6+ figures) as your time is better spent generating revenue/income if you are below this metric. For a more detailed explanation click here.

While our more popular posts have detailed analytical explanations on how to increase income… this post is going to take on the qualitative side of the equation. It will be similar to our post on finding your type of intelligence. If applied correctly? Your income should increase *materially*. There are many hurdles that you will face as your income rises. Primarily when you push up on barriers:

For ~85% of the population this is the ~$100K/yr barrier,  ~10% stuck at the ~$200-350K/yr level, ~4% at ~$351K-750K/yr level and then… those that break the $1M level.

While our percentages may be off it does splice the USA into distinct groups.

The First Group ($100K): Most get rich scams targeted at the masses tout “$100K” per year. Why? It is “unfathomable” and a dream income for average people. According to income statistics, roughly 85% of households cannot break $100K (our blog does not cater to this group)!

The Second Group (Career Plateau): This group gets capped at the $200-300K range. Either 1) they didn’t start a business on the side or 2) they tried to “play by the rules” to get ahead. At some point you have to start a venture on your own *or* take advantage of your standing within the firm and politely ask for more responsibility. The best way to gain hand is by generating revenue of course. We recommend doing both if possible.

The Third Group (Risk Aversion): At the mid-six figure level practically everyone is comfortable. They are more concerned with keeping their income stable than generating more money. In reality? They can break their plateau.

The Fourth Group (Wealthy): This group is simply eccentric. If someone is making 7 figures, they could be battling sex/drug addictions or they could pretend to be poor. You never know. The one thing they did do? They continued to build a *recurring* revenue stream. Everything is about creating a *recurring* revenue stream. If you sell one $1,000 product but you can get just $10 a month for life (see all software companies/many internet products/any re-bill) then you are building a massive stream of cash flow.

With the high-level section out of the way here’s the overview:

1) Mainstream Ways to See Psychological Differences

2) Personal Psychological Mistakes to Avoid

3) Actionable Ways to Change Your Thoughts

4) What to Do When the Money Flows In

5) Continuing to Improve

MAINSTREAM WAYS TO SEE PSYCHOLOGICAL DIFFERENCES

Money is an emotional topic. Highly so. Knowing this, we can look at our everyday lives and see clear psychological differences amongst those that make a large amount and those that never seem to get anywhere.

In short? Wealthier people are practically “emotionless” when it comes to money.

Game Show Example: While we don’t recommend watching Television (it is the definition of “when you’re not working, someone else is”; you’re watching someone work while you do nothing) you can learn the basics by comparing audiences.

Jeopardy and Who Wants to Be a Millionaire: Just take a glance at the winners here. You’ll find that they do not jump up and down screaming when they win a large sum of money. In fact? They come off as arrogant and emotionless. While you don’t *need* to be arrogant, the emotionless piece is critical. Why are these people emotionless? Simple. They believe they deserved it. They strategically chose questions, strategically answered questions and made gambles when they had to. Now lets move onto “the masses”.

Family Feud, the Price is Right, Wheel of Fortune: There are always “exceptions”. But. You’ll find that the winners here get *hyped up* immediately if they win. They literally jump up and down, clap and have a huge ear to ear smile. Why? The show is much more luck based than skills based. Even if they win a small sum of money $25K (~$17K after tax) they will become emotionally high immediately.

In Short: A game show can quickly tell you how wealthier people act relative to poor people when they receive money. Wealthier people are emotionless as they realize they primarily earned what they received.

The Past or the Future: You can use this to determine if someone has faith in themselves. You won’t need to go anywhere. Simply look at your contact list and ask yourself if your friend lives in the past or in the future.

“Don’t deal with people who live in the past. You don’t look back if your future looks brighter.” – Wall Street Playboys

The Future: If you live in the present and future, the implied message is that you believe in your future worth. You are progressing. People like this are typically very hard to get a hold of. They are constantly doing things and don’t ignore you simply to “play mind games”… They actually are too busy. These are the people you want to emulate. Our readership is primarily full of people who focus on the present and future (we ban people who dwell on about the past).

The Past: An obvious sign a person is going nowhere. Constantly talking about their previous accomplishments (or complaining about their past failures). The only time you do this is if your previous accomplishments will never be trumped. In addition? They will also dwell on how much better it was “before” (this is never the case). Every year the world gets better… So you know that anyone who believes his past was better… simply stopped improving.

In Short: Ignore everyone who lives in the past or talks about the past. Their best days are behind them. While you may lose a large sum of money at some point ($100-200K+) or you may have a serious physical injury, there is nothing you can do about the past. It is dead and doesn’t exist. Similar to people who live in the past, forget about any negative events in your past as well. It is irrelevant compared to today and tomorrow.

Sociological Excuses: Finally, the end-all-be-all of excuses between the winners and losers in life. “You can’t have it all mentality”. Having money and good social skills is practically a curse. You should hide it as much as possible. Why? Less than 1% of people will be happy for you because you break their belief system. If you have money, mediocre people will assume you have “weak social skills”. In addition? If you have solid social skills many will then assume you are broke! Naturally, you know what to do. Use your social skills to appear harmless and use your money to push across the finish line (many of our readers are nodding and laughing as they understand that sentence all too well!).

You Can Have It All: The sub heading says it all. If you’re extremely *efficient* with how you manage your life you can have it all. This is going to mean something different for everyone. But. At the end of the day? You can have anything you want if you understand the dynamics behind managing money and freeing up time.

You Have to Compromise: These people make up the masses. They assume that you have to compromise to get something instead of taking on the harder task of finding a *solution*.

“Pessimist = Complain about the rain. Optimist = hope the sun comes out. Winner = invents the umbrella, goes outside (and makes millions!)“ – Wall Street Playboys

In Short: Instead of taking a compromising attitude, you should take on a solutions attitude. Any problem you are facing is being faced my millions of other people. If you can find the solution, you’ll fix your problem and get rich! If you complain about the problem? Nothing happens. Someone else is going to solve the pain point. This. Again. Is why life continues to get incrementally better every year.

PERSONAL PSYCHOLOGICAL MISTAKES TO AVOID

The vast majority of our readership is likely nodding in agreement to the first section. Lets move onto the uglier section. We have made every single psychological mistake mentioned here at least once.  Assuming you have the general framework down you’re going to catch yourself making mistakes and we’re going to try and avoid each one here.

Do It Once: The classic phrase is “measure twice cut once”. It is true. If you are going to do something you should do all of your research up front and set it up appropriately. After that, you don’t have to worry about it and know that the sky is the limit once the infrastructure is in place.

Business: If you plan on starting a company (you should) then you need to do it correctly from the start. One of our readers asked if he should take a short cut “for now” and switch over “later”. This is a massive psychological mistake. If you know that the way you are setting it up is to “test the waters” what you are mentally telling yourself is that you are not taking it seriously. This is only okay if it is a hobby. Otherwise you are better off doing all of the research up front so you can scale up seamlessly. It is mentally taxing to know that your business is not set up to scale efficiently from day one. Not worth the mental barrier. If you plan on succeeding, do every single thing you can to set up the infrastructure once. Otherwise the backward work is going to take an immense amount of time. The idea that you make “small incremental improvements” is a *hobby* belief. This only work for hobbies and wage slaves who attempt to negotiate an increased salary from $40K to $45K.

Hobbies: Now you see the line. If you intend on making real money, you never go in blind swinging from day one. This only works for hobbies (sports, meeting girls, this blog, etc.). When you’re not working on creating a recurring revenue stream (business) or improving your career you should have a much more relaxed view when it comes to making mistakes. If you have to un-learn specific bad habits, just consider it part of the learning process. It’s not a big deal since you’re not in it for the money.

In Short: Separate your tasks between fun (hobbies) and money. If you plan on making a specific project a revenue generating item you should set it up once and only once. By doing anything else “for now” you’re setting a mental ceiling that you cannot exceed X income level. Do not do this.

Thinking in Small Chunks: This is the biggest and most common way to back track. It happens over and over again and is quite similar to the piece above. Stop thinking in incremental steps. This is not how making large amounts of money works. The most common example is believing that you need to get “one dollar from a million people” instead of simply shooting to get $1,000,000 dollars from a single *event*.

Event: We have talked about *events* many times. But. This is critical to understanding when you’re in the middle of an event. Lets say you are selling items online and you realize that when you spend $10K on advertising spend it is leading to $20K in income. For some reason you are scared to spend *more*. This is foolish. Just because your income went from $1K in a month to $10K in a day… does not mean it is suddenly going to die! You somehow hit the right niche and you need to KEEP SPENDING. Spend every single penny you’ve got until it is no longer profitable. For those of you making online income we will go ahead and bet that many of you have made this mistake before! When an event occurs, the money floods in and you should take advantage of it!

Small Chunks: This creates a massive separation between the rich and the poor. When you are targeting the masses (fools) you should sell them on the idea that they will “get rich” by negotiating a *salary increase* ($5K salary raise from their current $50K salary). This is pure poverty mindset but this is exactly how the masses think. They think that the 10% move is “reasonable and obtainable” and you can sell them this “dream” and easily take a $500 commission. No joke. This is how all head hunters work as well! Knowing that the masses think in terms of small incremental gains you know what to do… Do the opposite. Think in one time events. You have to be odd to be number 1.

In Short: Stop thinking in small incremental gains. Small incremental gains are for maintaining your assets and for hobbies. It is not for *increasing* your net worth. If you think small, your gains will also be small.

Not Keeping the Customer: By avoiding customer retention you are hitting singles consistently. While there is value in basic one time sales, it should be a springboard for *recurring* income. It does not matter which business you are in (fitness, finance, content, etc.). The goal is to create a recurring customer through either 1) the business model or 2) psychological loyalty. People are all the same. People sit in the same seats and go to the same stores for a reason. They are interested in being comfortable. By the same token, there is a reason why you receive free goodies when buying larger gift cards at coffee shops and other similar venues. They want to create a *habit* (see recurring customer) and are willing to invest a few dollars through a discount to make that happen.

Recurring: Many people will make this mistake. They will create a business that sells a product at a $100 average selling price and they won’t keep the customer. They simply sell them an item and they run away. Huge mistake. By doing this you are increasing your costs and decreasing your revenue. Think about it like this. The cost of the first sale (acquiring the customer) is always the same.

Revenue – cost of acquiring customer = profit

Therefore… If you do not find a way to set up recurring income from the customer, your revenue number is flat while your cost is also flat. If you find a way to add value that creates a re-bill (even $5) your revenue line is up while your cost is flat. Enormous difference over the long-run.

One Time: This goes back to the small chunks idea. Trying to get one dollar from a bunch of people. It is similar to the homeless person sitting on the corner begging for just a “quarter” from every passer by. It simply doesn’t work! Never has and never will. Your only shot at the one time sale being a great idea is a one time large event as outlined in section above. If you sell a $10M house? Sure. Getting $10 from 10 customers isn’t going anywhere.

In Short: At all times, think of a way to keep the customer coming back. If you put in all of the work to obtain the customer, the last thing you want to do is give them no reason to return! It simply won’t make you rich. You did all of the leg work up front, so you may as well find a way to retain them.

ACTIONABLE WAYS TO CHANGE YOUR THOUGHTS

If you’ve made mistakes in the section above, don’t worry about it (it’s part of your irrelevant past). We’ll flip to a list to condense all of the ways to “un-learn” psychological traps and expand upon improving your beliefs.

1) You Deserve Money: Step one is realizing money doesn’t care what you look like. It does not care if you are poor or if you were born rich. In fact, many people get rich by being utter failures. There are hundreds of CEOs who run their stock prices dead into the ground (50% declines) yet they still make eight figures. If these people can get rich, don’t feel bad for one split second that you’re making $X.

2) Stop Thinking In Incremental Gains: Again and again, this is how poor people think. “If I can increase my income from $200K to $220K I’ll be thrilled! It just doesn’t work that way. This is a great way to think if it is a hobby (weight lifting is the best example). Why? It is literally impossible to see a 100% gain in your bench press in two days.

3) There is No Limit: People have made billions of dollars. Remember that there is literally no limit to how much money you can generate. If you can make $10,000 a day there is no reason why you cannot make $1,000,000 a day. It is simply an issue of scale and demand. (Reminder the biggest market is the masses)

4) Generate and Own Only: These are the only two ways to make real money. Generate money or become an owner of an entity that generates money. Everything else is a time for money exchange and will never work. Anyone who encourages increasing your time for money exchange (negotiating salary increases) is teaching you to be poor.

5) Become Emotionless to Money: If you think about money and then envision yourself jumping up and down or telling people off… you’ve already lost. When you’re ready to make money you should be emotionally flat. If a $10K wire hits your bank or a $100K wire, you shouldn’t change one bit (just numbers on a screen). Most people think about money and become “hyped up” in their heads. They imagine all the people they like and dislike (partying and yelling at people they dislike). Pure poverty belief. These people never make anything. If they do? They typically lose it all very quickly. Become emotionless with regards to money.

6) Search for Hyped Events: Any major event for the masses will be full of emotion. Sports, parties, holidays etc. This is where *companies* make a killing (hence seasonality in their P&L) while the masses tend to lose money in these periods of time. Any time there is an event that is widely hyped up you should think of ways to monetize it. The money is circulating aggressively.

7) Honesty Creates Recurring Revenue: Broke people think honesty doesn’t work and you have to “screw people” to make money. This is false. If people are going to buy alcohol and caffeine pills there is nothing wrong with selling these unhealthy items to them. There is something wrong if the products aren’t what they asked for though. Huge difference. The market is going to charge what the market will charge. You cannot change reality. So simply sell what you can as long as you are giving the customer the product they want. If you give them what they want (regardless of your interest in the product) they will come back for more. Perfect set up for recurring revenue.

8) Your Current Income Is Irrelevant: Many wealthy people go from millions per year. To zero. To millions. To bankrupt. To millions again. Why? They continue to focus on generating and owning. If your income is $100K a year today, it is 100% unrelated to your income next year.

9) Never Under Sell: While you should always deliver more value than you charge… do not sell yourself short (literally). If you spent 20 hours working for someone, you are being paid *less* than you are worth by definition! Re-read number 8 to drive this point home.

10) What You Like is Irrelevant: This is paramount to changing your psychology. If you wouldn’t buy the product, it does not matter! This is why a hobby is for fun and business is for money. Follow emotions and you’ll find a way to create recurring income.

In Short: If you’re incredibly good at controlling your thoughts, you will never slip (extremely difficult to master, to this day, cannot do this 24/7/365). If you find yourself slipping into the wrong psychological thought process… Pause and take a break.

WHAT TO DO WHEN THE MONEY FLOWS IN

We’re getting more questions like this. Many people find that when the money comes in, their emotions get out of whack and they suddenly have more “friends”. This creates a lot of problems. The last thing you want to do is make promises to new friends when you’re extremely happy. This is similar to never speaking your mind when you’re extremely unhappy.

Lump Sums: Don’t make the same mistake we’ve made (in the past). When you make your first large sum of money, do not blow 20%+ of it on useless items. Most people end up buying material items and go on a big party/fun binge (vacations, alcohol, drugs etc.). While spending some of it is fine, do not let your dopamine levels get ahead of you. A decent guideline below assuming you are *not financially independent*:

$5,000-$20,000: Simply keep it. This is enough to help make a dent in your financial future but it is not enough for you to waste if you’re not independent.

$20,001-100,000: Spend ~5%. At this point you’ve likely made career/business progress and are in a situation where the lump sum is going to occur again (made a commission selling a home or otherwise).

$100,001-300,000: Spend 5-10%. We’re making a slight increase here since you’re already nearing *event* income where you won’t need to worry about working anymore. At this level simply spending a bit more is not a big deal since you’re probably close to financial independence in the first place.

$300,000-600,000: You’re practically at the event level. We’re drawing  the line here as anything beyond around $600K and most people could live a basic life off of the passive income. You can spend anything that is *above* your financial independence marker.

*Event* Income: Anything above $600K is likely enough to set you up financially for life. In short the two best things to do are 1) not touch it for a year and 2) educate yourself on money management. When you push past the seven figure net worth area, many people will begin asking you for money. People will also volunteer to “take care” of your money. Do not listen to any of these groups, lock your money away for a year and start educating yourself.

Step 1 – Small Purchase: Your dopamine levels will be off the charts. You should make a single small purchase that is at maximum 1% of your event level lump sum. This will give you a one time jolt to reward yourself and if you can limit yourself to one percent you’ll be able to control your emotions going forward.

Step 2 – Lock it Away in Low Risk Items: Since we have no interest in opening a financial consulting business at this time, you should simply lock it away for ~12 months in low risk items (CDs, Investment Grade Bonds, etc.). While the majority of our posts focus on dollar cost averaging into index funds, once you clear a high net worth your job is to *first* protect the principal at your financial independence level and *secondly* focus on growing your worth with the remainder.

Step 3 – Financial Education: Everyone has a different risk tolerance once they clear the financial independence cliff (usually around early-to-mid 30s). We’ve looked for a few tools to use and have added a page to recommend Personal Capital as a way to learn the basics (for $100K+ net worth only).

In Short: Until large sums of money can set you free, you’re going to have to take the punches and spend a small amount of it to avoid running on the treadmill forever. You’re going to need to money to help advertise and increase your sales anyway (re-invest in yourself). Once you’re financially set, you’re doing yourself a dis-service by not educating yourself on how to manage your money. Learn the basics before letting anyone give you advice. Otherwise you’re going in blind with something you’ve worked extremely hard for.

CONTINUING TO IMPROVE

At this point we’ve covered a lot of psychological topics with regards to making money: 1) how we create mental barriers in our minds, 2) thinking small, 3) setting things up to lower the bar instead of raise the ceiling, 4) thinking in terms of recurring revenue instead of one time sales, 5) multiple ways to change your psychology and 6) how to deal with the dopamine impact when you receive a large sum of money.

At this point? Many people get bored. They lose interest in what they are doing and even make the mistake of selling their company below its value! Do not do this. Alternatively, some people become obsessed with making large amounts of money at the detriment of their personalities! Do not do this as well!

