Tony Robbins joined James Altucher to talk about his book, MONEY Master the Game: 7 Simple Steps to Financial Freedom. The conversation explores many ideas and stories from the book and besides getting the Tony Robbins attitude, the interview provides a nice overview of what the book offers.

Altucher begins the interview by telling Tony that he’s had a big effect on James’s life. He says that he read Tony’s book over and over a decade ago, and it made a big difference in his life. Robbins thanks Altucher for the kind words and says that he was glad to help, in fact, it’s wanting to help now that inspired him to write this book. He says that 2008, “made me sick.” Between the story told in Inside Job and the ruin he saw, Robbins felt for the people. Not only that, but he tells Altucher that he wrote this book too because “we didn’t just bail them (the bankers) out, we put them in charge of the recovery.”

As he watched what unfolded, he felt the need to do something and realized that his power was the power of connection. He tells Altucher: “I’m gonna go to 50 of the smartest people in the world financially.. and say, what did they do? How did they get there?” Later in the interview Altucher calls this the Tony Robbins method; find successful people and see what they do.

Very quickly Robbins saw that money was a complex subject and tells James that “complexity is the enemy of execution.” Fees alone are a swamp of hazards that can trip up your returns and knocked you down. Robbins found 17 different kinds of fees that may be attached to financial products and while they seem small, they add up.

Imagine, Robbins tells Altucher, that three people each invested money for 30 years and earned 7%. The only difference is that person A pays 1% in fees while person B pays 3%. It doesn’t sound like much but A makes more than one and a half times what B does ($7M v $4.2M for example).

Warren Buffet would suggest an index fund with minimal fees, and made a bet along those lines. In 2008 he bet Protege Partners that after fees were subtracted,  Vanguard’s Admiral fund would outperform any five hedge funds of their choosing. Buffet is up 43% so far while Protege is up 12.5%. Those figures are from this very interesting Fortune article which that shares nuances of the original million dollar bet have changed its structure as well. Do read it.

Beyond the fees that active investors charge, there is also the “skin in the game” problem that inflicts money managers. It turns out that very few “eat their own dogfood” (or use their own lathe). In the book Robbins reports that nearly half of all fund managers, don’t own any shares in the fund they manage.

Past guest Nassim Taleb calls this the “skin in the game” problem, and says that it’s a big one, he writes:

Which brings us to the largest fragiliser of society, and greatest generator of crises, absence of “skin in the game.” Some become antifragile at the expense of other by getting the upside (or gains) from volatility, variations, and disorder and exposing others to the downside risks of losses or harm. And such antifragility-at-the-cost-of-fragility-of-others is hidden – given the blindness to antifragility by the Soviet-Harvard intellectual circles, this asymmetry is rarely identified and (so far) never taught.

In “Brooklyn English” this means that without bearing the consequences of your decisions, you learn nothing from them. Any parent knows this after seeing their child do something foolish and think, “well, I told  you so.” The kid had to have skin in the game to learn.

Robbins tells James that “the goal of this book is to make you the chess player, not the chess piece” and he went out to find the best players.  He tells Altucher that he learned this strategy – of finding the best of the best – early on when he had to teach the US Army how to shoot. He says that he showed up and asked the Army to give him the experts and masters in pistol shooting and he observed them. While watching he would say, “Stop, what are you doing in your head? What are you doing internally? Externally?” Robbins was look for the things experts consistently did and tried to model that for everyone else. It worked.

The biggest, consistent things he learned from those experts were:

1. Diversify your holdings
2. Minimize your taxes
3. Don’t lose money

The average Joe has to learn these things because, as the poet once said, the times they are a changin.

What does that change look like? Robbins tells Altucher that it means being valuable to many. Growing up he wondered how his dad could work so hard as a parking garage attendant, but not make much money. He worked hard, but he was working hard at the wrong things. Robbins realized that there isn’t value in a job everyone can do. You have to find and build skills that are valuable.

In Average is Over Tyler Cowen makes the case that the valuable skills will be working well with computers. His proving ground is the chessboard where the human-computer teams are the most dominant, beating either human or computer. Ditto for medical surgery, teaching, or stock trading. The humans need to know how to leverage the computer, that’s the value proposition. Cowen wrote, “Writers and teachers need to consider what aspects of their work are better done by intelligent-machine analysis and look closely at the irreplaceable value they do provide.”

