Category: Lifestyle

Warren Buffett is one of the richest men on the planet and in the investment world he is seen as one of the best investors of all time. His decisions have made him billions many times over.

However what is his secret? What does he do that gives him that mental edge?

It’s actually quite simple. He reads a lot!

One time he was asked what the secret to success is. This is his reply:

“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.“

That’s it. This is what gives him the combinatorial mental powers that he has. The more he reads, the more information he has, the more things he can combine.

It also makes him less impulsive and more rational. To quote him again:

“I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.“

His investment partner, Charlie Munger, also reads a lot. From all the information he reads, he creates a select amount of mental models, which he then uses to guide him when making investment decisions, as well as many other decisions in life.

For him, reading a lot (and a variety of books) is fundamental:

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.“

If you look at many of the successful people of today, the expert-generalists that have created the iconic enterprises of the past decades, they share this exact same trait with Buffett and Munger. They read a lot.

When he was young and beginning his investing career, Buffett would read between 600 and 1000 pages a day! He still spends about 80% of his day reading.

I already mentioned that Elon Musk also reads like 2 books a day. Bill Gates reads 50 books a year. In the old days, guys like Thomas Jefferson or Benjamin Franklin would also spend their days reading a variety of books.

As Benjamin Franklin said:

“An investment in knowledge always pays the best interest.“

The elite thinkers spend much of their time sucking up as much knowledge as they can.

What does the average person do? This:

There is a book by Tom Corley called “Rich Habits: The Daily Success Habits of Rich Individuals”, where the author mentions some very interesting findings.

There was a study done that surveyed the reading habits of different people. The results were quite telling.

Rich people (those with an annual income of over 160 000 Dollars) read primarily for self-improvement. Poor people (annual income of 35 000 Dollars or less) read for entertainment.

To quote him:

“The rich are voracious readers on how to improve themselves. They’re reading self-improvement books, biographies, books about successful people, things like that.“

You see what I am getting at? If you want to be successful, you need to start reading a lot. You might not become a multi-billionaire like Warren Buffett, but you will definitely have a leg up on the average dude on the street.
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“He’s back!”

No, I am not talking about the Terminator, although with the recent advances in AI and robotics, he could be here as well. I am talking about the almost forgotten, and nowdays often maligned, jack of all trades, the polymath, the Renaissance Man.

Now he is referred to as an expert-generalist. Just like the 20th century belonged to the specialist, the 21st century seems to belong to the person who can pull on different strands of knowledge from a wide variety of disciplines.

Elon Musk, Steve Jobs, Charlie Munger, all of these guys have one thing in common: their strength comes not in being good at one thing, but in knowing a lot of different things. They are the expert-generalists, the modern Renaissance Men who have gone on to become the icons of our modern age.

The advantage of expert-generalists is that they can bring in new perspectives from a variety of fields, unhindered by the often narrow viewpoint of a specialist.

A specialist can get bogged down in the little nitty-gritty details of their field, forgetting to see the whole picture. A great danger, one that they often fall for, is functional fixedness.

This is because they were taught to do something in a certain way and over the years they have become great at doing things that way. On the negative side this can put blinders on them and result in tunnel vision.

They are great at innovating within their paradigm, but this can also make them a bit stiff when it comes to paradigm change. All kinds of little cognitive biases can prevent them from seeing the forest for the trees.

If you look at the great innovators of our age, most of them were able to combine the knowledge of different fields and come up with something new. They have the ability to not only think in analogies, but also to be great first principles thinkers.

Henry Ford was able to go back to first principles and change the way that cars were manufactured by applying an analogy of conveyor belts from a different discipline.

Tomas Bata was able to revolutionize the way shoes were made and make his company one of the first true global companies, not only because he had a good understanding of making shoes, but also because he had a deep knowledge of other things, such as the psychology of people.

If you go back to Charlie Munger and his investment strategy, you will see that the secret of his success is the fact that he has a wide variety of mental models from different fields that he can call upon when needed.

The idea of an expert-generalist is as old as humanity, but the term itself was coined by Orit Ganiesh, who is the CEO of Bain Consulting. Her definition of it is:

“Someone who has the ability and curiosity to master and collect expertise in many different disciplines, industries, skills, capabilities, countries, and topics. He or she can then, without necessarily even realizing it, but often by design: Draw on that palette of diverse knowledge to recognize patterns and connect the dots across multiple areas. Drill deep to focus and perfect the thinking.“

The role of an expert-generalist is not in the trenches, doing the routine work, but instead high on top, doing the strategic thinking and making crucial decisions. This is where their expertise is needed.