Instead you should begin striking a balance between heavy hobby interests and growing your business at a reasonable rate. You’ll find that without any work to do you go insane (many people develop drug issues).

The best way to track your progress is seeing improvement in both subsets: hobby interests and business growth. Assuming that you are getting better at your hobbies and your business is growing, you’re in the clear. If either one begins to stagnate it is time to focus more effort on the flat or declining piece (hobby or business).

Oh and to answer the question? This was a long way of saying… Yes. Making money is 100% psychological.

————

Since a lot of our readers are already well off… Are there any psychological traps you find yourself in? If so how do you break them? How do you prevent yourself from falling into thinking like the average person? We have likely missed quite a few.

We’ve been writing too much. The blog grew far too quickly and we’re receiving low quality questions that are being deleted at lightning speeds. Not a good sign. While many of the questions appear to be good from the perspective of the reader, they fall under the same umbrella: Analysis Paralysis. This is a function of asking questions when: 1) they have no other options, 2) are not even in the situation they are describing and 3) are looking for a short cut to making money. All of these questions go straight into spam.

1) Examples of Low Quality Analysis Questions

2) How to Avoid Paralysis with the 90/10 Rule

3) Most People Shouldn’t Read This Blog

4) Why You Should Think in Terms of a 2-4 Year Plan

5) You Will Only Succeed When You Have Specific Differentiation

“Analysis Paralysis. Over-analyzing or over thinking a situation so that a decision or action is never taken.”

Examples of Low Quality Analysis Questions

This is going to be an extremely easy section to write. We are simply going to pull terrible questions from the spam section and show why the person either 1) didn’t bother to do low level research or 2) is trapped in his own mind thinking of scenarios that do not exist.

Will Investment Banking be Automated? Anyone who thinks this is an imbecile. Plain and simple. Investment banking has nothing to do with trading stocks or investing. It has to do with transactions. You are a salesman. Unless you believe that interpersonal relationships will be automated (they won’t) then investment banking is going to stay for a long time.

When you buy a home, you hire a real estate agent. When you sell a company you hire an investment banker to negotiate the sale/purchase. Reiteration. It is a sales position and unrelated to “picking stocks”… a common term used by regular people.

This is an example of a terrible question. The reader doesn’t even know what investment banking is. The information is free and if they cannot find out how the business works with a Google search… they certainly won’t survive in the hyper competitive industry.

Should I Take XYZ Job? If it is a job and not a career the answer is always no. The only time you take a job is is if you are forced to *or* it can be leveraged into an actual career in the future. Secondly, if you don’t have anything else on the table… You cannot ask this question. Without multiple job/career offers there is no point in having a discussion anyway. Nothing has happened! This is a waste of brain cells since the decision was made for you already. If you need income and have no other offers… You have to say yes. If you are concurrently interviewing with other firms, the answer is to delay acceptance.

In short, this question is wasting valuable brain cells. If you only have one option, you’re forced into saying yes.

What Are My Chances of Making $X? We don’t know. No one knows. If you cared about maximizing your chances you would simply try your best out of the gate and see what happens. This does not mean you spam everyone you know for career/business opportunities. It means you do the requisite research (about 1 month) then present the “best you” at the time to hundreds of firms.

This question is typically asked by people who have taken no action. If you did the research on what you’re trying to accomplish you would already know how to best represent yourself. If you know how to best approach the situation… All you have to do is try at that point.

What is More Important Game/Looks/Money/Status? Another terrible question that we constantly delete. There is no saving these types of people. The best you can do is hold one item *constant* and try to make observations based on your personal experience.

It is simply silly. An extremely good looking person or a person with a position of extremely high status (DJ, promoter, professional sports player etc.) does not need as much “game” or as much “money” to compete. This is not even worth talking about. The goal is to maximize your potential. Not argue with broke people on the internet who can’t even make $100K+/year.

The more important question is this: how do you maximize all four? That’s what this blog is about when it comes to life advice.

In short:

1) Looks improve until at least 35 as long as you stay in shape (learn basic fashion, hit the gym)

2) You have more energy in your 20s. If your looks are going to improve the obvious answer is to focus on money and status.

3) Now that you’re focusing on money and status which skills are the most valuable? Easy. Sales and networking. Sales and networking = same thing as “game” which is just sales. (You selling yourself)

4) Put it all together. You work on sales and networking. This improves your career and business. This also improves your general social skills with women. This leads to a bigger social circle (status) and leads to more money (leveraging your time). Now you’re in your 30s and you’re worth over $1M and don’t have to worry about anything.

Alternatively. You can do what everyone else does. Try to maintain their college circle of friends (temporary status) and get drunk 3 days a week. Work a dead end job that pays a salary until 30. Look around as their college girlfriends all go for guys 4-10 years older than they are (usually around the age of 25-26). Spend their mid-thirties chasing money while the smart guys relax and have fun.

Takeaways: This is probably the most negative section we have written in over 3 months. It needed to be done. These questions are simply terrible. Expecting to get ahead of the pack by doing what everyone else is doing… simply won’t work. Build the framework of how life works and weight your time appropriately. If you do this correctly you’re going to be flying down the runway like a drag car racer. If you do it incorrectly, you’ll be watching in the stadium.

How to Avoid Paralysis with the 90/10 Rule

Now we’re onto the more positive and fun items. As we stated at the beginning, we have been writing too much. Why? We’re getting overtaken by questions from people looking for “hand holding”. The best way to avoid the hand holding trap is to simply find a way to improve yourself.

Most people focus on the gym as their bread and butter way to start improving. This is not the right move (not surprising since it’s what everyone says to do first!). Being in shape is like brushing your teeth. It is not something to brag about or even consider as an accomplishment. Use this as a strong filter for being surrounded by guys who won’t go anywhere in their lives.

Your first course of action? Find a high income by leveraging your intelligence.

How do you find your skills? Try at least 10 different types of career paths until you hit the jackpot. You’ll know you’re generally good at it when 1) other people tell you you’re good and 2) you find the work to be 80% enjoyable (~20% of every single industry is dealing with nonsense)

Wall Street Example: Lets say you are reading this for Wall Street information. Based on your peer group, you want to go into investment banking. Is this really the right move? We don’t know you, so we can’t answer yes or no. What is the point of investment banking? It is to develop long standing relationships, learn how to sell and think strategically. It is not about creating excel sheets all day. That is the mundane portion of the job that you will eventually outsource when you begin generating revenue for the firm.

Situation 1:  Lets say you’re working an investment banking internship but find that your short term interpersonal skills *significantly* outweigh your ability to look at a landscape slide and find M&A targets. The answer is obvious. Go into institutional sales instead. Why? If you’re not able to correctly understand a landscape and the subsequent strategic plays, over the long-term you’re not going to make a great investment banker. You will likely make a great institutional salesman and you will still clear well over $500K a year in short order (early 30s).

Situation 2: During your same internship you realize that you’re quite good at predicting which M&A deals will fall apart or get bid up. Congrats. You should probably go into investment banking for 2 years and immediately jump into a Merger Arb Hedge Fund. Why? Even though your skills are good in terms of analyzing deals, if you’re able to synthesize the transaction quickly there is *much* more money in the merger arb field than there is as an investment banker. Practice what you preach and jump in year two.

We could go on and on about this (if you’re better at understanding how to run a book you’re better off at a L/S hedge fund or in Equity Research etc.). The point is the same. If you’re reading this blog for information on Wall Street you should do the much more important task of finding what section you should work in first. This is going to pay back millions of dollars versus the $250K a typical associate will make. Spend 90% of your time finding your skills, spend 10% of your time looking at what niche you should jump into .

Business Example: Many of our readers have triangulated how much money we’re making online (yes we deleted your comments!). The bigger issue is this. Seeing numbers from someone else has nothing to do with what you are currently building.

We get other terrible questions such as “when should I buy traffic” where the answer is always the same “now and see if it works”. We have no idea where a person is in terms of their company so it creates more wasted time. You should spend 1 month doing basic research then… try before you ask.

Paid Traffic: Using the above question as a piggy back, you should always try to buy traffic first. This means you do all of the necessary research, target your niche and start out with a few thousand dollars in spending. You’re never going to “know” if it will work from day one. This is simply not possible (hence the word risk). Once you have tried at least 2-3 times you can start asking questions about the next steps.

Good questions include: 1) did you target the right group at the right time of day?, 2) did you go through the correct traffic avenue?, 3) were your copy writing skills up to par?, 4) did you choose the right distribution avenue to maximize margins?, 5) were you being outbid due to a traffic arbitrage by a competitor?

Until you have at least tried to buy traffic, there is no point in asking any questions in the first place.

Takeaways: Keeping the section short and sweet. The point is simple. Try everything after you have done the necessary research (research takes ~1 month). Simply find trusted sources (never mainstream) and then go with your gut and logic. Once you’re rolling it should be a simple game of making tweaks and focusing 90% of your time on doing versus learning

Most People Shouldn’t Read This Blog

This blog is not meant for most people. The harsh reality is that 50%+ of our current readership probably shouldn’t even read this blog. Why? This blog is niche. Focused on life advice for people involved in business sales and Wall Street. That is it. If you’re not operating a profitable business (draw the line at $200K+) and you’re not working on Wall Street (draw the line at $200K+) the information here is not going to be helpful unless that’s the career and business path you want.

If someone is reading this blog along with 3-4 other blogs on a weekly basis, they should probably shut this one down forever. We don’t need the traffic since the blog is set up to have product recommendations offset hosting costs. If we wanted to increase traffic we would have “joined forces” (power rangers comment from one of the readers who shouldn’t read our blog) with other bloggers. Of course we didn’t.

Why are we recommending that over half our readership leave and never come back?

See “Analysis Paralysis” again. While it’s great to see readership grow, it is not fair to recommend reading a site that is not going to give information tailored to their interests.

If you’re obtaining information from more than 2-3 sources on a weekly basis you’re already losing steam. You should only have one *maybe* two blogs that you read on a once per month rotation. Otherwise you’re going to read a muddled mess of ideas and beliefs that won’t help you at all.

Finally, an online resource is probably worth 5% compared to an in person resource. You’re going to make a lot more money and a lot more friends by having a real social network instead of a fake social network on the internet. How do we know? Look at the lives of the online social network. The lives of people who live primarily on social media, forums etc. *never improve*. If you’re the same person this year as you were last year. That’s a dead giveaway to shut down resources.

Takeaways: Avoid Analysis Paralysis by reading at maximum twice per month. Do this online with a few select resources (we’re drawing the line at two). No more than 35 minutes of your time should be spent reading online resources on a month to month basis.

Why You Should Think in Terms of a 2-4 Year Plan

All of the advice here really ties in together. If you’re spending 90% of your time taking action then you’re not going to have much time to loiter around on the internet. This will cause you to think on your feet and problem solve without going to internet websites or forums to find the “perfect” solution. You only visit online resources when solving a legitimate specific problem that you are running into.

The crux of 2-4 year plans is simple. Think backward.

Lets say your goal is to increase your net worth by $240K. That is a sizable chunk of money and is going to require a lot of work if you’re new. Do your best to think backward to the savings rate and your income growth.

In a linear fashion you need to put away $80K per year. Knowing that income is non-linear, you’re probably looking at something closer to $30K, $70K, $140K. Why is this important? It is important because $30K on a glance looks like an extremely easy hurdle. Instead of worrying about how you’re going to get to $140K in year three… you know that you need to throw *at least* $30K into the bank in year one to have a fighting chance in a performance based role.

Performance based income generating $30K is going to give you an idea of what works and what doesn’t. You’re going to learn basic tricks without even reading a book. You’ll learn through experience that phone calls 4+ with the same client have next to no chance of converting relative to phone calls two and three. You adjust your game plan. The next year you’re spending more time chasing down *quicker* sales than “long-term sales” since you learned in year one that phone calls 3 and 4 are a waste of time.

Quick pause.

Now you can do the basic math to see why going from $30K to $70K is no longer a huge hurdle. You spent 2x as much time (calling over 4 times) to generate $30K in extra savings/net worth. Knowing that calls 3 and 4 are worthless you have cut your working hours in half.

Since you intend on increasing your income, you’re going to chase more leads up until phone call number two. A doubling of income is certainly on the horizon.

Alternatively, from a career perspective… you should think in the same fashion.

Is a 10-20% uptick in compensation worth the risk of destroying long-term relationships? The answer is generally no. The only time you jump ship is for a 40-50% change, not a 10-20% change. If you’re in good standing with a firm and you’re leaving for 10-20% you’ve blown yourself up.

Takeaways: To boil the examples down: 1) businesses should be managed mentally from a year to year basis upfront instead of a 10 year plan because there is minimal history to suggest trends and 2) careers should be managed from a medium-term perspective since everyone else is jumping ship for 10-20% moves on a 1 year time horizon. In short, 1 year plans and 5-10 years plans simply don’t work.

You Will Only Succeed When You Have Specific Differentiation

Ah, yes. The final reason why “Analysis Paralysis” is ruining your net worth and future. The only way to increase your income materially is to have a competitive advantage.

We get a lot of emails asking what “exactly” we’re doing (all deleted) and for specific “resource tips” (all deleted). The answer is always the same. We recommend very few products and all of them are good. Beyond that, the only resource tip we can give is to make mistakes.

No one in their right mind is going to give away trade secrets or any form of creative competitive advantage. You don’t build up a company or a career over 10+ years just to hand it to someone else who has contributed $0 to your bottom line. It simply doesn’t work that way.

How does it actually work? It works like this.

You pick up a few resources on the topic you are interested in (Sales, Wall Street etc.). You learn the basics on what to avoid. Avoidance is the only thing a resource has to offer you for free. It will prevent you from making bone headed mistakes that will cost you materially down the line. It is equivalent to learning how to swing a golf club correctly. After that… It is up to you (90/10 again!).

You can ask for a review of your golf swing once every month or so when you’re seeing minimal improvements. But. No one is actually going to swing the club for you. Once you’re good at swinging the club, you find nuanced strokes that work better for you in specific situations. That is where you go from decent to good.

A business and a career are both the same.

You avoid the blow up mistakes (incorrect company formation, incorrect politics, incorrect beliefs on what drives revenue) then you search for differentiation. So long as someone can copy you verbatim, you’re already behind the game!

Takeaways: You will gain traction once you find legitimate differentiation. This usually takes several years and you’re not going to learn differentiation from any book, seminar or website. You learn it the hard way (by doing). This website is set up in a similar fashion. We now provide detailed explanations of why you do XYZ instead of ZYX. It is up to the reader to decide if it makes sense or not.

Concluding Remarks

Keeping it short as this post was written during a long international flight and likely has many typos. Below are the bullets

– Do not ask questions based on fake scenarios. This is a waste of time and your brain cells can be put to better use by improving your current scenarios instead of imaginary analysis

– If you do not have options you do not have questions. This is similar to negotiations. If you don’t have a competing bid there is no reason for them to move up to your ask.

– Hate to say it. But. Based on analytics, most people shouldn’t be reading this blog. It is a niche website and if you’re reading this blog along with blogs that are unrelated to it, you’re probably best reading the unrelated websites. There is too much conflicting information to draw up a good mosaic for yourself.

(on a more positive side note, reading comments from Stealthy1Percenter, REGuy and Recent Graduate, should help decide if this place is good for you. If you disagree with these three, you’re better off leaving since we agree with these three contributors the most)

– Instead of thinking deep into the future (what most people do) think backward. Create the game plan and think backward to today and let the flow of improvement carry you forward.

– You will gain traction once you are differentiated. When people begin copying you or trying to copy you… You’ve won. In addition, if people cannot figure you out… You’ve also won. You’ve transcended their sphere of logic or “their world view”.

On that note back to 90/10 and we’ll decrease our post count from once a week to once every 10-14 days or so (barring special events).

We have gotten a lot of requests for a post on “rules for your thirties”. Unfortunately? There is no value in a post like that. Anyone who has succeeded is not going to be interested in a post on rules since they already have their life together. Generally, this question is posed by people who are in their mid 20s and are looking for guidelines for the future. With that in mind, this post is going to cover general beliefs and steer away from rules. By the time you’re in your 30s you shouldn’t be worried about money, girls or friends. But. We’ll go ahead and add on to these themes.

Financial

Never Trading Time for Money: Maybe you had to take a few salary jobs earlier in life (20-23) to break into a real career (usually engineers fall in this bucket). That is fine. But. By the time you are in your thirties under zero circumstances should you ever work for an hourly wage ever again. You will work for performance (sales/revenue generation), ownership (equity) or you won’t work at all. Period. You’re going to leverage *other* people’s time and never take on any sort of hourly consulting role. It just doesn’t give a good ROI. Finally, if you’re working in a career, yes part of your compensation will be a salary. But. It will not be more than ~50% of your total income anymore. Otherwise? You’re going ot be fired anyway.

Millionaire or Something Went Wrong: We have a clear path to a million dollars laid out. Since this is a post on your 30s there is literally no exception to *not* being a millionaire and in your mid 30s. You would have to make terrible decisions in life over and over again to miss this financial hurdle. Even if you didn’t move up the totem pole quickly, if you’re making ~$150-200K a year it is quite easy to get to $1M. The reality? Most people reading this blog (Wall Street focused people) will clear $1M in net worth by the time they are 30.

Three Forms of Income: Most people who reach 7 figures in net worth have closer to 5 solid sources of income. You should have at least 3 sources of income. If one of your legs gets taken out (business goes south, career goes south or investments go south) you should be perfectly fine. With three forms of income, if the economy collapses you won’t sweat it. You will simply lose one, maybe two, forms of income and get back on your feet to focus on what matters (getting new forms of income again). More importantly? Your total income should easily be north of $250K (more likely $400K+ at least).

Easy Referral Money: You should have several friends who do good work. Lawyers, accountants, online marketers etc. You should receive a referral fee if you find someone who will benefit from their services. If you are going to recommend something you may as well take the fee as well (no point in giving your time away for free). A better example is a recent referral for a top tier accountant. Once your friends start making $300K+ off of their businesses, they are going to focus on limiting tax liabilities. A good accountant can save $4-5K easily on a $300K income stream. Once you refer your friend, the accountant will happily pay you for the referral. Your friend is happy you’re making money off of the referral and your accountant is going to keep you as a customer for a long time (he probably won’t even charge you if you refer 5+ low maintenance customers). In short? Don’t do anything for free. There is no point in wasting your valuable time.