In the interview Tony Robbins provides a different example. He sees the light at the end of the tunnel, but rather than being the oncoming train, it’s the driverless truck. Robbins wonders if truck drivers see technology coming and changing their lives much like it did for farming. He writes, “In the 1860s, 80% of Americans were farmers. Today 2% of the US population work in farming and agriculture, and we feed the entire world.” What we aren’t doing then is looking toward the future at what our careers and financial futures look like. But how?

What do you do then? In Choose Yourself, Altucher gives rules for getting started with something.

1. Take out the middleman.
2. Pick a boring business.
3. Get a customer.

The book lists four more, but that’s good enough to start (and if you haven’t read it yet, what are you waiting for?)

One way that Robbins focuses on becoming valuable is another tip he learned from the successful people he’s coached. “Every great person I know spends 1% of the time on the problem and 99% of the time on the solution.” In the interview he uses the Occupy Wall Street protests as an example, wondering how people making over $30,000 a year can be outraged when they themselves are the global 1%. This limited scope is what Taleb calls domain dependence, where our thinking in one area doesn’t translate to another. You may be poor in America, but globally you’re not. Cowen takes a similar angle, suggesting that even though there is a stagnation in earnings, our lives still get better. The stock market took five years to bounce back, but few would want the medical treatment, entertainment, and food choices of five, ten years ago. For a more tangible example look at your smartphone, even the iPhone is only 7 years old.

What Robbins is suggesting in the interview – and book – is to construct what you need in realistic stages. He tells Altucher that financial security and absolute financial freedom are two different ideas, but that we should know what both mean for us. The first includes the five basic areas for security; housing, utilities, food, transportation, and basic insurance. Once you have these things taken care of you have a peace of mind. Plus, getting to that stage is a lot easier.

One modern day model of this is Mr. Money Mustache (MMM). In 2014 he lived the luxurious life for a total of $25,330. He is living one version of what Robbins is telling Altucher, find what you really want in life and work for that. For MMM it meant retiring at 30 but he hardly feels deprived. One action he took is to ask, “will buying this really improve my overall lifetime happiness?” In many cases the answer is no, and he’s happy without.

For MMM, $600,000 is what he needed for complete financial security. Robbins wants his readers to find their own number, because like many of the people he’s coached, bringing our target closer makes it easier to achieve. In his own life he found that moving to Florida saved him enough in state income taxes to pay for his new house there. In six years! Florida’s zero state income tax is the opposite of Californias 10+% bracket.

Part of what Robbins wants everyone to do is just to start, start thinking, investing, and acting in a way that leads to your dreams. He tells Altucher that people project the best motivations on themselves and less great ones on others. This is known as the fundamental attribution error (FAE) and it’s a problem for people like you (just kidding, that’s the error right there). The problem is that we tend to see mistakes by other people as their fault, and our mistakes as conditional. Your brother lost money in the stock market because he’s reckless, you lost because the market tanked. Robbins wants you to be thinking with less bias, to realize that it’s your choices too that affect what happens.

Altucher asks Robbins what would happen if he had to start from scratch, and Tony says that this happened to him after his divorce. Needing money, he got back to work and he leveraged his skills of serving many to build up his income again. That’s what he calls “a winter in life” and tells James “we all have them.” Being born in 1928, or graduating in 2008 was bad luck, but there’s nothing you can do about that. The thing you can do is make the best of what you have.

In the book Robbins outlines financial products and themes to fight these financially winds, and while even good plans go down, we always have our frame of mind. In Robbins’s other books like Awaken the Giant Within he has quotes from the stoics in regard to our mental fortitude. In our pursuit of wealth we may never get the beach house, but maybe we don’t need one. In Meditations Marcus Aurelius wrote:

People try to get away from it all – to the country, to the beach, to the mountains. You always wish that you could too. Which is idiotic: you can get away from it anytime you like.  By going within.  Nowhere you can go is more peaceful-more free of interruptions-than your own soul.

Near the end of the interview the pair talk about effective communication being important, even when you’re right it doesn’t matter if you can’t communicate with people who disagree with you. If you haven’t read it yet, go get Getting to Yes as the de-facto starting point for thinking about negotiation and communication. You’ll also be following Warren Buffett’s best piece of investment advice – invest in yourself. Buffett spends 80% of his work day reading, accumulating facts and corralling ideas. After investing in yourself, you can begin the investing strategy he suggests to Robbins. From MONEY Master the Game:

All he would tell an individual investor today is to invest in index funds that give you exposure to the broad market of the best companies in the world and hold on to them for the long term.