Now that I have convinced you of the value of expert-generalists, one question arises: What you need to do to become one?

Well, that’s the whole point of this blog, to give you the tools that you need in order to become an expert-generalist and be able to smash through any obstacle in your way.
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Sometimes people argue about the little things, while missing the big picture.

Many people will be familiar with this situation. At work, frequently the time is spent in endless meetings, arguing over things which at the end don’t really matter.

People like to argue over tactics, without actually having an overall strategy in place.

Strategy vs. Tactics

Do you know what you want to achieve in this life and how you will do it? Does the place you work for have a clear vision of what it wants to do and how it wants to achieve it?

Most people don’t. And amazingly neither do most places of work.

Sure, you might spend countless hours arguing with your boss on whether you should do Action A, but no time is spent reflecting how doing Action A is supposed to contribute to whatever the ultimate goal is.

It’s amazing that people or places of work don’t have a clear strategy in place.

Strategy is something that is often misunderstood and rarely spelled out. Yet, having a clearly defined strategy is often the difference between success and muddling along in chaos.

If you were building a house, would you first define what it will look like and how you would build it, or would you first try to decide whether you need shovels and what length they should be?

If you want to build a house, you first need to determine what it will look like and how you will build it. Only then can you decide what types of tools you will build it with.

This is the essence of the strategy vs. tactics debate.

To help you better understand what each of the two terms means, you need to keep in mind that both words originally come from the military sphere.

In every military campaign, the goal is to win the war. However there are different strategies that you can adopt to do that.

You can rely on tanks and the blitzkrieg like the Nazi Germans did at the beginning of WW2 or on guerrilla warfare as many of the resistance groups did under occupation.

This is what falls under the term strategy. Each strategy then implies some tactics.

For example, if you are a guerrilla fighter, your tactics would consist of sabotage and small skirmishes. While if you are a tank commander who is tasked with implementing the blitzkrieg strategy, your tactics would consist of grouping tightly together large numbers of tanks and quickly overwhelming the enemies with them using speed and surprise maneuveurs.

If you are an MMA fighter, and you decide to implement the ground and pound strategy, then your tactics would consist of setting up your opponent with punches and kicks, and then in a surprise moment, bringing them down in order to control them and hit them with a barrage of punches as you sit on top of them.

Military is not the only sphere where the terms strategy and tactics are used.  Today these two concepts are used for example in business. The meaning stays the same, just the domain changes.

In terms of running a business, Alfred Chandler, a management researcher, defined strategy like this:

“Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.“

Resources are limited and you need focus in order to achieve your goals. Strategy gives you that focus.
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Most people pass their entire life doing things the same way, never considering that it is not the only way of working. Yet sometimes things change and the old ways don’t work anymore. That’s when you need to step up in order to survive.

Aesop’s Fables have been told to kids for thousands of years to teach them moral lessons and help them navigate in a complicated world. One such fable is that of “The Crow and the Pitcher”.

The allegory starts off with a crow flying around on a hot, dusty day. The crow is exhausted from thirst, but keeps on circling in the sky, eyes alert, but struggling to find anything to drink.

Finally, he spots a pitcher. Excited, he descends down to it, only to discover that it contains very little water.

He puts his beak into the pitcher, hoping to be able to reach at the water, but can’t. He tries pushing it over, but it doesn’t fall. He attempts all kinds of different ways to get at the water, but no success.

Then an idea pops into his head. He collects stones nearby and stacks them next to the pitcher.

Picking them up with his beak, he starts dropping these stones into the pitcher, one by one. Slowly, but surely the water level starts rising and gets a little higher with each stone thrown in.

Finally, he puts in the last few stones, and the water level in the pitcher rises high enough for him to put his beak into it and drink.

There are several moral lessons to be learned from this little story. Hard work, persistence and ingenuity are all things that ancient commentators saw as the things you were supposed to take out of it.

The little crow failed several times, but got back up and tried in a different way, persisting where others would have given up. He was also smart in noticing how the world works around him and applying that to solve the problem. The crow had a goal and didn’t stop until he achieved it.

One moral stands above the rest though: necessity is the mother of invention.

Old ways of doing things didn’t work any more. The crow tried all the traditional ways of getting at the water, but not one of them worked.

In order to survive, he needed to start thinking outside the box.

As a result of that little incident, the crow experienced an internal paradigm shift. However this was not only a change in how he views the world, but a change in how he works in the world.

He realized that he didn’t need to rely only on his own body to do things, but that he could use other objects lying around to help him perform different jobs better.

The crow became a tool user.

The story is not far from the truth, in fact modern crows have been studied and have exhibited similar problem-solving and tool-using techniques.