Risk Tolerance: We get a lot of questions about managing finances. Unfortunately? We will never under any circumstances work with retail investors. It is not worth the time, money or hassle. Instead we happily recommend Personal Capital as the go to source for retail investors with a net worth in excess of $100K (details here). If you do not know your own risk tolerance, the last place you should go to for information is the Internet. Go and talk to a professional (for free!). It took us a long time to find a useful source and we’re glad we no longer have to field personal finance questions anymore!

Social Life

No Longer Go Out of Your Way: Maybe you didn’t have fantastic social skills as a younger guy. So you spent some of your time going out of your way to be social. Blocking out time to meet girls at clubs/bars or even trying your hand at meeting girls in SoHo. Fantastic. By the time you are 30? This should end. Your time should be extremely valuable. You simply meet girls on your way to work, meetings or even at the airport. Maybe you enjoy nightlife and go out with your friends. But. Under no circumstances do you block out time to “do approaches” since this is an enormous time suck. If your “opportunity cost” is $500 an hour. That 4 hour hangover the next day simply isn’t worth it. Finally, if you’re one of of those rare people who can go out 5 nights a week and see no impact… Well then it doesn’t matter. The main point? Don’t let your social life impact more important things: Health, Money, current friendships. No strange girl on the street or at the club is worth it. No exceptions.

Tougher to Meet Friends: On television they teach you that successful people have hundreds of thousands of elite friends who they hang out with all of the time. This couldn’t be further from the truth. Successful people have a lot of soft touch friendships. By the time you’re in your 30s you will have ~10-15 solid contacts who probably live in different cities. You have maybe 2-3 solid friends in your city that you see 1x a month and another 12 friends who live in other major cities. The rest? They are all acquaintances. Acquaintances are fantastic for grabbing a drink and “hanging out”. But. Under no circumstances do you ever tell them how much money you really make (or have) or any real details about your personal life. They will try to tear you down.

A Solid Niche: Similar to never going out of your way to meet new people, you’ve already developed a niche. It does not matter what the niche is. Maybe you have a few high end lounges you enjoy going to (everyone knows your name) or maybe you have a social circle involving museums and art. Neither is right or wrong. The real point? You’ve combined an actual interest of yours with a way to meet new people (new social circles) or girls to date.

You Shouldn’t Be Married: As soon as you hit 30, the “marathon of life” works in your favor. The competition starts to drop like flies. Men are getting married left right and center and you’ll get tons of invitations to another lame “international wedding destination”. Attrition is really weeding out the competition. Perhaps, 5-10 years ago you could make the case that men didn’t “know better” when it comes to marriage. In 2015? This is simply a terrible BS excuse. The only downside? You’ll lose a lot of friends and acquaintances during this time period.

International Friends: At this point you should have contacts abroad. At least 5 of them. You should be able to land in a few countries, call/text a friend and have no problem meeting sometime during the week. This will make your life a lot more interesting. Since the pendulum swings both ways, you can show them the ins and outs of the United States of America (best place on the planet). Eventually, you’ll notice key mannerisms of specific countries  (the colors they wear to the brand names they like), which will make it even easier for you to spot foreigners out in NYC.

Obtaining Information

Anecdotal Evidence is the Best Evidence: If someone disagrees with this, they are likely unsuccessful. Why? The only way to gain an edge is to have a strategy that no one else is doing. If it is well documented, researched and public… Then everyone else is doing it as well. How in the world is that going to give you an edge? It won’t. In fact, new age dating advice cannot be proven (yet) and anyone who has gone out more than 100+ times can easily tell you it works.

The best way to obtain more anecdotal evidence? Cross check your beliefs with other people living a similar aggressive lifestyle. If you know that Person A, B and C all have the same goals as you and they are all taking action… Have a quick conversation to exchange notes on what seems to work and what doesn’t. This applies to everything from lifting weights to making money to meeting new people.

Action Over Books: While you should certainly read every single day (maybe 30 minutes to an hour) you should understand that *action* will result in much more progress than information. You can read a million books on how to shoot a jump shot. But… the chances you shoot anywhere near close to Stephen Curry is zero percent if you don’t actually shoot a basketball. A guy with less than perfect form who shoots 1 million shots will beat a guy who shoots 100 shots but studied basketball for 20 hours a day.

Action applies to making money and generating revenue as well. You’re much better off trying to buy traffic. You’re much better off picking up the phone and trying to sell. You’re much better off cold emailing. The key is to spend <10% of your time doing research (preventing bone headed mistakes) and using 90%+ of your time taking action where you’ll make minor fixable errors.

Selective Information: We had to put *action over books* as the best information because life experience always wins. That said, in order to find good information you should have a strong filter before even considering the content, here is ours: 1) is this person better than you at the task? If not… don’t bother reading or building a relationship anymore, 2) is this going to provide information or emotion… the latter is useless but feels like good content to average people, 3) is the information based on studies or years of mistakes? Choose the person who has made many mistakes, 4) is the book worth reading after the first 50 pages? If not… Throw it in the garbage and 5) can you apply the new information within the next 3 months? If not… select a new book.

The real trick here? You’re only going to find ~10 books a year that are worth reading by the time you’re in your 30s. Assuming you’re successful, there are very few resources that are going to improve your life and unless you’re reading for fun (fiction, not action) you’re not going to read all that much. In fact? You’re probably better off learning a new language or picking up a new hobby instead of reading books that aren’t going to help you anymore.

Time Management

30-55 hours a Week: By the time you’re a millionaire and don’t work on an hourly basis, you should be able to make your own schedule. Naturally, you’re going to get bored easily since you put in the hard work (60+ hours a week for ~6-10 years) so you’ll probably work 45-50 hours a week anyway. That said, you should have a team working with you so you can skip days when there is no need to work hard. If you recently closed a transaction that exceeds your quota for the year… there is no reason to show up to work on Fridays for the next 3 weeks anyway. Have everyone else send the basic updates for you.

Learn to Delegate: This was an easy lead in from paragraph one. If you are not trading your time for money? You should become more efficient by delegating tasks to other people. Any task that is not going to lead to more income but *needs to be done* should be delegated. This means updating documents, making tweaks to sales pages, dealing with technology updates, answering unimportant requests to show you’re “always available”. All of these tasks are not worth your valuable time. Hire someone to do them for you and pay them slightly above market rates so they have no reason to complain.

No More Chores: Unless you enjoy doing chores for fun (cooking as an example)… there is no reason to do them anymore. Make a list of items that take away from your time on a weekly basis. Remove at least three of them so you don’t have to bother anymore. This won’t cost you much. Maybe $300-500 a month and will allow you to focus on more important things: 1) your health, 2) thinking of ways to generate more income and 3) how to diversify your income streams. A quick list of things you shouldn’t waste time with: 1) dry cleaning, 2) shopping, 3) responding to emails from low-end clients, 4) team building activities – ask someone on your team to attend and be the cheerleader, 5) cooking and 6) booking flights/hotels/etc.

Concluding Remarks

As you can imagine we’ve been on vacation for the last 2 weeks! It has been fun and we think we have finally gotten rid of all the average people who were reading this blog after a 2 week layaway. In short? We’ll be back to normal posting schedule starting this week (we’ll also return to longer form posts as well).

We’ve kicked off all of the people who 1) want “location independent income of $100K”… IE: location *dependent* income since that won’t cut it in good cities like NYC, 2) ask boneheaded questions and 3) ask redundant questions that have all been answered already.

Finally, if they return after being marked as spam numerous times we will switch to Disqus and begin banning people as fast as possible. Should result in an exciting summer!

Cutting straight to the point, a regular person is someone who should not bother reading this blog. They should immediately close the browser and go to a motivational seminar or spend their money on self help books written by unsuccessful people. If they are really ambitious, they can go ahead and update their resume and find another hourly or salary job that requires no change in responsibility or skill-set.

In short? Regular people should be avoided at all costs and you can see the impact they can have on this blog alone. For one reason or another, traffic has tripled here (again), we have to automatically mark hundreds of comments as spam (again) and for some reason they think this blog is written for them (it isn’t). Regular people simply *slow you down*. This post is going to go borderline “nasty” in commentary towards regular people in an attempt to kick them off the website forever.

#1 Regular People are Impressed by $3,000 in Monthly Passive Income: No joke, they are impressed by this. Regular people believe that $3,000/month while doing nothing is an “accomplishment”. They believe that it is obtainable by starting a website catered to other imbeciles like themselves and that it will free them up to “see the world”. In reality? $3,000 a month doesn’t even pay for rent in a major city and should be achieved well before your 30th birthday. Think about it. Even at 7% returns all you would need is just over $500K to hit this marker.

#2 Regular People Never Fail: You would think that a regular person would be failing day and night to improve his current circumstances. But. In reality, he is busy being an expert on everything. You can compete professionally in tennis but somehow he will claim that he gave up his “potential” way back in high school. He “could have” been in the same position as you if he “wanted to”.

#3 Regular People Pass On Bad Advice: Since he has never accomplished anything… but… believes that he will be “successful in the future” he passes on more non-sense advice to anyone who will listen. He will give you advice on fitness (never even competed in college), money (doesn’t even make $250K), girls (he was the “man” in college) and your career (hasn’t gotten promoted in 5 years). Never challenge any of his ideas because he will get extremely upset. Much better to smile, nod and agree.

#4 Regular People Believe Wall Street Wants to Rip Them Off: Lets draw the line at tier 3 and above Wall Street professionals. This means you do not interact with retail clients at all. In short? Wall Street employees don’t even interact with regular people on a work basis let alone care about their pocket books. Wall Street is a fee based organization and a performance based entity as well. No employee on Wall Street is interested in squeezing out $50 from a guy who makes $100K a year. It is a waste of time. Front office Wall Street employees are only interested in major institutions and company management teams. A regular person’s Scott Trade account isn’t even on the radar.

#5 Regular People Live Above Their Means: Since regular people are smarter than you when it comes to… well… everything. They deserve the best. This means they have no problem ringing up hundreds or even thousands of dollars of credit card debt. In addition? They have the audacity to complain when they are charged late fees! They are living well beyond what they can afford to purchase but… because they “deserve it”… they believe all fees should be waved.

This is a major hint for those of you looking to make money. If you want to start a finance blog catered to the masses create one where you claim you were “up to your eyeballs in credit card debt but figured out how to solve your problems using this one quick trick!”.

#6 Regular People are Emotional: If you want to target the masses (idiots) you need to write extremely “moving pieces”. The best example of a way to speak to the masses is Steve Jobs’ 2005 commencement speech at Stanford University. It had everything lined up perfectly to go viral with “regular people”. People saw the word Stanford and thought they were getting a sneak peek at “elite” advice. Of course Steve Jobs realizes he is on stage being recorded so his *audience* is really *the world* not just Stanford university students. So he created a pump up feel good speech that went viral. No doubt this helped his product sales. For those that actually read his book? You’ll realize he was a tyrant just like the vast majority of successful people. Beautifully delivered and well marketed.

If you want more examples of how to communicate with regular people, just pull up videos of viral motivational speeches. These are all targeted at regular people.

#7 Regular People are Influenced by Their Environment: The difference between elite and regular is subtle. Elite people adapt to their environment while regular people are *impacted* by their environment. Regular people are easily swayed by the opinions of strangers. Therefore, a new environment will actually change the way they think. Regular people are essentially chameleons. They are too scared to stand out so they will blend into whatever crowd you put them in.

Alternatively? Elite people will *adapt* to the new rules they are handed. Instead of simply trying to fit in like a chameleon they will figure out how to succeed in the new environment regardless of what other people are doing.

#8 Regular People are Liars: The difference between regular people and elite people is this. Regular people lie *up* elite people lie *down*. If a regular guy claims to make $100K a year he probably makes closer to $80K. Meanwhile. If an elite person tells you he makes $80K he probably makes $250K+. He is just giving a low ball number to avoid answering questions all day.

Of course there are new money elite people who like to flash cash, however, most rich people enjoy hiding their wealth. They have already been “hit up” for loans and favors by their closest friends and relatives so they decided to simply hide it.

Try and poke around for clues? They won’t have any interest in giving you information unless they find a way for both of you to benefit.

#9 Regular People Believe Rich People Are Mean: Another false assumption. Rich people are generally extremely logical. If you ask for a favor that you know he can easily do and he says “no” this does not imply that the person is mean. Instead? It implies that he has no reason to grant the favor.

Regular people expect hand outs and this is exactly why a rich person is never going to say yes. A smart person who is good at networking is going to ask for basic advice, execute on it and show results before asking for any hand outs.

Regular people expect rich people to simply give them something for “knowing them”. No joke. This is how they think. If they simply know the rich person they believe this entitles them to some sort of income.

#10 Regular People Rarely Improve: If you meet a regular person in 2015 and run into him in 2017, you will be talking to the exact same person. His income probably went up by 3-5%, he gained or lost 2-5 pounds and his face is slightly narrower due to the increase in age. You don’t have to ask him what he has been up to because he can summarize his entire two years in five minutes. He went to work for an hourly wage or annual salary. He hit the gym a few times but quit. He read a couple of self help books. The end.

It is very easy to tell when you’re dealing with a regular person since his life never changes. It’s the same story every single year and he has the same “accomplishments” to hang his hat on. The only difference is the accomplishments are now 2 years further in the past.

#11 Regular People Long for the Past: Over the last 10 years we have seen nothing but massive economic opportunity. Sure some cities have seen more benefits than others. But. Life in the USA has gone no where but up and to the right. This of course assumes that your life has improved. Regular people live for the past because they don’t think their future is going to be any better. In short, avoid anyone who talks about the past. No one talks about the past if their future is brighter.

#12 Regular People Ask Terrible Questions: This is what inspired this post in the first place. We missed a full post because of all the terrible questions and emails we received. Regular people cannot even ask a question without giving their life story as a back drop. Classic ways to tell if you’re talking to a regular person:

1) “Wow really great post I just had a quick question…. 10 sentences later… what are your thoughts on this” – We don’t care about your life story. No one does.

2) “I read this book written by so and so what do you think” – It doesn’t matter what we think. Reading more than 1 book every two months is a waste of time. Try the philosophies you learned and see if it works. That is your answer. If it doesn’t work then it was a terrible book. If it does work it was a great purchase.

3) “What do you think is going to happen to the economy” – We don’t care again. Even if the S&P 500 goes down by 50% it won’t change our lifestyles at all. Funny enough, in the comments people said we were at the peak. Of course the market is up another 20%+ since then. Again. Even if it corrects down by 50%, you should be running a company, so it will be meaningless anyway.

#13 Regular People Do the Minimum: The easiest way to sell a regular position on a wage slavery job is to tell them that it pays extremely high on a “per hour basis”. Once they believe that it is is the best position in terms of time for money exchange they will sign the dotted line. Why? They want to do the minimum. Without actually creating any value they believe that their time is valuable (it isn’t). Instead of creating enough value around them (forcing their time to become valuable) they assume that their time is valuable from day one which leads to a life of mediocrity.

#14 Regular People Like Rules: Since regular people refuse to create anything they will naturally avoid any revenue generating positions. They do not like risk or creativity. This is a given. Instead they expect to be handed a pamphlet that says do X then do Y then do Z. Make the pamphlet incredibly detailed so a robot could do the exact same thing. Then they will complain when a robot takes their job.

#15 Regular People Hate Sales: Naturally, if regular people dislike creating and thinking on their feet they will hate sales. Sales requires a person to be rejected hundreds of times per week (remember regular people never fail!) so this goes against their core belief system (they are “special”).

#16 Regular People Are Waiting for You to Slip: Regular people gossip more than soap operas. No joke. Since nothing is going on in their lives they will track your life like the CIA. In fact, even if you obtain a promotion at a different Company for the split second they find you “left” they will barrage you with emails and texts about how they “knew you were going to fail” (they assume you were let go). If you are on social media (you shouldn’t be) then this will be amplified 10x when your Linked-in profile is changed.

#17 Regular People Hate It When You Succeed: The bigger the divide between you and regular people becomes, the more they will hate you for it. They don’t have the guts to tell you to your face and instead will try to find ways to take you down. It is much better to build a large moat around your life instead. Blend into the crowd, don’t flash anything and avoid giving out information at all costs. Notably, even if you live in an upper middle class area, continue to do this since you may find that there is a large divide between you and your neighbors as well.

#18 Regular People Are Not Interesting: They are simply boring. Boring type A people that you would never want to spend your time with. They are so easy to figure out that you can have a single 15 minute lunch with them and know that you have no interest in meeting them ever again. Is this judgemental? Yes. Is it true? Yup. You can box up a regular person within fifteen minutes (tops).

#19 Regular People Believe They Are Socially Aware: This one is by far the most humorous. If someone is easily influenced by their environment then they are not socially aware by definition. We’re extremely aware that this blog has been raided by regular people over the last 2 months and have no problem calling it out and losing the “traffic” since it is junk traffic to begin with (we also know where it is coming from). Regular people believe they are smart and make their own decisions (thinking they are socially aware) but instead, the same tired old “tricks” will work on them. Look no further than the ad space on yahoo to prove this theory to be true.

#20 Regular People Are Easily Upset: Finally, regular people are easily upset. You can tell them that their favorite character on XYZ sitcom died and they will actually cry or become unhappy. In fact? Regular people may even hate an actor or actress if he is a Villain on a TV show! It isn’t even real!

Things like this are beyond comprehension for most of our readers (the ones around a few months ago).

—-

With the rant over, we are going to allow comments for a total of 5 days before they are automatically shut off to avoid seeing more “comments” and “questions” from the regulars. We will search for an intern or someone else to monitor the comments on a weekly basis (we hope to have a solution by the end of the month).

In the mean time, since we’re clearly annoyed, feel free to fill the comments with bashing of regular people! They have temporarily ruined this blog so may as well get some entertainment out of it!