And when he dies, what will he suggest for his family?

Put 10% . . . in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors— whether pension funds, institutions, or individuals— who employ high-fee managers.

The interview ends with Robbins telling Altucher; “most people overestimate what they can do in a year and underestimate what they can do in a decade.” What action will you take?

Notes: Robbins’s book is good, but has had a fair amount of criticism online. Do educate yourself, but taking a motto from the book, diversify where you learn and what.

Thanks for reading. These posts take 3-5 hours to write and writing is how I earn a living. Please either share this post or donate. 

James Altucher interviewed Simon Rich about writing, writing for Saturday Night Live, reading for writing, and did I mention writing. Despite the singular subject it was entertaining throughout. One note, there were a lot of books mentioned in this episode, and I’ve included links to them here, just make sure you’re logged into Amazon. Rich joined Altucher to promote his new book Spoiled Brats.

As the recording equipment gets set up, Altucher asks Rich if he actually listens to any podcasts. He says it seems like everyone is doing them, but can’t think of many people that listen to them. Rich says he listens to the Posting and Toasting New York Knicks podcast and sometimes Jalen Rose. Altucher said he likes WTF with Marc Maron and Nerdist with Chris Hardwick. He also says he should listen have been listening Adam Carolla – a past guest – before interviewing him, but listens to his podcast now.

Then the reading love affair begins, and it really is an intimacy with the printed page. Altucher says he’s read all of Rich’s books and that they were hilarious. Those books are:

The Last Girlfriend on Earth: And Other Love Stories. Thirty short stories about love.

Ant Farm: And Other Desperate Situations. The humor in our everyday lives, including the classic conundrum, “If your girlfriend gives you some “love coupons” and then breaks up with you, are the coupons still valid?”

Free-Range Chickens. A follow up to Ant Farm with more stories of comedy from our “hopelessly terrifying world.”

What in God’s Name: A Novel. God as an absentee owner of Earth who delegates our survival to a pair of angels.

Elliot Allagash: A Novel. The kid who no school could control turns his attention to helping a the least popular kid.

The Married Kama Sutra: The World’s Least Erotic Sex Manual. This “sequel” to the original includes the “prodding position,” where the woman cleans near a man’s feet so as to prod him into helping. The Daily Mail has more illustrations, all SFW.

The pair quickly jump into Rich’s experience at SNL, and he gives some nice backstage information. For one, that he wrote the opening monologue for Seth Rogen, and that most hosts never write their own. That speaks to both the talented writers at SNL, and the hosts who can deliver it so naturally. Rich also said that laughter during rehearsals is a key factor in getting skits to make the final cut. If shows run long before going live, odds are the sketches with the fewest laughs will be the first to go. For more SNL history, Bill Hader said in a NYT interview that “the “S.N.L.” book is Tom Shales and James Miller’s oral history, “Live From New York.” I think most current cast members, the day they find out they’ve been hired, run out and buy that book to see what’s in store for them. I know I did.” In the same interview Hader also said “Simon Rich’s “What in God’s Name” was brilliant. Actually, most of his books are brilliant.”

Rich says that when he wants to see something funny he’ll watch Mr. Show (YouTube clips) with his writing staff.  A few times in the interview he tells Altucher that he watches or reads something to see how it was done. “We should really watch this Mr. Show sketch because it’s very similar to the premise that we’re trying to pull off here.  Let’s learn from this great sketch.” Mr. Show was co-created by Bob Odenkirk who also has a new book out, A Load of Hooey. Ditto for BJ Novak (who also has a book out, The Book with No Pictures), and who recommends Rich’s writings. In his interview with Altucher, Rich explains that comedy writers may not laugh out loud because something is funny, but appreciate jokes on a different level. They may not laugh, but they certainly put in good word about their comrade’s books.

One of my favorite comedy writers alive has a new book out, and it is brilliant. Check out “Spoiled Brats” by Simon Rich.