Once you learn that you don’t need to rely on what nature gave you in order to do your daily activities, but instead can pick up different objects in your vicinity and use them to help you, it’s a huge revelation and it completely changes the way you live.

You expend less energy, and need less resources to do daily things. You can also do new things, things you have never been able to do before.

It opens up a world of possibilities. Possibilities that had been closed to you before.

Chimpanzees and other primates have also been seen using tools in the wild. Different groups use different tools and techniques, which means that it is not an instinctual behavior, but instead a learned one.

It has been observed how when one individual discovers a new technique to do a certain activity, the technique spreads to many of the other individuals in the community. This new way of doing things completely changes their lives.

They experience a paradigm shift.

Technological Revolutions and Paradigm Shifts

When our ancestors picked up tools for the first time, they also experienced the first technological revolution.
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There is one little number that is key to most of your major problems. When you learn about this number, you will realize what the main culprit of your frequent despair is.

What is this magical, all powerful number? Wait for it… wait for it… it’s 150!

WTF?

Dunbar’s number is the number of people you can maintain a stable and meaningful social relationship with, and is based on some calculations done by Robin Dunbar, a British anthropologist and psychologist.

This is how he came up with the number:

“I was working on the arcane question of why primates spend so much time grooming one another, and I tested another hypothesis – which says the reason why primates have big brains is because they live in complex social worlds. Because grooming is social, all these things ought to map together, so I started plotting brain size and group size and grooming time against one another. You get a nice set of relationships.

It was about 3am, and I thought, hmm, what happens if you plug humans into this? And you get this number of 150. This looked implausibly small, given that we all live in cities now, but it turned out that this was the size of a typical community in hunter-gatherer societies. And the average village size in the Domesday Book is 150 [people].“

What he is saying is that the psychological make-up of humans is geared towards living in a community of around 150 (plus or minus) people. This is the number that is observed in hunter-gatherer societies around the world, but also the average number of people that have lived in villages up until modern times.

Chimps also confirm this number, with the largest chimp community in the wild, the Ngogo group in Uganda, numbering around 200 individuals (but most other groups being even smaller – around 50 to 60).

In such communities, you know everyone, you interact with everyone and know a lot about them. You can observe other people in your community and learn much about who they are and how they do things.

You can also form much closer links and bonds with them. Contrast this to how people are living in the cities of the modern world.

People are everywhere, yet it seems that most people are feeling more isolated than ever. Less and less people have deep relationships with other people. Rates of depression are skyrocketing.

The reason for this is found in Dunbar’s number. In cities, on a daily basis you encounter many more people than this in different types of situations.

It is impossible to form stable relationships with most of them. You only interact in very limited situations and don’t get to know them well.

The social relationships between people are broken. In one instance you are together with one group of people (for example at work), at another instance you interact with another group of people (for example in an after-work class), but these interactions are often shallow.

In the meanwhile, you also pass countless other people in the streets. All these different combinations add to the complexity and your brain usually isn’t able to handle this in an optimal way. There is a huge disconnect.

People are trying to substitute this void with social media, but deep down it isn’t working.

Maria Konnikova writes that the core of human bonding are face-to-face shared experiences. This is getting replaced by supposedly shared experiences online:

“We do have a social-media equivalent—sharing, liking, knowing that all of your friends have looked at the same cat video on YouTube as you did—but it lacks the synchronicity of shared experience. It’s like a comedy that you watch by yourself: you won’t laugh as loudly or as often, even if you’re fully aware that all your friends think it’s hysterical. We’ve seen the same movie, but we can’t bond over it in the same way.“

This means most relationships in the modern world are quite superficial. This type of online interaction also kills your real life social skills:

As Dunbar states:

“In the sandpit of life, when somebody kicks sand in your face, you can’t get out of the sandpit. You have to deal with it, learn, compromise. On the internet, you can pull the plug and walk away. There’s no forcing mechanism that makes us have to learn.“

That’s why narcissism seems to be growing.

The main reason for this is that the number of people we have to deal with on different levels in this world is way above the 150 Dunbarites.

David Wong, in an excellent post on what he calls the “monkeysphere” illustrates what happens:

“Most of us do not have room in our Monkeysphere for our friendly neighborhood sanitation worker. So, we don’t think of him as a person. We think of him as The Thing That Makes The Trash Go Away.“

Most humans become just statistics barely even registering on your radar. The further away they are, the less you care.
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The second inning has just ended. Relief pitcher “Turk” Wendell quickly gets off the field and goes to… brush his teeth!

Not because he thinks that it will help him prevent rotten teeth, but because he believes it will help him win baseball games.