***We have not had time to post and do not think the issue will be solved near term. That said, frequent commenter *RE Guy* may have an interest in blogging and we’re letting him run with his own guest post today. We have not edited any of the content and will read the post at the same time as our readers! Please leave any questions/comments for him and he’ll likely respond.

Finally, our intern will continue to monitor comments and we are no longer answering questions on the blog. We will sporadically have FAQs on twitter and the blog in the future (likely a few months later)***

Game and Business Intersections

The purpose of this post is to explain some ways in which business and the seduction of women overlaps both as subjects and gaming women as a business (rich) man. A lot of these issues have been discussed here in one way or another and what I’ll do is offer my unique perspective as well as my personal experience. Also my main business is real estate so I’ll use examples from that mostly since I know it best.

Don’t fall in love with a house.

Overvaluing any one girl you haven’t slept with.

When it comes to making a profitable investment in real estate I have a well-reasoned and repeatable (in fact repeated) model for how to do it. Because of this I know that if I’m not finding deals, I’m not looking at enough houses and making enough offers, that is I’m not filling my pipeline and following up on leads. It’s easy when I start looking at a property and start negotiating to imagine how much money I’m going to be making and to start losing sight of the real goal which is to get in there at a good price. That is there is a temptation to rationalize paying more in the moment, especially with an adversarial party interested in extracting additional cash from me. This is the same mechanism at work with overvaluing women before you’ve had sex, and time spent trying to figure her out (if you’re spending time and energy thinking about her, you’re investing in her, what’s your ROI?). And she is (generally) trying to maximally extract time, attention, emotional energy and money before sex.

If I told you I needed to have this one house, no matter what the seller wanted to pay, and I was spending my time analyzing and angling with very little progress, you’d (rightly) think I was a poor investor; same with women.

90% of problems in game past the beginner stage (no basic model) are a lack of prospects. If you just grind out the sets and analyze your failures against the model (thus building a better model over time), you’ll get the lays and figure it out. Read Models, approach women regularly, gain experience over time and be totally detached from getting any one girl.

Have multiple sources of income.

Date multiple women.

Dating multiple women seems a common goal and question here. I’ve done this the right way, so I’ll offer some insights.

Similar to the above point about feeding your pipeline to create a realistic sense of value, if you only date one woman and have no workable model for finding others  there is a much greater risk you will over time tend to overvalue her and enter into a bad deal (i.e. marriage).

So starting with basics, why even have multiple sources of income, and when would it make sense to (temporarily) ignore this advice? My understanding is that multiple sources of income are to mitigate risk that any one source goes south, and expose you to more possible upside that any one source has exceptional opportunities. This is same rationale for multiple women, any one relationship can fail, and any one girl may prove an exceptional opportunity (should you be looking for that). You can also mix active and passive income to have flexibility in how to spend your time with a baseline income even if focusing elsewhere, similarly having a main girl or girls and the ability to go out shooting for one night stands.

The temporary exception may happen when you have a solid early career opportunity where you would work 70-80+ hours a week and make real money in short order. In this case it may make sense to just forget about working on multiple sources for now and focus on the one (while you become established). Similarly the standard way of thinking about multiple women is date 2 or possibly 3 7’s and then commit when you get an 8 or 9. But this is wrong. The problem is you’re tempted to start rationalizing every new girl who’s a little better looking or has a little better personality, instead of setting a firm goal that exists outside of any individual girl. That goal is to only commit when you have the opportunity and desire to have children, hence creating a “real” relationship (it’s going to last for the rest of your life). This has been discussed with the marriage post, but it seems by how some people are looking at dating multiple women that they haven’t made the connection all the way to

Not planning to have children now (or ever) = No real commitment to any single woman

This doesn’t mean don’t see girls for the long term, or invest in them and be supportive of each other, it just means until you want to create something permanent with her (a new person), there’s no good reason to remove yourself from the dating market (potential upsides). Generally speaking the women who will be most open to this will be in their late teens to their early to mid-twenties. Further if you’re better than 90% of guys out there because of all the work you’ve put into self-improvement, she will naturally become monogamous with you. The regular mindset works in reverse too; you’re the “9” to all the other “7’s”. As a side note you might drift into unofficial monogamy with any one, particularly if you have great opportunities at work and consequently ignore your pipeline/other girls. There’s nothing wrong with that, just don’t make the mistake of turning it official or seeing her more than 3X a week (seeing her more than 3X a week by the way, will very quickly turn it effectively official in her mind and you are almost guaranteed to have her put pressure on you to commit).

Also dating younger women is a value proposition like renovating real estate. For instance when I have to fix up houses, I’m finding them in various states of distress. I take on the headaches and enjoy the spoils. This is the same with dating younger women only with psychological and emotional distress (even with bubbly and mostly happy women a lack of wisdom = irrational thoughts/behavior = drama until teaching them). Now I could also find houses at market price, try to make them work, and some would be overall good packages while some would just look nice on the outside and have a ton of hidden problems (usually from deferred maintenance); older women are the same. Either way I’d need to alter my model drastically to make it a good deal.

The way to look at the situation is the same as when you have a job making 70k/y. You’re not going to get rich with that, you need to actively build out other options or you need to switch to a career with a lot more opportunity. You’re not going to have children with this girl (at least not now) so you need to focus on You Inc. to keep your options open (and she should do the same, growing, improving etc.), and as long as you have this proper focus the proper thoughts and behaviors will follow.

A final point, the reason of “not having kids” is what many modern American women use to justify continuing to be in casual relationships only (and often to the emotionally distorted point of “hating” kids). Good for them if they are rational about it (i.e. “I don’t want kids now but I do around when I’m 30”), although it makes her less likely to drift into monogamy with you. However, the ones to watch out for are the ones who “hate kids” when they are young (and often compensate by sublimating the maternal drive into small animals), because often that maternal drive will return with a vengeance around 27-29 and then they will want kids with reckless abandon.

Capitalism as a capitalist means creatively combining resources to produce value; Money, Labor, Land, Knowledge, Technology, Network etc.

Seduction as a man means creatively combining resources to produce value; Money, Looks, Status, Game.

Now we can look at the “Rich guy can’t get laid” trope and see where it comes from and how to avoid it.

Being rich only works against you if you rely on it via leading in with it i.e. “Can I buy you (and your friends) a drink?” or if you become a charmless type A person in pursuit of becoming rich.

If you try to get a girl to evaluate you based on your resume, don’t be surprised when she takes it as a boyfriend application.

I’m speaking from experience here because I fell into this trap which is easy when spending a large portion of time making money and having a well above average income. It’s just easier to buy girls drinks when a $200-$300 night doesn’t even register, but it’s cancer to your game. I also found my way out.

So the main problem with “Rich Guy Game” is that a girl sees the guy as high value, but that value has to be extracted over time and it’s not of the sexual kind. This can lead to girls trying to slow down the seduction process either in general or as last minute resistance (leaves the bar with you, sees your car/house, turns into a “good girl”). But here’s the important point:

With wealth or any high value trait you have the girl’s attention, what you do with that attention is a function of sales.

Here’s how to deal with it, and this applies to any high value trait other than looks (i.e. intelligence):

Patient gentle persuasion that sex with me will count for, not against her. (“I see, I’ve always noticed i get along well and fast with all my previous long-term girlfriends”)

As an aside, this should be true anyway. Why would you value someone more who doesn’t give you want you want and less if they give you what you want? That’s neurosis. And to be clear I’m not referring to banging a six one night because it’s easy and quick but not even bothering to take her number (or taking her number, texting her you had fun, and never attempting to meet her again), or the gradual dulling of pleasure from banging the same girl for months (or years).

I explain that I will prioritize my time with a girl who I’m having sex with over one who I’m not, all things being equal. The same is true with all people, someone who intellectually engages me, and is giving me constructive emotions will be someone whose company I enjoy, now add that we’re going to be making bank together and I’ve got a potential new lifelong friend. Occasionally rich guys without game if they get this far at all use the wrong methods, like looking at it as they need to value their time (true) and actually verbalizing something like that (bad idea, she’ll feel objectified).

I’ll add here an observation and an anecdote.

Simple example that is gratuitous and easy to see: Dan Bilzerian. He’s fit, has decent fashion, has game (saw him eating with mystery, at a minimum he’s learned the formal theory) and he not only has money but he spends it. He appears to be with a parade of 8’s, 9’s and 10’s.  He also has status in the form of fame and otherwise. So he’s an example of a rich guy who gets laid like crazy (it seems).

An example of a rich guy who doesn’t get laid (or pays far too much for it):

I was once at a big name festival where I met an attractive young girl. She was being taken care of by a rich guy, her and 9 other girls. They each were given a VIP ticket, hotel accommodations, travel was paid for, and they got spending money. This had to run him at least 2k-3k per girl. But he was fat, had bad fashion and little game. When I met one of these girls I along with two of my friends each paired off with her and two of her friends and we all got laid. The end result was that this guy paid 10k for three random guys to bang three girls (thanks for the room service!). Now all the girls claimed they didn’t hookup with this guy and just took his money (I believe they associated with him on an ongoing basis), and that’s probably not true. I would be surprised if he kept paying for their expenses and never got anything out of it. But they were all embarrassed to be associated with him sexually, and they were eager to each find a fit, cool guy to hook up with instead if they could do so without him finding out (they ditched him to come with us).

Two guys, both rich, drastically different results depending on all the other factors besides money (and I’m sure if the guy could spend 30k+ for a weekend he could afford a nutritionist, personal trainer and social skills coach).

If a man can’t tell the difference between a rich guy without fitness/fashion/game and a rich guy with fitness/fashion/game, then that man does not possess good fitness/fashion/game. Thus any guy claiming rich guys can’t /don’t get laid lacks good fitness/fashion/game.

Now is there a school of thought that says be her “Alpha bad boy” or something and make it clear you can only offer her sex etc.? Yes. Does this get good results? I don’t know; I haven’t seriously pretended to be poor (although I will joke about it, which is funny because I’m clearly not). I don’t hide my success or flaunt it upfront; I use it like a tool when it’s appropriate. I’m fairly certain that this other technique is a way for guys with less financial success to occupy a niche and grind out better results than they could get in more regular markets. Good for them. I don’t begrudge anyone in a capitalist pursuit; if anything I intend to learn what I can from their experience and discard what doesn’t apply to me. Logically however, if the choice is between being the “Total Package” or having to angle to make up for deficiencies, having it all will always be better than not. This leads me to my next point:

Become a millionaire through real estate investing with no money down.

Bang hot models with game and without looks, money or status.

I have several friends who have done exactly that, millionaire in three to five years, real estate investing with no money down (none of their money that is). Here’s the common traits:

1) Relentless hustle

2) Singular focus

3) Willingness to let other areas of their lives slide

4) Very good or great at sales / persuasion

On the other hand I don’t know anyone who bangs hot models without looks, money or status (guess we don’t run in the same circles). However I’m inclined to believe he could exist if he had all four of those traits (and lived in an environment where they were abundant, i.e. New York, Maimi, LA). But why do that? If you’re going to sacrifice other areas of your life (3) then you’re far better off having an abundance of the most readily convertible form of social value at the end of it (that is the literal purpose of money, they’re “social checks”). And before the claim is made to use game to make money etc. refer to number 4, I know there are a lot of definitions of “game” around but (4) + sexual intent/skills is one most reasonable people would agree on (perhaps add the ability to relax, have fun, joke around, have an off switch if you don’t include that in (4) etc.).

So if you wanted a clear explanation of why to focus on business first and game second, that’s it.

And if you wanted an example of someone who focused on business first, became financially independent, and then focused on game, that’s me. I’m not saying do what I did and neglect your social skills in favor of making money, but I am saying it’s a lot easier to fix that or any problem when you’re able to remove any financial constraints from your time.

We’ve been busy to say the least. That said, we did get the chance to purchase our friend mike’s book “Gorilla Mindset”. The bad news? We are only 30 pages into it and will read it when business slows down.

We see eye to eye with Mike on a lot of topics and think that many readers here will benefit so we’re going to give it away (a hard copy) to ten readers of the blog.

1) Leave a quick comment on why we should send you a copy

2) Please provide a one paragraph review when you’ve finished reading the book (5 or more clean sentences)

That is it. Provide your contact email when you leave your comment and we’ll take care of the rest privately via email.

***the giveaway is already over. For those that are skeptical we are paying mike cash and will not alter any words on the actual book review. We simply don’t have time to read at this time so this is a cheap option. Coins really.***

***As noted in our Start Here section we are no longer answering any questions, only during sporadic Q&A’s for subscribers and once every quarter or so on Twitter***

Before we begin, everyone should take note that a smart person can play dumb but a dumb person cannot play intelligent. A smart person is simply spending 20-30 minutes to triangulate if someone is worth knowing or if they should be thrown straight into the acquaintance bucket.

Our friend (yes one of us has met him in person) over at Financial Samurai has a similar post that everyone should check out as well. Ours will be a bit different of course. In the end, yes, acting dumb is going to get you much further in life than pretending to be smart which is what the masses attempt to do.

There are really only three categories where you will be forced to play dumb: 1) Business/Personal Finance, 2) Friends and 3) Dating.

Unlike our other posts we’re going to go straight for the jugular and explain how pretending to be dumb is going to change your life financially. In short, people are *not* created equal. Once a person reveals themselves to be of no value, drop the contact and don’t bother. Life is extremely short, you don’t have time to take coffee meetings with people who are not going to go anywhere in life. Will you be correct 100% of the time? Nope. Just play the odds.

Is this “mean”? Yes. It doesn’t matter. You need money not feelings.

How to Play Dumb in Business/Personal Finance

Lying About Your Knowledge Base

This is the master key to playing dumb. Learn this skill and you’ll save yourself hundreds of hours (wasted meetings/ventures). If you can obtain a baseline understanding of multiple businesses you’re going to use the following as your gateway line:

“Hey, you know, I’ve never really looked at XYZ before. I just wanted to say you’ve done a good job building XYZ (type of business), I’m interested in learning more about it. I’m happy to pay $X for an hour of your time.”

While the underlined sections will go overlooked to the untrained eye, they are key parts of your pitch. Ideally you can get the person’s time for free, but it is usually best to offer some small change to lock in the hour.

When you make the statement “just wanted to say” or “just wanted to let you know” this is usually a phrase used by people with minimal education. You want to *appear* to be a dope in this group. (There is a reason it is used in ads all the time.)

Now… With the backdrop set, you force the person to reveal his cards. Prior to the meeting ask for the following: 1) an example of a successful transaction/business deal and 2) high level numbers for margins, average selling prices and net profit.

Once the numbers are out you’re just using the triangle approach. You ask for two “unrelated” data points spread out across the meeting to get to the third point and see if the guy is a liar or if the business is worth it to you.

Example:

– Early in the conversation ask for a tax number

– In the middle of the conversation ask for a unit shipment number

– At the end, ask for a high level conversion number and to *really* make it seem like you’re dumb… ask for the ASP number again as if you “forgot”

You now have all of the information you need to determine if the business is worth investing in. If the above bullets don’t make sense… simply re-read them and you’ll figure out how the person is trapped into giving out all of his metrics over the course of an hour.

If you really want to confirm your suspicions then you go for the tried and true “Hey I don’t really know anything about XYZ you just mentioned can you explain the basics to me”. You use this line when the person is extremely confident about his knowledge base on the topic. If he slips… you know he’s not on the same level as you. It’s time to ignore everything he says after that.

Never Reveal Net Worth

Under no circumstances do you ever reveal how much you are worth (loss of bargaining power). This seems like common sense but regular people tend to give this information out like it is their first name. Don’t bother telling your best friend or even your relatives (the rule applies 100x heavier with regards to females).

The only situation where you want to use money is if you’re leveraging it on dates (you can use money to seal the deal but never reveal your actual worth). That is all.

Never tell a male how much you are worth because he will try to tear you down. Why? He thinks that he is your equal because you are roughly the same age (he never is and is usually dumber than rocks as well). Men are hands down the worst because they will go out of their way to be nosy, while women will simply try to gold dig which is easily avoidable (don’t give them any $$!)

When it comes to money and being around males, you simply pay 5-10% above your fair share in every situation (group tabs drinks etc.). Don’t bother being the cheap guy or the rich guy. Both are hated. By setting the bar just a tad above average you’re just a “nice guy”.

Here are some key ways to kill conversations regarding net worth and even income.

When asked about property say:

“I haven’t moved in forever still at the same place for 5 years!” (hint don’t bother with house parties unless you want to lose money over time). They will assume you haven’t materially moved your income over the past 5 or so years. You can move if you like.

When asked about your current job function compared to industry averages:

“I’m in a weird position where they just changed my title to keep me around, so it’s not really moving the bottom line much to be honest… kinda sucks” They will believe you are well below industry averages at all times making it harder to become envious.

When asked about vacations say:

“Ah I just go to cheap places, tier one destinations get pricey”

If asked about net worth directly by an extremely nosy person:

“Honestly I don’t know, a lot of student loans mess it up”

Playing Dumb in Your Career

By the time you’re in your early to mid-30s you should be generating $1M+ per year or more for your Company. You already know how to play dumb but it’s time to take it to the next level.

Any sales position or revenue generating position is always about $ output versus cost. Most people think that if they are paid $300K per year or $1M per year then that is the metric that will determine if they are up for layoffs. Entirely false.

You’ll hear a lot of stories about how a “high performer” making $700K per year was replaced by two “middle level” performers at $250K. In reality? The person was being paid a higher percentage of total compensation relative to revenue.

For example, if you’re being paid $400K it means you’re usually responsible for roughly $2-4M in total revenue. Now if you’re extremely intelligent, you actually want to be paid *less* than $400K so you’re next in line for the “land grab” internally. What is the point in pushing for a higher percentage, say $450K, when you can wait it out for a slice of the next totem to fall in the $1.5M range?

We’ll stop there because it won’t make sense to a lot of people. The implied message is clear. We’re in a bull market so people are attempting to increase their percentage of compensation relative to revenue (we’re using a wide range of 10-20%). All of these people will be fired in the next 2-3 years.