— B.J. Novak (@bjnovak) October 15, 2014

James and Simon talk about 1990’s sketch shows like Kids in the Hall, The State, and Upright Citizens Brigade. They have an interesting conversation about what shows were “the best.” Rich says that it’s hard to figure out the best of something because the order and circumstances matter. “It’s sort of unfair to compare those shows.  You know, it’s like comparing, like, the – you know, the Beatles and, like, the Kinks and, like, the Smiths.  It’s like you have to kind of – they’re so influential on one another.”

Altucher opens a new drawer to ask about the nuts and bolts of writing, and Rich does not disappoint, telling Altucher, “my favorite comedy games are thousands of years old.”

“What do you mean by a comedy game?” Altucher asks.

Rich then goes on to talk about story archetypes. One is the character who is naively missing a key to their survival. Later in the interview he says that another type is the “do anything to get to the top type.”

Whenever writers explain things like this I’m struck by how obvious it is in so many stories. Like a Magic Eye picture, once you know what’s there, you can more easily see it. (Couple that thought with this book.)

Then Rich gives the funniest joke breakdown of Abraham in the old testament. Like Altucher, I had never thought about it this way, but laughed out loud after hearing it.

Rich then talks about the difficulty in being a good stand-up comedian, which Altucher thinks he could do, but Rich doesn’t. He says, “Well, I just know myself to be a terrible performer.  I can tell from reading my pieces out loud in front of people.  And also, you know, you – usually stand up comedians, they love performing.  You know, just like how I love writing.”

Altucher asks Rich about his writing habit, to which he responds that he writes seven days a week. Simon echoes past guests like Matt Stone, when he says that writing is something that you should only do, it if you really want to do it. “I never get anxious about what I’m gonna write ‘cause it – if I don’t have anything to work on, that’s when I get to come up with something new, which is its own kind of fun and exciting experience.” Some days he’ll continue writing what he was working on the previous day, like a screenplay. Other days he’ll have nothing to do and that’s when he gets to work on a new project. “ I wake up in the morning and I’m really excited to sit down and write.  That’s – I can’t wait to do it.”

There’s a lot of conversation in the middle about Simon’s upcoming show, praise of other comedians, and why every four years people hate SNL but not Family Guy.

Then Rich gives a great writing tip about writing comedy – take one idea and flip it. He says:

“All you’d have to do is be, like, have somebody say, yeah, I won.  All right, great.  So what did I win?  You know, then all of a sudden you’re – and it’s like, why’s everybody looking at me.  Is it a car?  It’s a car, right?  I mean, you know, it doesn’t take that much to flip something.  Same thing with Stephen King, like a lot of his premises can be flipped.  The Simpsons has been doing it for years, all their Halloween specials.  You just take a classic Twilight Zone premise, a high-stakes Twilight Zone premise and you just tweak it really very slightly and all of a sudden you’ve got a great comedy premise.”

On his website Stephen King shares how he gets some of his ideas. “I get my ideas from everywhere. But what all of my ideas boil down to is seeing maybe one thing, but in a lot of cases it’s seeing two things and having them come together in some new and interesting way, and then adding the question ‘What if?’”

Off hand I remember hearing about him saying that as he walked out to his mailbox one day and collected its contents, there was a missing persons, “have you seen me?” card. This sparked the idea for a story where those faces could talk to him. About these ideas, King says that he never writes them down, taking their mental stickiness as a gauge for how interesting they truly are.

The pair then get into a whole slew of books that would make me really smart to have read, or at least that’s how they sound. The spitballing of literature includes:

Douglas Adams, Rich says his books kinda bleed together into a single awesome story. Kurt Vonnegut is “another one of my (Rich’s) favorite writers.” Ditto for T.C. Boyle, and the pair agree that Greasy Lake is great. Other writers that Rich enjoys are P.G. Woodhouse, Ray Bradbury, Philip Dick, Roald Dahl, Alec Wilkinson, and Jon Ronson.

Despite all these books and television shows they turn the pages of and reflect on it’s “The Simpsons above all.”

Rich’s has said in another interview that he quotes The Simpsons “ad nauseum.” One interesting moment of the interview was when he was telling Altucher about sitting down with his writing team and saying “we need to make this scene more like this very, very specific, you know, joke or scene or premise on this The Simpsons episode” and who is on his writing team but former Simpsons writer Ian Maxtone-Graham who ”will remember when, you know, he or somebody else wrote it, which is a totally surreal experience.” I’m no where near as big a Simpsons fan as Rich, but that would be cool.