Wendell was voted the most superstitious player of all time by “Men’s Fitness”, but he is far from being the only athlete to have some weird little ritual.

Actually, if you look at it, most people are at least a little bit superstitious. Whether it’s black cats, that lucky pencil, or looking in the eyes when toasting, almost everyone has some belief that they have to do for good luck or to prevent bad luck.

It’s an irrational belief, but people accord this act a particular significance.

Why do people do this?

One explanation that has been proposed by researchers is called the uncertainty hypothesis. This means that people become more superstitious when they encounter things outside their control.

They feel like they don’t have power over the outcome and so they try to figure a way to control at least partially what will happen.

This hypothesis was initially proposed by anthropologist Bronislaw Malinowski when he studied the Trobriand Islanders in Melanesia.

He would follow them on their fishing trips and note down how they do things. Sometimes they would fish in shallow water and sometimes in deep water.

One thing that he noticed is that when the islanders would go on dangerous expeditions on the open sea, they would perform elaborate rituals. This did not happen when they fished close to land in shallow waters.

For him, these rituals showed that the fishermen tried to exercise at least some control over the conditions on the sea, which was often unpredictable and sometimes deadly. These rituals gave them a peace of mind that things would turn out all right.

You would think that these types of things just happen in primitive societies, and would die out in our modern society, but that is not the case. Superstition is going strong even now among different varieties of people.

A factor that is significant in this, is how often people rely on intuitive thinking (System 1) and emotions over rational thinking (System 2) in their daily lives. Research done by Marjaana Lindeman showed that people who relied more on the first also tended to be more superstitious.

So engaging in critical and rational thinking tends to lessen the tendency to resort to superstitious rituals.
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A while back, I wrote an article on what it means to be a contrarian. It’s someone who goes against the current and doesn’t just blindly follow the herd.

Since that time, the internet has exploded with people professing to be contrarians, but in fact using the same type of herd-mentality tactics and arguments that the average Joe or Jane usually fall for.

How do you distinguish between a real contrarian and a wanna-be contrarian? A real contrarian is someone who is a critical and rational thinker first and foremost. He is someone who is aware of his own cognitive biases and tries to overcome them.

Instead, the fake contrarians that are popping out from left, right, up, down and whatever other hole they were previously sitting in, are not only deeply unburdened by any sense of logic, they in fact actively try to exploit the cognitive biases of others.

It all started with click-bait

The internet has come onto the scene in the past two and a half decades and brought the average human access to vast stores of knowledge than any time previously in history.

However with that knowledge also came dangers.

Humans are fallible creatures easily tricked by their own emotions and it didn’t take long for internet marketers to take advantage of it.

In the early times of the internet, this was a bit harder to do. Yeah sure, there was advertising, but it consisted largely of static banners (and later annoying pop-ups), which while effective at getting money, were still relatively harmless.

A bunch of people did fall for those penis pump ads, but seriously the people who did were ripe for the Darwin Awards.

At that time, if you clicked on a website, or if you typed in a certain term in a search engine, you would be served the same banner ad or the same exact results as everyone else.

While at uni, I remember interviewing an exec of an online advertising company (the ones creating the banner ads) for one of my school projects. At the end of the interview he mentioned what the El Dorado of online advertising would be for him: people seeing the right ad at the right time.

I had a hard time imagining how that would work. In those days, you were still largely anonymous on the internet. Cookies were starting to make an appearance, but they collected relatively little significant data on you.

However, the times changed fast. The technology that was used got more sophisticated, the algorithms got tweaked and started to incorporate more and more user data (including their surfing habits) in order to get a more personalized experience.

There are many positives with that. Instead of getting all the standard ads you didn’t care about, you got things that might be of interest to you.

Also your search results became a bit more relevant to your own context and situation.

Yet, with all this you also started to get entrapped in your own little bubble. These things promoted different cognitive biases that your brain often falls for, chief of which being confirmation bias.

It wasn’t long before internet marketers started taking advantage of this state of affairs.
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It is a time of decay. Rome, once the mighty capital of an Empire spanning three continents, is a rotting, crumbling shadow of its former self.

The old institutions of the city, like the formerly powerful Senate, are still there, but entering the last few decades of their existence.

The ruler of Rome is no longer a Roman, but instead a barbarian King named Theodoric.

Theodoric was the King of the Ostrogoths, a Germanic tribe which had been previously settled in Pannonia on the banks of the Danube River. Always in search of land, they had then moved downriver into the Balkans.

From their settlements deep in Lower Moesia, the Ostrogoths had been pillaging the Eastern Roman Empire, even threatening the capital of Constantinople itself.