Lets say you’re currently being paid 14% of total revenue while all of your peers are being paid 17-20%. The answer is simple. When the next round of layoffs come you should attempt to “land grab” from the 20%ers that have enormous books of business. This will make it incredibly easy for you to see a hockey stick improvement in your total income.

If big wig person A is making $1.5M per year and you’re cruising along at $500K while generating more revenue on a relative basis. You are a clear and obvious candidate to displace person A in an environment that needs to be right sized.

You only push for a higher percentage when you’re ready to quit because you’re next in line to be pushed out the door (regardless of your fake performance reviews).

Playing Dumb as a Manager

A good manager is a happy one who never says anything negative about his team. This is where you want to be. Never say anything negative about anyone associated with you and simply prevent them from gaining traction on your actual revenue source. Easier said than done, but it is achievable.

Most managers micromanage aggressively and attempt to “prove wrong” any work turned into them which adds additional stress to their lives. Waste of time. A smart manager will simply make tweaks by himself and let the person run with glowing reviews.

Why is it better to run like this? No one on your team will be able to honestly say you’ve done anything bad to them… giving you first dibs at important decisions. If someone is stellar with their work, you give them an opportunity to sabotage you on a low scale (if they don’t you can promote them) and if someone is a poor performer you simply say there is “no room for promotions” until they get the hint and leave.

How to Play Dumb with Friends

You Only Want Powerful Friends, the Rest Are Acquaintances

As noted at the top of this post, people are not created equal regardless of the sewage they forced you to drink in college. There are only two groups 1) future winners and 2) current winners. The rest? They encompass the masses.

If your friends are not in either group, they are going to drop off your phone eventually. You can attempt to keep them around for sentimental value (see feelings). But. The structure will break down eventually as your lives depart into very different directions (for better or worse).

1) Future Winners: This is the most under-served market in the world. Most people attempt to suck up at all times to powerful people… when they are better off networking with future winners to have a group of good business contacts in the future. It is incredibly easy to see if they are going to be future winners. Simply ask “Can I predict what this person will be doing next year?”. If you are correct, they are not worth investing in.

Future winners have the *highest* return on investment. Why? As they try to climb the ladder everyone else will try to drag them down. They’ll remember who was on their side when they were at the bottom.

2) Current Winners: The biggest mistake here is building relationships across the board. Not all winners are going to help you in the future. In fact? Most are insecure and negative people who won’t help you even if you deserve it. Do your best and ask “Is this person going to go to bat for me down the line?”. If the answer is yes then invest heavily. You can find the no answers extremely easily (if they are 40-50 they should have at least 5-10 success stories).

Now you’re probably asking… what does this have to do with playing dumb? Everything.

In a word? *Reciprocity*.

Future Winners: If you find a diamond in a pack of mediocre people (usually 1 out of every 20th student graduating from a target school) then you want to act as the information source. Provide the person with as much information as possible on all the topics he needs. In the future he’s going to remember it and add your name to his own rollodex of contacts. 5 years down the line you can hire him.

Why later? He’ll be ready for a promotion (likely burned once at a different firm) and the long standing history with you will create a solid foundation of trust. In short, you’re investing “blindly”. In reality… it’s actually an incredible investment for both of you while it’ll appear to be “dumb luck” in the future.

Current Winners: Similar to finding talent, finding a person in power who is willing to pull a coat is extremely rare. If you find one? The goal is to simply mirror or reflect, the person he was 10, 15 or 20 years ago in yourself. Once he sees that you’re essentially a version of himself many years ago he’s going to have a hard time *not* investing in your future.

The key to playing dumb in this scenario is to pretend you’re less versed than he is on a particular hobby or subject. If you’re actually better than he is at XYZ (lets use golf as an example), simply ask him for tips on your swing and report back later that you’ve improved at it *because* of his advice. The worst thing you can every do is ask for advice and not take it. Once advice is given and not taken, even once, he’s not going to bother wasting his time with you ever again.

Every word in this section is going to be extremely obvious for anyone of means (lets draw the line at $1M net worth). The vast majority of people won’t be able to execute on it. Pitfalls include: 1) trying to one-up people who are above them – relationship is ruined forever, 2) not handing over responsibility to future winners – need to give up control to free up time for more important items, 3) not doing background checks on the person they are networking with – wasting years of time investing in the wrond person and 4) wasting valuable time with dead weight friends – if they don’t change in 1-2 years they won’t turn it around ever**.

**As a side note, there are extremely rare situations where a person turns it around… But. It’s not worth the headache. For every last minute success story there are 10-15 other people who are worth your time.

 Playing Dumb to Maintain Friendships

With the backdrop out of the way, you also need to play dumb in order to maintain friendships in the future. People in general are nosy. If you doubt this fact, then Facebook would not exist.

Once you have a set of people who are all successful on own (regardless of business line) you should always be impressed with any accomplishment they achieve. Never for a split second do you allow them to even *think* you’re not impressed.

If your friend makes an additional $5K or $20M in a year, you’re going to act like the person won the lottery and never ask for anything. No exceptions. Remember, under no circumstances do you ever reveal your income or worth. Nothing good ever comes of it anyway.

How to Play Dumb When Dating

Most guys are worried about gold diggers. Naturally, this means they are *absolutely* broke. Anyone who is well off knows that a gold digger cannot get “gold” if you are 1) never married and 2) never give her any actual money.  Therefore… who cares? You want to play dumb about your actual worth and let her fill in the blanks without you telling her. As they say life is “sold” not “told”.

There is a material divergence here compared to the first two sections of the post. When dealing with money/business you want to lie down. Let other people show their cards before you bother proceeding and you want absolutely no one to know you’re well off. In fact it is better if they think they make more than you.

Dating is the reverse. Your only goal is to flash enough money to avoid being thrown into the potential husband category. This is art not science and we have a overview in our post on doing the opposite.

Pay off the following people: 1) hostess, 2) bouncer, 3) bartender and even 4) tipping an owner of the venue.

Now you’re *clearly* not a boring  male who goes on dinner dates. Once that is good to go you adjust your wardrobe to be more loud and fun. Once you’ve established a “just for fun” vibe with a gregarious personality in a well dressed outfit… She’s going to figure out the rest by herself.

Playing Dumb Review

1) To beat a dead horse. Never tell anyone how much you are worth or make. Ever. If you are forced to? Lie down well below what the person makes (the person you are speaking to)

2) Be astonished at any financial accomplishment of a peer

3) In a business setting set a “trap” where you can back solve into numbers you need

4) “You’ve never heard about this and want to hear more” because “you just wanted to say” how impressed you are by their business

5) Careers are about return on investment and “land grabs” or client base. This is why many high performing people are laid off. They were at the top end of revenue generation, but also at the top end of percentage of revenue paid out

6) You have student debt. If you don’t? You do now that you’ve read this sentence!

7) You have lived in the same place your entire life according to everyone you meet

8) Your title is not indicative of pay because they don’t like you enough to give you money only enough to give you a “title”

9) People are not created equal and you want to increase your income not your “feelings”

10) Gold diggers are fantastic!

***As noted in our Start Here section we are no longer answering any questions, only during sporadic Q&A’s for subscribers and once every quarter or so on Twitter***

We held a Twitter Q&A relatively recently and came up with roughly 10-15 topics to discuss. Instead of inefficiently talking about each one in separate blog posts we are going to address them all in one post so we can move on to more interesting topics in the future.

1) Don’t Blog for Money: We have covered this already in a long post and people continue to pester us asking why we don’t start selling products and why we don’t recommend it as a source of income. In short? It is a colossal waste of time. We’ve contacted many top tier bloggers and have even met with a few personally (we draw the line at $150K+/year in net income as a good blog). Why is this a waste of time? Everyone seems to ignore the *time* it takes to get to $150K in income. In short, it takes roughly 3-5 years to get close to $150K in income. This is not worth it. We reiterate. This is not worth it at all.

Digging deeper, once you get to a good income ($150K+ as the line) you end up being forced to do *exactly* what affiliate marketers do in the first place. Create content for the masses and click bait type posts. “Top X reasons for XX”, “How this high schooler makes $100K+ year and you can too”, “Two obvious reasons XYZ company will go bust!”, “How this college campus janitor day traded to $XM net worth!”.

Again. We have no problem with blogging for money or affiliate marketing for money, just make a decision on what you are doing it for. If you’re actually blogging for fun and realize you’ll be forced to address larger audiences in the future. Go for it! Making $150K+ for something you *enjoy* is absolutely a success. Making $150K+ doing something solely for the *money* is an atrocious failure of a project. A good affiliate marketer will make $300K+ by year 2 if he’s got a knack for sales.

2) Multiple Forms of Income: When the market “tanked” ~4% in a day, everyone believed this was the “end of the cycle”. In short? Who cares. We’ve said over and over again we do not care what happens to the stock market. Even if our careers are put in jeopardy, we have multiple forms of income anyway so we don’t care one bit. No one with a high net worth cares about the S&P 500 daily movements and yes a 3% move is just a basic anomaly that should be ignored.

For those that are not following along, this is *not* talking out of two mouths. We have said this over a hundred times on the blog. You take any extra income you have and you just dollar cost average into index funds, bond funds and continue focusing on 1) your business, 2) your career and ideally 3) another business. In our view, by the time you are 30 you need to have at least *three* forms of income. To put a definition around this… it means that all three forms of income could cover *all* of your living expenses. Simple math? If you live on $2,500 a month then you need to have $7,500 of income per month by the time you are 30ish. Therefore if your career goes away for a few months or a year… You don’t care. If your business starts to go cash flow negative then you shut it down and move on. In short, you’re not putting your livelihood solely in the hands of another person. Anyone who does this deserves to fail.

3) A Million Dollars is *Easily Achievable*: Here are two fun facts. Roughly 17% of Singapore’s population has a net worth of over $1M USD and there are only ~10M millionaires in the USA or roughly 3% of the population. Insane.

The United States has the best economy in the world, yet people spend their money trying to impress the masses (people who don’t matter) and cannot see the 7 figure marker until they are well into their 60s (dead).

Knowing these two facts, there is literally no excuse for someone to not be a millionaire by the time they are roughly 35 years old. If they are not worth 7 figures by this time they made some bad life decisions or they didn’t want to be well off in the first place. No other real explanation. If someone is middle aged and explains that they never had the chance you know they are lying to you and if they explain that they made some mistakes then they are telling you the truth. It really is that simple. The math doesn’t lie. Assuming a person is smart enough to generate 6 figures per year for roughly 15 years, the investment returns will get them there very quickly.

4) People Want Feelings Not the Truth: Once you realize that people don’t want the truth and they just want to feel better about themselves, you’ll become a much better sales person. Many people will read the three paragraphs above and become upset because they think it is talking directly “about them”. Being triggered by the truth is a tell-tale sign that someone has made bad decisions and is not willing to admit to them. Blaming anyone but ourselves for our problems is a coward’s way out and that’s why successful people are incredibly competitive… with themselves.

When it comes to speaking with the masses be sure to massage their feelings and when you’re looking to hire someone on your team become direct and to the point. There is no need for feelings when you’re trying to get something done and it is only used as a tool during social events.

5) Donald Trump for President: No question this is the only person we would ever vote for and ties very well with point number 4. People are politically correct because they are afraid of offending the lowest common denominator. The haters and losers in life that no one cares about.

The pitch for Donald Trump is really quite simple.

– Do we want a President who has self funded his campaign and has no ties to other entities?

– Do we want a President who is results oriented and doesn’t care about being politically correct?

– Do we want a President who is willing to stand up to a notorious Mexican Drug Cartel?

– Do we want a President who has built a multi-billion dollar enterprise by negotiating multiple red-tape transactions?

– Do we want a President who doesn’t apologize for his opinions if it hurts a person’s feelings?

The answer to all of these questions is Yes.

We realize this recommendation made us lose 10-20 followers. Oh well. Here’s an additional music video solely for the laughs.

6) If You’re Associated with Them… Drag Them Up: A lot of mediocre people have a hard time understanding this concept and think that this website is about “screwing people over” and “burning people”. This is what you call an imbecile.

Instead the message is that you need to have an *extremely* hard filter when deciding who you link up with and after that it is on you to drag them to the top of the mountain with you.

A good example is hiring a person for a job. If you spend 2 months searching for the best candidate and you hire them it is *your* responsibility to make them look as good as possible. That is called being a good manager/leader or whatever word you so choose.

If you hire candidate A and you think he’s going to be an A+ person and find out he’s only a B+… Too bad. You signed off on it. You approved the hire. You are responsible. You have to find a way to turn that B+ person into an A+ person over time and you have absolutely no right to complain because you were the decision maker.

If you can understand the paragraph above you’re going to add a “turbo boost” to your career and your business. Why? You’re forcing everyone in your pool to gain responsibility as fast as humanly possible. If everyone you hire ends up going up the food chain or gaining responsibility faster than his or her peers… Guess who gets credit? You both do. You look like a fantastic leader and the junior hires all look like rock stars.

7) People Aren’t Going to Like You: A lot of people worry about *some* successful people not liking them. They should stop it right this instant. You’re not going to get along with everyone and as long as your rolodex is *improving* you’re doing it right.

Lets assume you have 10 people in a room. By default 5 of them are not going to like you too much and the other 5 will give you a shot (hint hint even presidents generally have ~50% approval ratings).

Of those 5 people who will give you a shot the *only* people who matter are the successful ones. The key to getting ahead in life is not keeping in contact with all 5 of the people but only keeping in contact with the one you think is going to be a winner (later) or is a winner (now). That is the only way you’re going to get better in life. No one gets better by keeping in contact with the same old people doing the same old stuff year after year after year.

8) Don’t Try to Win People Over: This is a classic lesson learned in sales. Don’t bother trying to win people over who don’t like you! Move on! There are millions of people in the world and you’re better off going after that blank canvass than trying to clean off the mess that’s already in front of you.

We really should do a full post on this but it really would be boiled down to two sentences.

“Once someone does not like you it takes 3x as much effort to turn it around. That means you could have three more contacts instead of one fixed contact.”

A great example is our Twitter page, we’ll give people a chance once in a while even if we think they are idiots. But. Once they cross the line, we just block them and move on. Eventually when your life gets busy enough you’ll do the same and… what happens? You obtain even more friends!

Whenever you find out that someone doesn’t like you, simply remove them from their life. Even if you can “fix” the relationship it won’t be worth it. You could have built 3 new ones anyway.

The *only* time you should be concerned is if the relationships you’re winning are from average people while the relationships that are ending are from successful people. Other than that this is how you should operate. Remember the 3:1 rule and you won’t worry about a person disliking you.

9) Free Speech is Reserved for the Financially Independent: If you care about your freedom of speech then you better get your finances together. You do not have free speech if your entire livelihood could be taken away from a Facebook post (hint: have zero personal ties to social media until financially independent).

In our current “politically correct environment” you’re better off keeping your mouth shut until you’re rocking and rolling. After that you’re free to say whatever you like because no one can touch you.

The key to happiness really lies at that sweet spot. Where you can work alone, live alone and say whatever you like without a care in the world. If you’re in this situation, you’re only going to work with people you enjoy and that will make the project or business operate even better.

10) Wall Street Compensation Update: We got a lot of questions here, and again it looks like the bonus pool will be flat to slightly up depending on your bank (assuming Q4 is not a debacle). All in compensation levels are around the same level as 2006.

Analyst – Base $80-100K (100% targeted bonus) 160-200K (age 22-25)

Associate – Base $120-160K (100% targeted bonus minimum) $350-400K if you are promoted to VP (age 26-33, wide range due to young talent and MBAs)

VP – Base $175-225K (100%+, call it 125% targeted bonus due to revenue generation) (age 30+)

Director – Base $225-275K (Variable call it 1.5x base salary target due to revenue generation) (age 32+)

Managing Director – Base $300-400K (Variable, call it 2x base salary as a target due to revenue generation) (age 32+)

The only material difference over the past decade is that the mix of income has changed a bit. More and more banks are offering higher salaries and lower bonuses. But. Again. The all in number is roughly the same as it was back in 2005/2006.

—

Side note: We haven’t had much time to blog and this will likely continue in the near future due to other obligations.

We’ve received many requests for elongated explanations of some tweets so this won’t take us long. Below is a quick review of the top 10 tweets so far this year by numerous “twitter metrics”. We’ll go ahead and explain the comment in more detail below and provide a link to the content as well.

1) “People don’t understand. Money is not for a fancy car or home. It’s to be free. To say f*** you, I don’t need this… And mean it.”

While average intelligence people will read this blog and immediately assume it is about bottle service and fancy cars… It’s not. While there is nothing wrong with either of them, people simply don’t deserve high end lifestyles or a fancy car if they *have* to work for a living. Once you’re able to say “F-You” to anyone who tries to *limit your freedom* then you can do whatever you like with your money and time. Most people who reach a high net worth find a lot of value in working with other successful people. But. The decision to work with other people is entirely in your hands.

The main takeaway is simple. Until you don’t have to do a thing. Literally. To pay for rent, food, utilities, clothing and a couple thousand dollars for fun… You do not deserve a fancy car. Once you’ve made it to this point, feel free to buy that private island in Thailand with your extra money.

2) “Losers: “Omg everyone inherits wealth” Winner: “No, look at a list of billionaires/millionaires *most* are self made” Loser: “Privilege!””

As you become more and more successful you will find the following trends: 1) people will claim you were born rich, 2) people will claim you got lucky and 3) people will claim you somehow used other people to get to where you are today. These are the three most common excuses for pathetic mediocre people who will never even make $150K/year (something you can make out of college at 21 years old).

The cold reality is this. Most people who become rich were not born rich. For those that don’t believe this, simply do the research (but “naw thats too much work man!” – another common excuse for mediocre people).

As soon as someone makes a comment that is akin to any of the three mentioned above, delete their number. They are of no use to you.

3) “7 deadly sins for a recent college grad (male): 1) consumer debt 2) kids 3) wife 4) mortgage 5) dead end friends 6) obesity 7) job you hate”

While we’ve moved away from talking about life advice for people in their twenties if you avoid the seven items above there is practically no way you will be below average. The average is extremely easy to beat and all you have to do is avoid the major pitfalls.