A little later in the interview Rich implicilty gives advice that Scott Adams (a past Altucher guest) shares. About BJ Novak, Rich says, “Right, well that’s a guy who’s obviously a brilliant writer, but he also happens to be a great actor and performer, which is just like – I mean, that’s like knowing how to play guitar and sing.  Like, what are the odds, you know, and if you can do both of those, it’s extremely impressive.”  Adams would define this in terms of his success formula, that is “every skill you acquire double your odds of success.” While this isn’t a mathematical proof, failing to stand up the real world physics, it’s ethos is right. Novak has his level of success because he’s a brilliant writer + great actor + performer.

The interview was good throughout, and if like me, you haven’t read anything by Simon Rich yet, check out Sell Out online at The New Yorker.

Astro (@astroteller) and Danielle Teller joined James to talk about marriage, divorce, constructs, rules, and what really matter for raising happy, healthy kids. Rather than an overall summary of the episode, here are 10 lessons.

From Amazon, here is a snippet of summary, “In the same way that Esther Perel’s bestselling Mating in Captivity gave couples a fresh perspective on their married life, so Sacred Cows invites reader to question assumptions and conventional wisdom. It offers a smart, insightful, and sympathetic view for those in a marital crisis, marriage counsellors, or anyone looking to gain a fresh perspective on one of our most cherished and misunderstood institutions.”

Lesson 1: Find out the rules of the game

A big part of their book, Sacred Cows, is that there are rules to the marriage game we don’t fully understand. Danielle tells James, “our society has created a whole set of boogie men to scare people into staying married.” We may promise to love you forever, but when we are young, do we really know what that means?

As the ballad about a boy rounding third, and trying to score goes:
[Girl:]Will you love me forever?
[Boy:] Let me sleep on it.
[Girl:] Will you love me forever?
[Boy:] I couldn’t take it any longer, Lord I was crazed, And when the feeling came upon me, Like a tidal wave, I started swearing to my god, And on my mother’s grave, That I would love you to the end of time, I swore I would love you to the end of time.
So now I’m praying for the end of time, To hurry up and arrive, ‘Cause if I gotta spend another minute with you, I don’t think that I can really survive.

Lesson 2: Expect bumps

Danielle tells James, “much of the pain of divorce is unavoidable.” Marriage has bumps too. Our ceremonies are white and clean and neatly pressed, but our lives won’t be like that and knowing this makes those transitions easier.

In Switch, Chip Heath writes that we should plan for some things not to go well when we try to adapt any change. If you’re dieting, you will be tempted and maybe fail. If you are trying to write everyday, some days that writing will be crap. If we begin our journey with the idea in mind that there will be challenges, we may be better able to face them.

In episode #78, Sam Shank said that in running Hotels Tonight they expect these sorts of things to happen. He tells James that not only do they respond quickly, but systemically for both the customer and hotel. If a hotel turns away enough Hotel Tonight clients, they get dropped from the service.

Lesson 3: Be wary of statistics

Astro and Danielle talk about the types of people who get divorced and it’s really a muddled mess. There’s no good data because there is no good data set. A randomized control about divorce that strides across income, family structure, or other variables doesn’t exist. Divorce statistics suffer the same selection bias that James writes about with some college statistics:

Any college Freshman who takes Statistics 101 (and I know I’ve said this before so I wish these Georgetown people would let me teach their Statistics classes) will have heard of something called “Selection bias” which this report is littered with.

In other words, they did not just select people with many years of education. They inadvertently also selected “the type of upper middle class person who is intelligent, ambitious, aggressive” who chose twenty years ago to go to college. That type of person will certainly make more money than his peers twenty years later.

Lesson 4: Find what is essential

James tells Astro and Danille that he spends more quality time with his kids since getting divorced to which Astro says, “I’ve never heard a divorced person say anything but that.” What the divorcees have found is the essential parts of their relationship. My guess is that because James finds his time with his daughters finite, he fills that time with things that are valuable to them. When we have to, we cut through the clutter in our lives.

Greg McKeown writes about finding what is essential in Essentialism. He says, “it is about pausing constantly to ask, ‘Am I investing in the right activities?” One way to do this is to focus on what is truly essential. Facebook, no. Extra hours at work, no. What you and I need to live on is so small that if we can find that, we can find happiness.