In order to protect his lands, the Eastern Roman Emperor Zeno urged Theodoric to instead turn his wrath towards Italy.

There the ruler was Odoacer, the Germanic chieftain and King who had overthrown the last Western Roman Emperor, Romulus Augustus. Thus he had ended the Empire in the West for all eternity.

Theodoric sent all his forces into battle and defeated Odoacer, founding an Ostrogothic Kingdom in Italy. Rome became just another city in his kingdom.

It is 523 AD, and a man is sitting in a darkly-lit cell, awaiting trial for a crime he did not commit. He was falsely accused and brought down by dishonest men who coveted his position.

The man, in his mid-40s, takes up a pen and starts writing. One question bothers him: How is it that in a supposedly just world, good men suffer bad things, while evil men often triumph?

Boethius, or in his full name Anicius Manlius Severinus Boethius, was born into an ancient Roman noble family. Among his ancestors he could count Roman emperors, consuls and senators. He was a senator himself, who rose to become a consul, and later a high-ranking official in the court of Theodoric.

Boethius had jumped to the aid of a friend who was falsely accused of treason against Theodoric and for that had been in turn accused of treason himself. His enemies brought out false witnesses against him and he was thrown in jail.

Being a man of learning, Boethius used the time during which he was locked up for productive purposes. As a scholar of ancient philosophy, he used his knowledge to draft a manuscript which in the Middle Ages and the Renaissance would become one of the most influential works of Late Antiquity. It is called “The Consolation of Philosophy”.

It was a dark time in the man’s life, knowing that his days were numbered and he was about to die. This was made even more difficult by the fact that this situation was not of his doing. He had tried to be a good and honest man, but shady and dishonest men brought him down.

An honest man was about to be executed based on false accusations, while crooked men were enjoying riches and privilege. This state of affairs caused him to lose sleep. How could this be in a world supposedly ruled by a just God?

This is the question that many people have asked themselves throughout history and continue asking themselves now. Why do good people get punished and bad people rewarded?
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In an interview for “Popular Science” magazine, Nick Offerman, the guy who plays Ron Swanson on the series “Parks and Recreation”, talked about his love for building things with his own hands.

He is a guy who has enough money to buy whatever he wants, but he still keeps a small woodworking studio on the side and using traditional techniques (they won’t even use a cutter jig to cut their dovetail joints!), builds all kinds of stuff out of wood.

To quote Offerman:

“Keeping whatever calluses I can on my hands is an important part of my personality.”

If you think about it, you are probably not that different yourself and neither are the people you know. You (or many of your friends) still probably keep that crude “bird” you cut out of wood in 6th grade during your “I want to be an expert craftsman” phase or that model airplane you spent months building, almost giving up at certain points, but always returning again to glue one more piece.

I remember how proud I was when I finished a crappy Tic Tac Toe game in my QBasic class back in high school. It only had some basic functionalities, shitty graphics, and wasn’t very exciting, but the important thing was that I had programmed it myself and it worked!

It’s a psychological effect. People feel much more proud of something that they had built themselves, than of something that they bought off the shelf. There is a sense of accomplishment that fuels self-esteem.

The Ikea Effect

IKEA is a billion-dollar furniture company that has stores around the world. It sells furniture that you have to assemble yourself, and that is the secret of its success.

A study that came out in 2011, examined what it calls the “IKEA effect”.

The psychologists behind this study had people assemble IKEA boxes, fold origami and build Lego sets. What they found out was that at the end, after successfully finishing their products, these same people valued them as highly or even more so than the same products created by experts.

Basically, people had a preference for building things with their own hands, over getting everything done for them. And this is exactly the business model that IKEA has employed right from the beginning.

The psychology behind this is related to a cognitive bias called the endowment effect. Things that you own (and things that you create yourself) have a much bigger emotional value for you than ones you don’t:

“In one experiment a social psychologist found that people were more reluctant to give up a lottery ticket they had chosen themselves, than one selected at random for them. They wanted four times as much money for selling the chosen ones compared to what they wanted for the randomly selected ticket. But in random drawings it doesn’t make any difference if we choose a ticket or are assigned one. The probability of winning is the same. The lesson is, if you want to sell lottery tickets, let people choose their own numbers instead of randomly drawing them.” Peter Bevelin “Seeking Wisdom”

This is also why people often get attached to their houses or cars and have a sense of loss when they have to move out or give them away.

The lesson here is if you involve others in the making of a final product, whether that product is a project, a model airplane, or a piece of furniture, they will value the final product much more than if they were not involved at all.
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