Most success advice or “life coaching” advice is about “becoming all you can be!!!”. The reality? by simply avoiding major mistakes you’re going to be much further ahead than all of the motivational kool-aid drinkers.

4) “Hating something implies it impacts your emotions. Have hate for no one. Let useless people drown in their own stupidity, misery & pessimism”

Hate is an overblown word. The best way to describe most people you dislike is this: “immaterial”. If you really hate someone or are triggered by them… Then they usually have a point. If on the other hand, they can yell in your face and you sit still emotionless… Then you really don’t care about them.

In general, most people are not worth talking to if you’re on large platforms (such as the internet) so simply give them the benefit of the doubt near-term and once you realize they have no value… Put them on ignore. This is similar to caller ID blocking on your iPhone, by the time you’re in your 30s… you will have at least 100 phone numbers blocked and sent straight to voice mail.

Don’t bother arguing with them, just ignore and move on. They will fail on their own.

5) “Hard work = number of problems solved; Idiotic belief of hard work = number of hours worked”

We have a separate tweet that helps explain this quote. If “hard work” is all that it takes to get rich then iPhone factory workers would be multi-billionaires. Instead? They are broke.

We have talked about hard work for three years on this blog and we stupidly didn’t realize people were misinterpreting the phrase. Hard work is *not* hours works. In fact hard work is 100% unrelated to “labor” and is tied to mental exhaustion instead.

Here is the definition of hard work when we talk about it: “Solve a Problem”.

Every second you spend digging a hole with a shovel while your competitors employ a construction crew with dump trucks is an embarrassing waste of time.

The more problems you solve the more *skills* you have by definition. Think about any field and the skills that people demand are always related to a problem they have. Find a way to efficiently solve problems.

6) “Politically correct people are always p******. Scared they might offend the losers in life who are upset by “tone” and the truth.”

Don’t need much explanation here. The vast majority of people care more about how you say something than what you actually said. This is sales 101 and a complete and utter joke to those with more than five brain cells.

When interacting with people, you have to conform to “feelings” and the “tone” of your message if you want to make money. There is no going around this. If you attempt to sell a product based entirely on facts you are going to lose every single time. The only person who will purchase based on the facts is an intelligent man/woman. That encompasses 5% or less of the entire human population.

Recognize that the “masses” is the best market in the world, so you need to sell them feelings to make money. Don’t forget it. Offend them in any way and they won’t pay.

Pro-tip: Never tell someone they are responsible for their current station in life. Place the blame on something else “out of their control” so they *feel* better about their previous decisions.

7) “Remember, if you apologize you are admitting you are wrong. Never apologize if it is simply a matter of “feelings” from the truth.”

Never, never, never apologize if you are correct. This goes for every single segment of your life. If you are correct, then there is no point in apologizing for any of your actions.

That said, this does not mean *never* apologize. If you are factually wrong then state that you were wrong. State it bluntly and never make the same mistake again.

If you apologize when you are correct you are telling the person or entity that they have more power over your life. The intelligent people who read this blog will be financially set by the time they are 30 which means that no apologies should ever be given unless factually incorrect.

Note: To people who are not financially set, you are *forced* to conform a bit. If you only have $200K in the bank, it is not worth it to ruffle the feathers of a multi-millionaire you dislike and you’re better off pretending to agree with all of their opinions. This is not a contradiction since you’re maximizing your own life by avoiding conflict to get ahead.  You want to be *free* which is the first step to living your real life.

8) “Talk to two people: Attractive girls and people who can help you make money. The rest are just wasting your time leeching”

This one is directed at older readers. By the time you’re financially set you’re going to have a small group of friends who are also in the same general ball park. Beyond that, you’re not going to want to waste your time with “value subtract” people.

Does this mean you only talk to people who are better than you? No.

If someone is young and has potential you may want to hire them. Keep in contact.

If someone is older and can generate business for you in the future. Keep in contact.

If someone is able to help you get into clubs and bars… Delete his number.

So on and so forth.

9) “Step one to success is not caring about the opinions of regular people. You’ll be so far ahead by simply avoiding their influence”

Honestly, spend fifteen minutes and look around.

Do you want the lives of the people you spend your time with? If not then you have to overhaul your contact list immediately.

If regular people had anything intelligent to say they wouldn’t be regular in the first place.

“That is so mean!” … Okay but is it true? If regular people that you *don’t* admire are all telling you to follow a specific life map then it is probably best to throw that map into the garbage.

In fact, you can use unsuccessful people as a litmus test. If you have an extreme idea that is financially profitable for you then ask a regular person if it makes sense. Naturally, they will shoot it down which means… it’s a brilliant idea.

When idiots disagree with you, you’ve got another positive proof point.

10) “Life cancers: 1) negative people, 2) a selfish family, 3) career you hate, 4) media consumption, 5) search for a quick fix. You’ll be ruined”

All five of these items are self explanatory and will ruin your trajectory over the long-term.

1) Negative people and complainers usually aren’t succeeding in anything… otherwise why would they spend their time complaining?

2) A supportive family is great. A selfish one is just going to drag you down.

3) Doing something you hate will create an unhealthy amount of cynicism over the long-term.

4) The media is targeted at the masses (remove the M in the last word for further explanation).

5) Nothing is fixed quickly. When you are young you’re a jetski and you can change directions quickly. Hopefully, you make the right *long-term* decisions as you turn into a sail boat going in the correct general direction. By the time you’re 40 you’re a tanker ship with the course practically decided, ideally towards that private island in Thailand.

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As a side note, tweet of the year for 2015 goes to our friend Mike Cernovich hands down for this one:

“How to stop #cyberviolence:  1. Change notifications to “people you follow.” ; 2. Don’t name search yourself;  3. Have your 13th birthday”

Laughed out loud from this one. While other countries suffer from violence and starvation, the USA suffers from mean words on a screen.

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***While we are not taking personal questions, we will answer *clarification* questions for any tweet in the comments section of this post. If a question is unrelated to a specific tweet it will be deleted immediately to avoid “spinning” a tweet into another redundant personal question we have answered in the past***

There is nothing wrong with thinking like the masses in a survival situation. In reality, most people follow the herd because it is a survival instinct. If we dropped a random reader into a remote area of the world with no contacts, no social media (God forbid) and no electricity or access to shelter… The correct move would be as follows: 1) observe other living animals eating/moving towards a source of water and 2) consume similar foods and ration out water to survive. Pretty simple right? Unfortunately, this tactic only works to survive and doesn’t get you much further in life. Eventually, you’ll be forced to think differently and avoid doing what everyone else does to get ahead. In this post, we’ll go ahead and outline numerous examples since it is not possible to teach someone to think exactly as we do.

People are Not Equal. Throughout your life you’ve been told to “treat everyone equally”. This is horrible advice. If you follow this motto in life, it will be nearly impossible for you to build relationships with the right people. Instead, your goal is to find the winners and link up with said winners. We’ve said it numerous times on Twitter, but at the end of the day, winners like winners and losers like losers. Never, under any circumstances do you work *with* or *for* a loser. You will get 100x further in life by working *with* winners (emphasis on the word with and not “for” as they are unrelated).

Utilize Probabilities. If you do what everyone else is doing, you will end up like everyone else. This certainly prevents you from becoming homeless and living on the streets begging for change, but it also prevents you from living a better life than the masses.

For our non-finance readers, unfortunately, the best example is Wall Street related.

If you deem yourself to be more intelligent than your peer group then there is no reason to follow the herd. You have to come up with a differentiated strategy. In the world of finance, most junior employees focus on “financial modeling”. But. Less than 10% of junior employees (Analysts and Associates) will ever see a single day as Vice President at their firm. Let alone Director or Managing Director. This means you should probably be focusing on other tasks (not financial modeling) which would be… Sales. Every single position on Wall Street (excluding Quants) becomes a sales role at the end of the day. Even the buyside becomes a sales position as you need to raise funds. In short. Stop wasting time learning how to build a complex model (something that can be mastered in 6 months) and get busy getting connected.

Stay on Offense. There is no point in playing defense. Staying on offense is actually the number 1 rule to financial independence. If you follow our advice on becoming a millionaire in 10 years (*easily achievable for intelligent readers*) then you will realize this immediately. The path to becoming rich is paved in consistent *offense*. You’re busying working a career and at the same time busy building a sales business. As you continue working on both your career and business, time becomes a leverage point for you and you can delegate tasks at a rapid rate freeing you up to do anything you like.

In short. The best way to save money is to spend your free time making money. You won’t be able to spend and you’re increasing your income.

Fun for You Should be Boring to the Masses. Talk to a regular person (disgusting) and you will find that their lives are extremely boring. They will also believe that your life is extremely boring as well! While making money is just a game for you once you have enough to be financially independent, they will not understand why you want to grow your company/career/(insert anything else that is difficult). Why? They are more interested in watching other people live interesting lives.

The biggest joke is reality television where 20+ contestants compete for $1M while the host of the show makes $1M+ per season. If you want to go the fame route (not recommended), your goal is to become the creator of a show or host of the show. You do not want to be one of the contestants hoping to make less than the host… After embarrassing themselves on television for multiple weeks in a row.

Perception is Reality… For Most. After creating multiple products that do not sell well (you will quickly realize that what you want is unrelated to what the masses want) you’ll be forced to realize that perception and branding is just as important as the product itself. Laugh if you wish. But. Having a celebrity endorse your product will add more value than actually creating a product better than your competition.

The previous sentence is not a joke.

Once you realize perceived value is equal to real value… You’re going to immediately change your sales technique and your marketing technique. You will obtain superior traction from “quick fix” and “Celeb X recommends” than you will from creating a product that is 2x better than your peer group. As long as your product is roughly equivalent, spend your time selling the perception.

Pay for Help. Most people have huge egos when it comes to living life. No one is willing to ask for help and the difference between being arrogant and simply having an ego is this: realizing when help will accelerate the process. No one has time to be the #1 player in every single sport, the #1 banker, the #1 brand in clothing and the #1 doctor. It just isn’t possible.

Instead of wasting time choosing to become an expert in 10 topics, choose two or three and hire consultants for the other seven. The power of 1% is on your side.

Find the winner (top tier professional) in the seven topics (piano and tennis as examples) and simply take lessons. You’re going to learn more in 2 hours a week than you would through self learning anyway. Asking for help is perfectly fine. Pay the fee and save yourself the headache. Besides. The topics you focus on will generate a lot more cash flow than the hourly rate for an instructor.

Stop Working for People by Thirty. This is the hard cut off. By thirty you should not work *for* anyone. The emphasis on the word *for* cannot be strong enough. You may work “with” people. But. Under no circumstances will you be in a position where you’re taking orders all day. You are either contributing to a project (working with) or you are running by yourself. Notice… If you’re working with someone, you’re essentially working for yourself and throw your contribution into the pool at a stated deadline.

If someone does not know the difference between working “with” someone and working *for* someone, they should no longer read this blog.

They do not have any idea how revenue generating roles work. And. They have never generated a meaningful amount of money.

Ask Questions… When You Know the Answer. As many of you are aware, the typical person is an expert on everything. They know how to make money, get girls and lift more than professional body builders.

All jokes aside, you can use this to your advantage. When you are meeting new people you should ask them questions you already *know* the answer to. If for example, you are an expert in three topics and the new person claims to know one of them… Ask them 2-3 questions and use the following phrase:

“I don’t know anything about XYZ can you explain the basics?”

Jackpot. Instead of being forced to waste time (IE: seeing if they are full of it) they will now be forced to show their cards. Most people will ask them about topics they do not know. This doesn’t work. Why? You won’t know if the person is legitimate or not and you’ll be forced to back track and research the topic yourself to confirm the statements.

Focus on the Audience. People do not speak to each other equally. If you are speaking to a family member, friend of 10 years or a client… you will not use the same tone of voice, verbs or nouns. This is why you should never waste your time getting information from mainstream outlets. The targeted audience is too wide and the speaker is going to *change* the message to resonate with the people in front of him.

In addition, this works for advertising as well. Most people focus on if an ad would work on “them”. This doesn’t work! An ad working on you is irrelevant compared to an ad working on the masses.

Think differently and ask who is in the audience? Then find an advertisement that appears *repeatedly* for many days, weeks or months. The ad must be good because the space they are paying for is not cheap and if it is converting at a high rate… then you are certain it will be re-run until unprofitable. Take notes.

Let People Tell You How to Succeed! That’s right. We get a lot of questions on “how to make friends” and this section will solve every single one of your problems.

In short. People are insecure and have a superiority complex.

Knowing this as a fact, here are the two rules to making a new friend (note this works for casual acquaintances and is not to be confused with business). Rule #1: Ask for advice and let them tell you exactly what to do (remember they know everything). Rule #2: Regardless of what they say to do, report back and say it “absolutely worked and that you appreciate their time immensely!”.

Congratulations. This will work every single time as long as you avoid correcting them when they say something foolish in the future. Let someone believe they are better than you and you can bet everything you have that they will happily hang out and give you more of their advice.

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Straight to the point post. We are keeping our rule of not answering any more questions, but we encourage the smarter readers to provide other examples of “thinking differently” since no one gets ahead by following the crowd.

While we no longer answer questions on this blog we continue to receive this one over and over again. We’ll go ahead and answer the question and as always, no one will agree on the definition. But. Lets get started.

Definition: “A rich person is someone who does not have to work and will be happy for the rest of his life.”

The second part of the quote after the and is significantly harder to achieve than the first piece. We’ll start with the easiest part of becoming rich first… Money.

Part 1: Income Related Needs

A Million Isn’t Enough: For most people, this is the reality. While it appears to be a lot of  money for a college aged student, a million dollars doesn’t go anywhere if you were successful as an adolescent in the first place. Assuming you wanted to get the most out of your life, living on $40K a year in Flint, Michigan probably isn’t on the to do list. Ambitious people do not enjoy sitting on the beach every single day drinking Mai Thai’s… Watching their body degrade over time. This leads us to the second issue in answering the question… Your location will materially impact your financial needs for being “rich”.

Location or “Locations”: Before someone tries to reach the definition of rich (financially), the primary problem is finding a city or cities where you’ll be happy to live over the next 40+ years. The result of this problem is the need to travel to at least ~40 cities over the course of 10 years (hence no reason to buy a home in your 20s). Even with that backdrop, most find that they will prefer a dual city life living half the year in city 1 and the other half in city 2 (New York and Buenos Aires for example)

Lifestyle Expenses: This is where the math becomes extremely complicated. If you’re only able to cover food, shelter and your utilities, there is no way anyone outside of a Buddhist monk will be happy. With a list of several well off individuals, it seems the baseline is ~3x or more of monthly rent would cover lifestyle/entertainment expenses. Notably, we’re using the phrase rent to refer to the cost of living in a place you may own (IE: at least ~4K/month – multiply by 3x – for a 1 bedroom in soho, even if you own the property outright)

Healthcare/Disaster Recovery: The last real item on the list is a *growing* Healthcare & Disaster Recovery fund that remains untouched. This will make it next to impossible for you to eat into principal (let’s draw the line at ~$500/month minimum or $6K per year per person).

Summary Examples:

Bachelor: Very likely to describe the vast majority of our readers at this point. We aggressively spam comments and keep the haters off of here so it generally results in a readership similar to the one we’ve tailored to.

The Stats: Low 7 figure net worth. Lets assume $2M (minimum). At 5% returns this is about $100K per year. We’ll assume a 20% tax rate getting us to $80K per year. At this level you can live a great life in 99% of cities in the world (let’s cross off the top 10 or so from an expense perspective) and it would look something like this:

A single guy in Austin, Texas: $6,666 a month income – $1,500 “rent cost” – 3x ($1,500) – $500 healthcare = $166 remaining for wiggle room.

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Successful Business: For one reason or another, it seems that most individuals who successfully sell or create a small to medium sized business (SMB) tend to have a family or a spouse. This post is not going to bother giving an answer as to why or if it is a good idea (since there are always exceptions). Instead we’ll just crunch the numbers.

The Stats: A successful business that has been sold should generate a net cash *event* of ~$5M. This brings in $250K in cash flow or $200K in after tax money if we continue with the rough 20% tax rate.

Family in Los Angeles: $16,666 per month – $3,000 rent cost – 3x ($3,000) – $1,500 healthcare. This leaves about $3,100 a month for raising a young boy/girl in a top tier public school (or home schooling).

Summary: In short, the bare-bones minimum to start on the definition of being rich *financially* is around $2M in cash/liquid assets within a 2-4 day settling period.  Importantly, as mentioned at the beginning of this post, getting the money is the easiest part of becoming rich. We stated above that being “happy” is the part that most will struggle with. There are many financially well off individuals with nagging wives (looking at you *many* lawyers and bankers) and there are many rich engineers with negative social skills (just to go to a tech city). All of this aside, the second hardest item to obtain is a healthy mind and body which is part two of becoming “rich”.

Part 2: Physical Health Related Needs

Retraining Your Tastes: Unless you were born into a wealthy family (good for you!) chances are your body is used to consuming garbage to put it bluntly. Fast food, boxed microwaveable meals, canned goods, pastas and so on. Many people in the United States (roughly half) are overweight and continue to shorten their lives by consuming garbage on a daily basis. Slowly killing their bodies.

The gut is the second brain because it tells your body if you’re moving in the right direction. In fact, if you’re not well off financially as of today (which is fine) we would suggest *starting with fixing your diet*. You’ll gain more energy and focus than you can possibly imagine by simply fixing what you consume.

Daily Exercise: There should be *no thinking* involved when it comes to walking to the gym. Similar to brushing your teeth you should be doing something physical every single day (more likely some form of exercise twice a day! Yoga and lifting for example). Building your body is literally no different from building a Company. If you put in the work every single day when you are older you will continue to reap the benefits even as your body slows down. Muscle memory is absolutely real.

You do not need to be 5% body fat and lifting a new personal record every month. However. You need to feel energetic. You should be bouncing off of walls relative to your age suggesting health and vitality.