Joshua Becker writes at Becoming Minimalist and he has an good origin story. One day his son was playing in the backyard while Joshua cleaned the garage and his wife cleaned the bathrooms. After a while, his son came to ask if he could play with him, and Joshua said no, he had to finishing cleaning the garage. His son turned away, and a bit later a neighbor who was doing the same thing came over and said, “maybe you don’t need to own all this stuff.” This began Becker’s move toward minimalism and finding what is essential.

Lesson 5: Fast and intense or slow and muted

James tells the Tellers about his divorce, and relays that he set up a corporation to handle the financial part of the divorce so that they didn’t have to deal with that right away. It let him and his ex-wife focus on the emotional and relational hurdles before the financial ones.

This reminded me of Dan Ariely’s interview where he tells James that when he was in the hospital, it was much more comforting to have his burn bandages slowly removed rather than quickly peeled away. Despite this, the nurses did the opposite. This inspired Ariely’s career of looking for other misconceptions we have.

Lesson 6: Separate the people from the problem

Danielle says that it’s a challenge to switch from an intimate relationship to what becomes a business one. James circumvented that by forming a corporation but many people won’t. Instead, they can draw on the strategies from Getting to Yes, the starting place for good negotiations.

This classic book (#1 in business negotiating on Amazon) suggests we start the negotiation by separating the people from the problem. The authors write:

Failing to deal with others sensitively as human beings prone to human reactions can be disastrous for a negotiation. Whatever else you are doing at any point during the negotiation, from preparation to follow-up, it is worth asking yourself, “Am I paying enough attention to the people problem?”

We are always negotiating and can remember that there is always the people and the terms. Don’t take your eye off the prize of the problem to focus on what the people are doing wrong. Even if your ex, boss, or landlord is an absolute jerk, remember that some people are like that, but that’s not what you are at the negotiating table to determine. You want to solve your interests. 

Lesson 7: Wield social pressure wisely

I’ve got a friend who’s starting the new year with a 30 day challenge to read the bible. Each day his update shows up on Facebook and I ‘like’ the post. If he missed a day I can encourage him or ask what’s going on. This is the same social pressure that morning show talking heads encourage with resolutions. Tell people and you’ll be accountable to them. BUT.

Astro and Danielle hint that maybe there is a dark side to this. When we invite people to our wedding we’ve started a social pressure that gets away from us. Like a spark can light dried newspaper, the large wedding begins the social pressure to stay married.

Lesson 8: Remove the worst thing first

James says his biggest fear during the divorce was what might happen with his kids. He was worried about being seen a certain way or not seeing them. The Tellers console him by explaining that most things that happen to our kids don’t push the needle one way or another. If you avoid the biggest two, neglect and abuse that goes a long way. Like our selection bias from divorce statistics and incomes of college graduates, there’s no compelling data about what to do with kids. Just to love them.

Tweet: “Remove the worst things first”

In the Nassim Taleb school of parenting these ideas are known was lessons in via negativa and barbell thinking. Via negativa is the act of removing things that have questionable or not positive effects. The big kids should remove sitting, smoking, and crappy foods and enjoy the fruits of our labor in the pursuit of health. Our kids need the removal of abuse and neglect. Taleb is keen to point out that telling people to remove things is a hard sell. He writes, “I have used all my life a wonderfully simple heuristic: charlatans are recognizable in that they will give you positive advice, and only positive advice.” People who always tell you to do this, in ten steps, and buy my program will fall into this camp. The second lesson is thinking about the barbell strategy, or that less is more. Rather than parenting tips online, find out what the key parts of childhood are and do those. Love is probably the biggest. Make Taleb happy and go ask your grandmother for advice rather than Parenting magazine.

Lesson 9: See things as they truly are

Danielle tells James, “just examining whether there is truth in a lot of these social beliefs make them go away. Just like looking at a monster, you realized it’s not real.” She’s talking about social rules we have for getting, being, and staying married. This idea of seeing things is nearly as old as marriage itself. Two-thousand years ago Marcus Aurelius wrote:

Always define whatever it is we perceive – to trace its outline -so we can see what it really is: its substance. Stripped bare. As a whole. Unmodified. And to call it by its name-the thing itself and its components, to which it will eventually return. Nothing is so conducive to spiritual growth as this capacity for logical and accurate analysis of everything that happens to us.

For more stoicism see the Ryan Holiday post.