Recovery: This section is *not* for people under the age of 25. If you are under 25 your body can take an immense amount of punishment. Those that are under 25 should continue to push as hard as they possibly can because the tank refills so quickly there is practically no such thing as “over training” or “over working”.

Once you surpass the age of 25 you should *know* your limits. If you don’t know what your limits are at this point then you did not bother working hard when you were under 25. This is “mean”. This is also true. Eventually you find your breaking point on when it is 1) time to step away from the computer, 2) time to avoid that extra rep and 3) time to stop chasing that sales lead. This is simply called experience.

We don’t know what the breaking point is for you. It is probably much later than ours to be honest, which gives you a competitive advantage. But. Some breaking point signs include: 1) Discombobulation: Where you are suddenly leaving items in the wrong places and using things incorrectly. A great example is putting items in the freezer instead of the refrigerator because your head is not in the right place. Another basic example is placing your keys into an obscure drawer or thrown on a piece of furniture instead of your usual designated area. 2) Pinches or Buckling: if you are exercising hard and feel a “pinch” or you sporadically buckle… You are done. There is no reason to push past a pinch or buckling as a tear or strain will set you back several weeks or months. Stop. Move slowly. Relax. Ice and… Go Home.

Summary Examples:

Male in His Mid-Twenties: This is a great spot, an inflection point for most. If you’re more of an Ectomorph it means your primary activity is eating a bit more and making sure you fill out your frame. Your goal is to find your physical breaking point and where your body simply feels “too heavy” since the primary goal is putting on muscle mass. Opposite of this would be an Endomorph, where you’re constantly trying to cut body fat down with intermittent fasting, more high intensity training etc.

Simply put a person in his mid-twenties has plenty of time to constantly exercise (5-7 days a week) and find his ideal weight to wake up invigorated every single day.

Male in His Thirties: Here you’ve moved on. You already know where your body feels best and it is usually a tad lighter than you were in your early twenties (notice professional athletes tend to lean out a tad as they reach 30) to prevent your heart from over working. That said you have a few set routines and know your body extremely well. You can prioritize rest and recovery a bit more since your work outs are extremely focused (4-6 days a week) and the diet piece is on track.

On a side note, you’re stretching, foam rolling and loosening up your body consistently. Something you didn’t worry about a decade ago.

Summary: Staying healthy is significantly harder than obtaining money. There is no comparison. Generally, the individuals who are healthy but not wealthy are unable to condense their exercise efficiently. Spending 3 hours in a gym per day (unless a college or professional athlete) is an utter waste of time. The real trick is being *consistent*. If you are able to remain in near tip-top shape with 5-6 hours dedicated to your health per week, you will have enough energy to push aggressively towards your financial goals.

Finally, we’re moving onto the most complicated piece of being happy which is your relationships and view of your own life. We don’t know if there ever will be an answer but we’ll attempt to make the grey area of life make sense.

Part 3: Personal Relationships

A person is rich ($2M+ minimum). A person is healthy (extremely energetic). A person is not happy.

This person still fails our definition of being “rich”. Being financially well off and with all of the energy in the world is simply not enough if they are unhappy. A cheesy line is “you’re not rich if you have no one to share your life with”. That is a bit far fetched as many people may prefer being alone (they would be happy) but the point shines through. A person with money, 9% body fat and depression is not a rich man.

Friends: We have a few posts scattered on here regarding this topic and instead this will be a condensed version. If we had to summarize it in a sentence it would be this: “most people are not worth your time”. Hopefully, that caught some attention given the more soft spoken paragraph above. Most people will be perfectly fine earning a middling wage of $100K a year and giving life advice based on their non-success. Most people will not understand why you become irate when a person who makes a fraction of what you make gives you advice. A homeless man giving advice to person who makes $100K a year is *exactly the same* as a unhappy man who makes $100K a year giving advice to a happy go lucky multi-millionaire. We repeat. There is no difference!

If you wish to obtain friends you really need to find three things and three things only: 1) soft touch relationships, 2) no overlap in business or finances – no need for each other and 3) similar view of the world around you.

Those three items are incredibly difficult to find in any single person. We recommend searching far and wide from the gym you attend to internet bloggers you enjoy reading. There is no way you will find 5-10 people who fit the above three items in your day to day life. It just won’t happen.

We do not have a formula for finding them. Again. We do not have a formula for finding them. If you’re lucky enough to find five you will be one of the happiest people in your city. Just remember. If you break one of the three items, you’re putting the friendship in jeopardy. A good friend is always busy doing something but has time to visit when you’re around sporadically. He does not need you for money and you don’t argue about useless topics such as politics.

Dating: This is much of the same. We really do not care if you want to get married we simply believe it is not an intelligent move financially. Just give her the ring (a nice one if you like) give her the wedding, but do *not* sign a contract giving the government control over your life.

The saddest people we know treat dating like a sport. They expect their partner (girl) to actually live up to their own standards! We’ll break the bad news now and tell you that if you are a multi-millionaire, physically in shape and have a load of real friends… No one is going to match you eye for an eye.

You absolutely *must* have high standards. But. Your personal standards will never actually be met.

Why? Women always date up.

If she didn’t look up to you in the first place (IE: think you’re one of the best catches of her life) then there is no way she would have gone on a date in the first place. Instead of expecting an equal partner, you should find out exactly what matters to you the most and look for those 3-5 qualities instead of a laundry list of items that simply won’t be found. Reiteration. Your equal will have no interest in dating you. This goes for all of the authors here as well. Reality.

Mental Up Keep: The final item on the list will come as a shock to regular people (we think we’ve finally banned them all!). Even if you have everything above from money to health to friends to a great dating life… You’re still not going to be happy. You will need to find something to build, grow and improve upon. For us this is simply business and finance. For others it may be art and a family. Who knows.

What we do know though, is that if you meet all of the criteria laid out above, you will *not do anything you do not want to do*. People will not understand your decisions because you are living a much more fulfilling life. Maybe you take the first contract that pays less than the second contract option. Why? Easy you didn’t want to do the other task and didn’t think it would be fun!

In short, once you’re happy and your decisions no longer make “rational sense” to the common man (IE: lazy slob) you’re no longer touchable.

Summary of the Post:

• From a pure financial perspective the bare minimum to be considered rich in the United States as of 2015 is about $2M for a single person and about $4M for a person considering having a family
• Finding a city where you hope to spend the majority of your life is incredibly difficult. There are literally thousands of options and you must find a few that fit your needs
• Financially savvy individuals never touch their principal and always have a slush fund that is increasing to prevent disasters from eating into the pyramid they have built
• Before bothering with money, health is *always* more important than wealth. We realize how funny that looks given the name of this blog but we’ve said it many many times before. Health >wealth. You only have one body and one mind. Find your breaking points before it actually breaks on you
• If you have five friends that meet our criteria: 1) constantly busy, soft touch relationship, 2) does not need you financially and 3) sees the world in a *similar* manner as you… You’re an extremely rich man from a friendship perspective. Look far and wide for these individuals, there are no tricks as less than 5% of the human population will meet this criteria
• Women date up. This is not a politically correct comment but it is true. Find what you want in a female and do not expect to meet your equal because your equal is always looking for a different man to look up to. Reality check.
• If you are rich, healthy, have friends (or a family)… You’re still going to build something or perhaps work for money. Your life will not make sense to normal people and your decisions will be made to maximize general happiness. However. If you’re working because you *have to* then your incentives cannot possibly be in the correct place.

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2015 has been an interesting year, we took on a few major projects this year which impacted the number of posts earlier in the year versus the end of the year. Positively, we’ll see how 2016 shakes out given 2015 was the best year in the history of mankind to both be alive and build a company or career. We will not answer questions on the blog and will only respond to well thought out or interesting comments per usual. However…

We will hold a Twitter Q&A next week and will send an email announcing such shortly.

Take care.

Everyone is trying to show the good side of their life. On Instagram people will take hundreds of photos in the exact same location and place the one out of 700 that match their “perfect life image”. It is a joke.

The truth about friends is really simple. If you have more than 5 tier one friends you are a very rich man/woman and should go to sleep with a smile on your face every single day. We repeat. Every single day. Why? A “real” friend is someone you have known for at least 5-10 years, does not waste your time and consistently looks to improve himself (also a millionaire or better). Good luck!

With the harsh backdrop out of the way here is how we look at friendships. Feel free to disagree.

Tier 1 – A “Real Friend”

No different than a ranking system in a Company, your friends should also have tiers. This is not sunshine and rainbows. It is called having high standards. If someone can be your “bestie” in less than 9 months we all know you’ve burned hundreds of bridges in the past. A smart person will take mental note and realize that you may not be the best person to spend time with.

1) A Tier 1 Friend is Busy: Anyone worth knowing is not going to spend every single weekend hanging out with the same person. In fact, a tier one friend will unlikely talk to you every single day and once a week is more than enough. We are being extremely loose with this definition and would say once every two weeks is probably more than enough as well.

Why? Simple. Anyone who is dedicated to being the best person they can be is not going to spend his time drinking with you at Starbucks everyday debating the meaning of “life”. This is what hippies do and if you’ve seen a hippie you sure as hell do not want to end up like them.

In Short: A real friend does not have time to console you every single day and is too busy to ever do such a thing. This is a positive. If you’re interested in becoming “the best you” (cliche we know) then you’re not going to have time for this either. Both of you are on the same page and realize “when we all die we get to meet the best person we could have become.” Most will be severely disappointed.

2) Doesn’t Force You to Bend Your Credibility: A smart person knows his words should have weight. This does not mean your message should be “perfect”. We live in a world where nit-pickers will be looking for you to “slip” on 140 character tweets (no joke people do this!). However. A good friend is more than happy to have your back (you will have his as well) in any battle of *reputation*.

A great example is when someone challenges your friend’s knowledge base. We’ve laughed extremely hard when we see people arguing over fitness and we are 100% certain that one of them is a top 5% athlete in the United States. It is a joke!

This is extremely similar to running a business. Your Company is your reputation. As they say you can replace the CEO with a man who has a stellar reputation and suddenly the Company’s image will change.

In Short: A tier one friend has enough personal information about you to have your back. In addition, you will *never* put *their* reputation at risk. The best way to do this is to prove your credentials to them through multiple sources before making claims. As they say “If you’re good at something, others will say it for you”.

3) Must Be Financially Successful: In order to be a tier one friend, they must be a millionaire. No exceptions. Elitist? Yes. Reality? Yep. Pretty simple reason as well. If you are rich and your friend is rich… You don’t need each other. 

If a person is 1) financially independent, 2) does not work in the same industry as you and 3) consistently tries to improve his/her life… You’ve met a 0.5%er. You have read that correctly. Not 1% but less than one half of one percent or ~1.5 million out of the ~300M people in the United States [Yes we know the population is now about 330M you nit-pickers! We know you’re reading!]

In Short: It is extremely difficult for someone to break into the tier one friend arena. It should be. If you are financially well off, physically in great shape and consistently improve your own life… You’re well into the 0.5%.

Why is the filter so harsh on finances? Simple, if you’re rich … You will not know if people are interested in you or if they are parasites.

That is the real reason why it is “lonely at the top”. Fortunately, it is better to have a handful of friends and be at the top, than be at the bottom.

4) Will Shut You Down (Keeping You Honest):

Second chances are for people who have no options. If your girlfriend/boyfriend cheats on you and you do not leave immediately you’re an idiot and have low self esteem. A loser.

A friend is no different. If they make off color remarks and people are too brain-dead to see the point of the remarks, you step in and explain it. However. If your friend ever backstabs you or forces you to lie… You leave forever. It goes both ways. A real friend is not going to have your back when you are dead wrong. Differing opinions and deceit are certainly not the same and a bright person will know the difference.

As a friend of ours says, we will butcher the quote, “You can look past a mistake, you can’t look past a character flaw” – Mike Cernovich. See there’s an example of a mistake (joke).

In Short: A friend is not willing to lie for you when you’ve shown material character flaws and second chances are for people who have no options. You should be rewarded for *not needing* a second chance in the first place. Don’t surround yourself with “yes men” because they will be the first to ditch you when your company has a bad quarter.

5) No Complaining: You can be a narcissist (we are admittedly narcissists!) and you can be a prima-donna but you absolutely cannot ask for other people to solve your problems. If that sentence appears to be contradictory the distinction is subtle. You can make noise, be boisterous, be aggressive but you cannot *ask for other people to solve your problems*. Some people are extremely extroverted at all times but the one thing they do? They solve their own problems.

If you want to to live life that fast lane life to the top… You better be prepared to change *a lot* of tires.

Notice. This is exactly why a good friend will *not* work in the same business line as you. If you end up competing with one another or being forced to work together the tension will rise since both of you are incredibly aggressive individuals.

In Short: The difference between a complaint and a hilarious loudmouth is simple. Follow their actions. If they talk on the phone all day about their frustrations and do nothing about it… Throw the phone number into the garbage. If the person goes off once and a while about the problems he’s solving and tells you *how he solved it* about three months later… Save the number carefully into your rolodex.

Summary of Tier 1:

Exhausted yet? This is the baseline for having a friend be anywhere near the tier one category. It is up to everyone reading this post to decide where their standards are but these are ours. We do not trust individuals who are not millionaires. We do not lie for our friends (vice versa). We do not talk to our close friends daily. We do not enlist “yes men”. Finally, we do not have tolerance for complaints while we are more than happy to enlist prima-donnas.

Pro-Tip: You will find that average people will call extremely successful people “cocky or arrogant”. This is because they have no idea what it takes to win and they go into battles thinking they are going to lose (loser belief system). As long as other successful people view you as extremely competitive (not arrogant) you have balanced the see-saw appropriately.

Tier 2 Friends

Many many people will end up living in this area for long periods of time. The real hurdles to overcome are 1) finances, 2) watching the ups and downs and 3) time. From a historical stand point, over the course of 10 years you will watch a Tier 2 friend go through both a terrible failure and an amazing success. If he/she is running on all cylinders for 10+ years straight he’s going to both crash and burn and win one of those races no doubt. You’ll see their responses and get ready for the fireworks!

1) The Financial Makings of a Winner: A positive mindset is not going to make you rich. Sorry. If you think happy go lucky thoughts all of the time no one is going to pay you a dime.

A future financial winner is going to do two things: 1) Solve problems aggressively and 2) learn to sell.

If you can solve problems and sell there is practically no way you will be broke for a decade. The problem? You will be extremely *inefficient*! (our favorite topic by FAR is efficiency).

If you or someone you know appears to have the makings of a winner then your only goal is to help improve their efficiency with your knowledge! After providing basic advice their skill-set should soar and they will clear the financial hurdle in a hurry. Oh. By the way? They will go through a binge drinking/drug/partying spout just like you did when you made your first million dollars. You did it as well so don’t be a hater!

In Short: From a financial perspective, if a person is smart and knows how to sell and solve problems… he will eventually succeed. You can bet on it. The main difference is the person will lack efficiency wasting hundreds of hours of time. This is exactly why older men and women tend to work less but their time spent is extremely efficient.

2) Watching the Volatility: You will learn a lot. Both the good and bad about someone as they go through a full up cycle and a full down cycle. You will not know what type of person they are until you see a full cycle. Some individuals go completely silent in a down cycle and ignore the rest of their life until the problem is solved (business issue, career issue or an other personal issue). Others will start networking… So on and so forth.

The real key in watching a volatile “full cycle” is simple… Do they reveal any materially negative character flaws? If the answer is no then you’ve met a 0.5%er. We all have negative personality traits, but a character flaw is not fixable. Never has been and never will be.

In Short: A full cycle, something that feels like rock bottom and something that feels like being “king of the world” will give you a full glimpse of their personality. From bottom to top you’ll find many good and bad personality traits but if there are no material walk-away character flaws… You’re good to go.

3) Time: We strongly suggest you look for a handful of friends when you’re young and in your 20s. Why? You’ve given yourself enough time to build a meaningful friendship. *And*. You will both be extremely busy since you’ve just graduated College.

In Short: Time is an important aspect of life. You don’t get it back. Similar to health you cannot buy health and you cannot buy time. Yes you can buy the best *healthcare* but you cannot buy the time wasted getting said healthcare due to bad health! Health and Time always defeat money which is why 10 years is an enormous amount of time spent with a single person (albeit sporadic).

Summary of Tier 2

There is not much of a difference between Tier 1 and Tier 2 to be honest. Finding people who can be added to tier two is really the most difficult part of the process. Notably, the people in tier 2 certainly do not need to be the same age as you. It is almost easier to find a younger person who has similar qualities as you, help them with their inefficiencies in navigating life and create a friend that way. Hence the whole reason to give back (to future successful people only of course).

Tier 3 – Search Process

Finding a good friend is about as likely as finding a good spouse. Now that you’re done laughing you’ll realize the dire odds of finding people who fit the bill.

We don’t even have a solution here to be perfectly honest and if someone has a good way to filter we’re all ears. Here’s a high level suggestion (a terrible one at best)

– Hang out in the expensive part of town. While many people are certainly there to be *seen* you’ll eventually learn how to spot people who live in the area and distinguish them from visitors

– Assume success for the first thirty minutes. Many successful people are not great with first impressions if they’ve had a long day running a company or selling xyz all day long. Once you’ve gotten a feel for their knowledge base hit them with the tried and true “Hey i know nothing about this can you tell me about it”. Make sure you are a top 5% expert on the topic and you’ll see if he’s a liar. (typical hedge fund move we know!).

– Ignore emotions and word choice. Easier said than done. You’re much better off looking at the *actions* of the person than anything that is said. Why? Most people who stab you in the back will happily tell you to your face “This is why we get along so well! (smile)”. Typically they are about to throw you under the bus. Hard.

– Act 5-10% dumber than the people that are around you. Acting dumb to get ahead is real.

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There you have it. If you get to five friends you will always be rich. It is only lonely at the top if you are not smart enough to realize each friend of yours is worth 200+ regular people (Literally!). It’s worth it!

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As usual no questions allowed. They will be deleted.

We are updating compensation numbers for 2015. Excluded from this overview is investment banking analysts as the variability has decreased. Simply put an investment banking analyst should make $150, $175K, and $200K in years one, two and three. The reason we have excluded the exact break out of base and bonus is two-fold: 1) analyst base salaries are a bit less standardized now with some as low as 70K and the new norm for top tier banks being $85K, 2) the bonus is being adjusted to match the all in compensation numbers of ~$150, ~$175, ~$200K. This means the *mix* of income for analysts has changed but the *total* number is roughly the same. So we’re not going to squabble in comments over which bank is at $85/$65 versus $75/$75 for example. If you work in the industry you already know which banks pay what salaries… so lets move on.

Budget Setting: If you’re in a revenue generating role, you know that the budgets for the year are set roughly one month before the year ends (IE: late November early December). So even though numbers are not announced those in the “know” are already aware of where the “pool” is. We’ll cut to the chase:

“Bonuses will be down ~5-10% and your total compensation will be roughly flat”

Finally, before we delve into the data remember we are talking about two things: 1) investment banking division at an investment bank (not hedge funds, not sales and trading etc.), 2) we are including middle market to elite boutique banks, IE: everything from Baird to Lazard.

Changes in 2014: Last year most banks changed their base salaries, increasing them across the board. This is why you’re seeing more discrepancy with some banks paying senior associates $160K base salaries versus $175K versus $150K for example. The numbers are simply moving around a bit depending on which bank you work for. Again… however… total numbers are roughly comparable so we are taking the *median* across all banks. This is probably the best way to gauge numbers across the street as the outliers (an associate being promoted to VP) will drag the comp pool up, while the underperformers who get a “F*** you bonus” of $20K will drag the pool down.

Below is the Data:

The Numbers

Associate 0 (stub bonus for MBAs): Your base out of MBA is probably in the $125K range today and you should get a $30-45K bonus, however, $35K is roughly standard.

Associate 1: First full year, the base salary is around $125-130K and you’re looking at making roughly $240K all-in at the *median*. We are going to emphasize certain points as a top tier banking employee will generally get 100% base as bonus for their first year. But. Again. We are talking about the median employee.

Associate 2: You’re making about $140-150K base and your all-in will be knocking on $300K total. We’re guessing it’s closer to $275K as many people under-perform and are kicked out of the bank. Therefore the skew is actually up as the money is shifted over to the people they like so we’re at $290K.

Associate 3: You’re performing well and you’re likely at least being considered for a VP promotion. You didn’t get fired and you never saw the writing on the wall to leave (IE: a terrible bonus). $160K and just over $300K all-in is about right for the median employee. ~$310K.

Associate 4: You either made it or you didn’t. You did extremely well and already made VP last year or you made it this year and you’re looking at $160-175K base and *more importantly* you’re total pay is about $400K. Once you make the jump you should be knocking on $400K.

Vice President: We’re lumping all years into one in this case because it is easier. If you’re sourcing deals and brought in some money for the firm you’re going to blow these numbers away. One thing we do know is that your base salary is likely $200K. This is industry standard at this point and you can anticipate a bonus of about $225-250K or $425-450K in total. More importantly… you eat what you kill going forward. If you can bring in money, then forget about the range above and you’re going to be promoted very quickly to director where…

Director: At this level your base is $250-275K. Since we’re including mid-tier banks we played it safe and said $250K. Your goal is to essentially generate 1.5x your base salary as a bonus bringing total pay into the $550-650K. Again… If you’re bringing in money none of these ranges matter at all.

Managing Director: Base salaries are generally $350K. Your typical number is about 2x base salary so just over $1M in total pay. To emphasize that this is bank by bank specific, a bulge bracket bank recently *reduced* its base salaries paid to Managing Directors (this was a 2015 phenomenon), anyone in the industry knows which bank this is.

A Couple of Admissions

We’re going to let you guys in on a couple secrets. This is probably obvious to our long-term readers but here it goes.

First: We won’t bother listening to nit-pickers on where the numbers are because we already received the data and sent it to two people: Mike and Sam (previous GS employee) who can both confirm the data is legitimate. Not going to waste our time.

Second: We actually strongly dislike Wall Street employees. This is not a contradiction. Most Wall Street employees will do whatever it takes to stab you in the back and screw you for a few thousand dollars. They will even do it for $10-20K (no joke). Your co-workers are *NOT* your friends.

The reason it is not a contradiction? Quite simple. We are smart enough to realize that it’s one of the best ways in the world to get rich. How many people make $300K at the age of 26? Not many.

In addition… how many people are able to play the game correctly and realize you make more in one year as a VP than two years as an associate? Again.. Not many.

If you can sell a Company, you’re going to be able to sell anything. No doubt about it.

Summary Points

– Not much changed year over year, while bonuses may be down about 10% the base salaries were raised so you’re really flattish

– Similarly, the rough way to think about each tier is a doubling of income. $150K as an analyst, goes to $300K as an Associate, which goes to $600K for a good VP which then scales to $1M+

– We stick with investment banking as the proxy for Wall Street compensation because it is the easiest to access (if you work in the industry) and it is pretty standardized across the Street

– We are not going to spend a lot of time on the buyside as we’ve already explained how volatile it is, ~$250K as an entry level hedge fund associate makes sense. But. After this… You could receive a $0 bonus or a 4-10x bonus depending on if you’re an associate, analyst or portfolio manager

…. Oh… by the way…. We hope you don’t work at Deutsche Bank

***

As usual, we won’t be answering questions. But. We *will* respond to interesting/valuable comments.

At least everyone knows why we don’t talk much about Wall Street numbers anymore, simplistically because it does not matter much. Get to a revenue generation role and keep your foot on the gas.

2015 is coming to an end. It has been the best year in history to make money. The best year in history to be single. And. The best year in history to start another company. 2016 is looking better than ever but instead of putting the cart in front of the horse we’ll review the year (both positives and negatives) and move onto 2016 expectations.

2015 Positives

Writing Style Established: We’ve finally established a consistent *writing style* although we continue to mix up the format. Overall, happy with the progress here as the blog was abysmal back three years ago with chaotic content that could have been summarized in a solid tweet. Importantly, with the new and established writing style all of the terrible posts have been turned into solid tweets causing our twitter account to grow.

Twitter Use Solidified: We’ve also established the point of the blog and the point of the twitter account in 2015. It will continue to be a micro blog about topical items and will *not* be used as a “connect” feature unless we get bored. Running a micro-blog is more helpful and we won’t waste our time dealing with trolls. We’ll continue to build our own audience separate from any sort of “movement”.

User Base is Up: We’re on the line here with creating our first product. Yes it will likely be an information based product but we’re not going to sell anything until our metrics are hit. Will it make us a lot of money? No. The blog continues to grow and we make a lot more money elsewhere (Wall Street is not our primary source of income). In short, user base continues to grow at a nice clip despite materially lower post count.

2015 Negatives

Decline in Posting Rate: To no surprise to our readers, an actual company (or companies in this case) and a career is significantly more important than a hobby blog. This blog took a massive hit in posting rate and we’ve tried to ramp it up now that things have cooled off. Disappointing.

Still Arguing With Failures and Losers: We wasted time arguing with people on the internet and even more-so in real-life. While the rate was down a solid 50% we’re going to try and decrease this again by another 50%. If a person is too slow to figure out what is legitimate and what is not, we’re simply going to click ignore and move on (we’ve already met multiple people in real life including some of our excellent commenters!). Mediocre people *practically* never turn it around. It is much more efficient to find someone who is above average but younger… than find a fool in his early 40s and $200K to his name… Sad and pathetic.

They had 40 years to figure it out, while there is still a “chance”, the probability is so low it is not worth your time. Hat-tip to Felix Dennis for that one.

User Base Not High Enough: While we’ve mentioned this as a positive, it didn’t actually hit our metrics. Both a success and a failure. If we were able to keep the posting cadence up we would have been ready for a product launch already! However. The user base increased more than expected given that were only posting 1x per month! In short this was both a win and a loss for 2015.

2015 Articles We Didn’t Write

Since we failed to post as many times as we wanted we’re going to highlight interesting articles from 2015 that we didn’t write! Here are some interesting posts we read while in transit.

The Paradox of Rest – Mikael Syding: “If you want something done, give the task to a busy man. Ask somebody with all the time in the world, and it will take exactly that long”. This is probably one of the best quotes we’ve read and it is entirely true. Resting is not limited to sitting in front of a TV screen or taking cat naps. Resting is really a form of changing tasks in your brain. Using this blog is a great example, it’s fun, we don’t take it seriously and it activates the creative part of our brains.

How Much Do Independent Authors Make? – Mike Cernovich: “Every author keeps their sales data secret because of an “embarrassing” reason.” In short, Mike outlines the e-book industry and gives you an idea for how much money you’ll make by being an author. It isn’t great. People write to us asking if we’re “hating” on the sales and the answer is always no. We actually *agree* that writing online is definitely not the best way to make a living if you want to make money and get rich. In fact, his sales numbers are incredibly impressive. Generating $100K as a one man shop selling e-books to a market for *men* is no joke. We wouldn’t even sell a fraction of that based on his data! Read the article before you believe you’ll get rich selling books and stop complaining that he has monetized 10+ years of effort.

5-MeO-DMT, The Spirit Molecule, Pineal Gland, Consciousness, and Atheism – Mike Cernovich: We actually feel uncomfortable posting that link here, which is exactly why it belongs here. There is no reason to add an explanation, when you read or listen to the post you will believe what you believe and we will all move on. Yes we realize it was written in 2014 but we found it this year.

How To Write A Sales Letter For Your Blog – Robert (30 days to x): “It will take you between three to five years before you figure out how to actually make any money. Most niche sites will cap out around $15,000 a year. If a website is earning more than $30,000 per year it’s almost always operating off of paid traffic. The owner is buying advertising space somewhere. Sites that get organic traffic and less than 10,000 visitors a day aren’t going to earn a more than a $10,000 to $20,000 per year.” Simply well said and true. This is why we aggressively hammer the point down of needing *paid advertising* to make money.

Machiavellian Maxims – Illimitable Men “When people don’t like you, their questions are attacks. Sometimes these attacks are disguised as concerns, other times they are blatant. Whenever you’re asked a question, judge the legitimacy of the question. Insincere questions must be met with insincere answers, if any answer at all.” This post is almost a darker refresher of the book 48 laws of power. We usually do not like list posts but this is a solid summary of the dark side of human nature. We found this blog this month and will check it sporadically.

2016 Expectations

No Q&As for the Masses: We made this change in 2015 (for comments) and it was probably one of the best decisions we have ever made. Going forward we will only provide Q&A’s to **email subscribers** and they will be held on Twitter on a Monthly/Quarterly basis depending on schedule. We are shutting down the free-for-all Q&A’s on Twitter as too many of the questions are terrible so we never respond. Importantly, for every single subscriber you will have significantly less people to compete against.

– Facebook will be the first place to receive post updates

– Twitter will be a micro blog and also provide post updates

– Subscribers will receive access to Q&A’s and we will respond with @ instead of .@ to minimize interactions with regular people

Continued Page Growth: We have three triggers in place before we start a product to sell. Page views, users and email subscribers. If the three triggers are hit we’ll get started. Until then we’ll keep steady with the stream of information/content.

Three Action Steps for New Years

In our opinion there are only two things to do. First do not waste your New Year’s going out to party, do the opposite and you’ll succeed. Stay in.

Second, if your questions are personal finance related we strongly recommend signing up for Personal Capital as we are unwilling to do personal finance consulting (would be a time for money exchange)

Third, we continue to get questions about doing an Internet Marketing post. No chance. We make more money online than we do on Wall Street (all writers in revenue generating roles) so there is no way we are ever going to give that information out. People on the internet copy and steal things that generate $20K a year so there is a better chance of us blowing our brains out. Positively. Here is a book that every single person must read if they want to learn how to sell online: Ca$hvertising. It is basic but gets you started.

Final Comments

On a personal note, reading took an enormous hit this year so we were unable to 1) read as many books as we wanted and 2) were unable to read as many blog posts as we wanted as well. With that said we’re happy to hear about interesting posts/books that people found in 2015.

***No Questions Allowed They Will Be Deleted***

Most people are amped up heading into the New Year. If you’ve been running full speed ahead all year, you likely had 2-4 days (even a week!) to recover from the effort you put into the year. Instead of doing what the masses do, expending excess energy on “partying” you should spend your time coming up with a game plan for 2016. On a serious note, mentally, we’re already in 2016.

The books are closed on the year so here is what we would recommend.

1) No Goals.  Goals are not useful. They cause emotional highs and lows that make it much more difficult to take advantage of the enormous *momentum* you have built within that aspect of your life. Lets say your goal is to make $200K next year, and you hit that “goal” by September… Do you simply quit? Do you have an emotional high followed by a let down of “what’s next”? This is not healthy.

Instead you want to get “better” in every important aspect of your life: Health, relationships, finance and anything else that is important to *You*.

If you’re interested in having an emotional up and down roller coaster, just go and waste your money at a motivational seminar where everyone gets hyped up about all the “crazy cool stuff” they are going to accomplish. Come to think of it, the count down on New Years Eve is tantamount to an emotional peak and valley!

2) Review 2015 Expectations: We do this every year. If you write in a journal you will have clear remarks every single month on how your progress shaped up.  In our case, it was extremely *non-linear* (real improvement is always non-linear). We saw a boring first three months, a massive event in month four followed by a chaotic next five months followed by an abrupt easing and settling at a higher level than 5 months prior.

In stock terms it was flat for 3 months a gap up and away followed by a flattish tape.

Here is how your 2015 wrap up should look.

Step 1: Review the items you wanted to improve upon. If you did not make *any* progress on all of them you can safely say it was a failed year. We doubt anyone like that reads this blog, but if so, that’s definitely the queue to exit. You should rank each item you wanted to improve upon with a 1-5 ranking system (five being the best) and see how you did.

Step 2: Why was the progress better or worse than you expected? Write out the real reasons, both the good and the bad to keep yourself accountable. What did you actually do, what actually happened and why did it work or not work.

Step 3: Write down what you learned from the ones that did not go well. If you want to win, you’re going to lose a lot. Remind yourself that you didn’t really lose by trying, you just found one way that *doesn’t work* and will find a new way that *does*.

Step 4: Do an expense and income recap. A full year view. You’ve already reviewed your entire year, now it is time to tie up loose ends by looking at the entire financial performance since you have numbers to back up the data. We recommend using Personal Capital for this. Once you know where all of your money was spent you can make a few thematic changes to reduce costs and increase revenue. This does not mean you become a frugal person. You simply want to know where you’re money is going and see if you can make basic changes to save time, save money and more importantly *free you up to make more money*.

3) Listed Action Steps for 2016: Now that we’ve broken down the goal myth, that’s in the gutter, lets move onto the “getting better” section. In order to get better you need to have specific things you are going to *do*. It is not intelligent to simply say “I will have X”.

We don’t sell dreams over here.

How are you going to obtain X? Lets brainstorm some ideas:

Financial: You are selling your fitness product in Canada and it is doing extremely well. An easy similar demographic is the USA… Well then step one for the new year is to expand your marketing into the USA. You don’t know how much revenue you will bring in but it *should* increase. Then you have step two of targeting a new demographic, say people in ages of 18-25 when you primarily focused on people in their thirties. So on and so forth. Come up with five steps.

Health: Some of you guys are already in great shape, even then there is room to improve. The biggest room in the world is always the room for improvement. If you’re already where you want to be weight wise and diet wise… Then you may need to improve your efficiency. How many hours did you spend working out last year? Can you condense the hours and minutes but see a 0% drop off in your actual looks and performance? Try it. If you can do that, then you should choose a new segment to improve upon. Such as flexibility, endurance and exercises performed perfectly (to keep your brain engaged). Come up with three.

Relationships: “I want more friends” is not a good idea. Similarly I want more “business contacts” is not a good idea. How are you going to meet the people you want in your life? Are they going to be in the same places you frequented in 2015? Is there a specific *person* you should target? Once you answer these questions you will have three more steps.

This should take a decent amount of time. And. By the time you are done you will have a blueprint for success in 2016.

4) Sample Template: It may be useful for an example so here is one of ours.

Financial: 1) Expand market outside of domestic sales (currently almost all revenue is domestic) by targeting country Z in January; 2) Target clients named X, Y and Z (calendar invite to call them on phone) on specific dates, 3) Sell new product XYZ to new demographic and turn a profit or break even, launch date in March, 4) stop spending time selling to xyz demographic who do not convert after X months (learned this the hard way in 2015), 5) launch product on blog if X users and X email subscribers are met – December 2016 at best.

Health: 1) enroll in a yoga class beginning April 2016 given product launch will be the priority, also book three active release therapy sessions for the month, 2) purchase five different skin care products (already researched) and see the impact over two months each, 3) no longer eat lunch at desk, vitamin D deficiency is a real issue and common especially if you work on Wall Street, will leave email tasks for lunch held outside.

Relationship: 1) find one more person to help, currently stand at three people per author while adding a fourth limit to 4 hours of total time spent per week 2) fly to country X in July to personally meet a new contact for projects in the future, 3) slight *increase* in nightlife activities as too much time was spent staring at a computer screen in 2015 (probably won’t happen!), 4) we have a basic fourth here, which is to send two personal thank you letters to guys we are modeling our lives after (instead of one)

5) Book or Girlfriend: If you’re in a relationship we’re happy to hear it. Go ahead and spend some time with friends/family at the end as well. If you’re single we recommending reading an *entire book*. You will have a whole book under your belt right when you enter 2016. While everyone else is up late at night damaging brain cells you’ll be up late at night expanding your brain cells (doing the opposite as usual).

“Books are the most undervalued assets in the world. If you learn one thing to apply to life, that is worth $10K not 10 bucks. 1,000x return.” – @WallStreetPlayboys

Concluding Remarks

This is the general template we use every year, feel free to make it even more rigorous. Given that you’ll have three full days, there is no reason why you can’t 1) review your progress, 2) make a plan of attack and 3) read a full book.

If you’re really ambitious, feel free to write out your basic outline in the comments. And. By the end of 2016… You’ll look back at 2015 and say “It was all a dream…”