In the interview James tells the Louis CK joke about seeing divorce accurately. It comes up at 5:20 in this clip. (NSFW)

Lesson 10: Match expectations to reality

Astro asks James if promising love forever was “a reasonable thing to promise.” Do, we as twenty, thirty, forty, fifty-somethings understand the concept of forever? Can we see the changes that will be coming as people lose or find jobs, begin or stop habits, have and raise kids? Probably not. I’ve only had kids for 6 years and it’s been a major change in almost every area of my life, how could I have guessed that?

Dan Savage has some of the best advice for getting our expectations to match reality.

When you think about it, you meet somebody for the first time, and they’re not presenting their warts-and-all self to you — they’re presenting their idealized self to you, they’re leading with their best. And then, eventually, you’re farting in front of each other. Eventually, you get to see the person who is behind that facade of their best, and they get to see the person your facade, your lie-self — this lie that you presented to them about who you really are. And what’s beautiful about a long-term relationship, and what can be transformative about it, is that I pretend every day that my boyfriend is the lie that I met when I first met him. And he does that same favor to me — he pretends that I’m that better person than I actually am. Even though he knows I’m not.

Those are 10 takeaways from the Tellers.

Let me know what you thought about this post on Twitter, @MikeDariano and use those handy-dandy share buttons below.

*A note about the Taleb section. I’m very new to thinking in this way, if you want to add any clarification please do.

Sam Shank (@SamShank) and James Altucher talk about startups, pivots, and what might happen if someone offered you $400 million for your business and Sam gives the best answer to that question I’ve ever heard. Sam is on the podcast to talk about Hotel Tonight, one of James’s favorite apps. HotelTonight is “Hand-selected hotels at great prices on your mobile device.” Sam wasn’t always in technology though.

He tells James that his secret origin story was in the film industry, where he worked with Wes Craven on the first Scream movie. If you’re under 25, you may not appreciate the Scream series in the canon of horror movies, but it was the franchise that bridged the Halloween series to the Saw style movies. One story from the set that Sam shares is when something happened with some footage that had to be reshot. Filming is resource intensive between the time and financial costs and a huge pain in the ass. It would have been easy for Craven to loose his head but he followed the same professional kindness that Carol Leifer talked about with James, saying, “don’t be a jerk.”

Sam could see that his upside in film was limited, only a handful of directors get to work on movies each year and there were people years ahead of Sam still doing the work he was. Sam switched to technology, working at Excite and CNET for about ten years. From the interview with James he sounded very focused when he decided to work there, saying, that he had to meet people and get experience before he could start his own company.

James asks about how he knew he was ready to start a company and Sam says, “You’re ready when it just feels uncomfortable enough that you can bear starting a company.” In a sense, Sam was ready to start failing in little ways to succeed in big ones. In her interview, Carol Leifer said, “you should be failing in your career because everybody fails and if you’re not failing then you’re not doing something right. Because it’s through these failures you really get better.” We need to see failures as opportunities for improvement and expect them to arise on our path. In their book about any kind of Switch, the Heath brothers write that we should expect failure; “The answer may sound strange: You need to create the expectation of failure—not the failure of the mission itself, but failure en route.”  Ryan Holiday might take the idea of failure one more step to say that failure isn’t bad, it’s good. Failure is an obstacles and obstacles show you the way. This is exactly what happened with Sam.

He launched Travel Post with “not a lot of downside.” Sam was applying what Nassim Taleb calls asymmetrical thinking. If nothing happened with TravelPost, Sam could go work for another technology company with almost no change in knowledge or income status. If, on the other hand, TravelPost succeeded wildly, then Sam had the upside of a hot startup. TravelPost was eventually sold to SideStep and after working there for 15 months, Sam started Dealbase.

These iterations – through different companies – led Sam to his current venture, HotelTonight. At this point in the interview I was stunned with what came next. I expected that someone who had a pair of startups in his toolbox, a Kellogg MBA, and two partners would have an efficient and scalable system right from the start. Nope.

Instead, Hotel Tonight started with 15 hotels in 3 cities. Sam and his co-founders called each hotel in the afternoon to see how many vacancies and at what price point the rooms could be listed at. There were no boardroom meetings with a Hilton, no elaborate databases. There were three people with a computer and a telephone.

It took two weeks of listing rooms before anyone booked a room and Sam says this lag time was to be expected. People wanted social proof or to see online reviews but the nature of Sam’s business meant it took time. You hear about a video online, you can watch the video. You hear about a hotel, that’s another matter. This timing, I publish something online I want immediate results is an internet fallacy. Even Ryan Holiday, marketing guru, needs time. His email list (which is wonderful) took years to build up. He writes, “Be ok mailing to very few people for a long time. I was. I knew that I had a long-term strategy. I also knew that recommending some life-changing books even to a small number of people was a beneficial activity in itself. Look at my chart–the size is basically unchanged for over a year.”

Sam tells James that the key to any consumer product is solving this equation:

“It boils down to saving time and saving money. I think all consumer products need to deliver on one, ideally both.”

The end of the interview has James and Sam spitballing ideas about other “tonight” services for food, cars, or other hospitality stuff. I do an idea list each day and it’s nice to hear James brainstorming because some of his ideas are as silly as mine.

At the end of the interview is the real gem of the conversation. James asks Sam if he would sell the company for $400 million dollars and Sam says, probably not.

We’ve got big goals for Hotel Tonight. It’s a wonderful platform, where we’ve got a great team, we’ve got lots of resources, wonderful investors. We’ve got great co-founders and we’ve got a really strong vision for where we want to take it. The other way I look at it, is if this all ended right now, what would I want to do personally? What I’d want to do personally is get back to where I am right now.

 

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Tucker Max (@TuckerMax) joined James Altucher to talk about his new company, Book in a Box, publishing, and solving problems.

 Tucker is the only guest to have a repeat chance to talk to James and it’s mostly about his new company, Book in a Box. The company’s tagline asks, want to write a book but don’t have the time? “The Book in a Box process is a new way to write a book. We take your ideas and your words, and turn them into a professionally published book, in under 12 hours of your own time.”

 There is a LinkedIn post where Tucker explains the model and process (and is similar to the content of his interview with James), but do be careful wading through the comments.

His idea for Book in a Box came from a LDV Entrepreneur dinner in NYC when Melissa Gonzalez approached Tucker about writing a book. After explaining to her that it’s a long and hard process to write a book, she called him to carpet and said, “in my job I solve problems. Can you solve my problem or not?”

(Eventually he did,The Pop Up Paradigm: How Brands Build Human Connections in a Digital Age)

Tucker has found what past guest Sam Shank says, is one of two things every consumer product should do; save someone time or money. Tucker is angling for saving successful people time, though toward the end of the podcast he shares how that may change.

Tucker explains that this system isn’t what someone like Neil Strauss does. For more about that, check out this interview Strauss had with Tim Ferriss to talk about writing and conversation.

The Book in a Box system begins with an outline that’s been formulated, refined, and distilled to the essence of what is needed. Tucker tells James, “the process has to be set before we can hire freelancers.” Then a freelancer comes in to have an eight hour conversation with the author, some transcription transpires, and an editorial polish cleans things up before a cover and marketing officially launch it. Tucker says that they have a team of freelancers that can turn an interview transcript into a book in a matter of days.

Throughout the interview Tucker repeatedly goes back to the idea of having good systems in place. It’s taken him and co-founder Zach Obront time to figure out what is necessary and what isn’t, but after finding these systems they can remove themselves from the process. James says he has a piece of paper taped to his computer that reminds him to take himself out of the equation.

Part of the way Tucker has succeed with this is by doing the work. He says that even now he’s applying the Book in a Box process to writing an actual book, this one about Book in a Box. He also introduces the analogy of using a lathe to make a lathe which should replace the eat your own dogfood mantra that exists.

 One specific example from the middle of their interview is what they found with the interview process. Rather than sticking a microphone (or phone) in front of someone, there are specific questions that are asked. Tucker learned how to identify overloaded specificity. He tells James that the interviews are trained to ask for specific examples if the interviewee is being too general, and to generalize if they are giving too many specific examples.

Despite even this refinement (and many others) there are still variations. For the different types of non-fiction books, Tucker says there are different types of outlines.

 “Our process is not for people who enjoy writing or are good at writing or like writing. It’s for people who have ideas that they want to turn into books, but don’t have the time or ability to sit through the writing process or deal with publishing process.”

 When talking about the actual publishing industry, Tucker doesn’t have great answers. He says that 40-70% of all books sales are through Amazon and that number is as high as 90% for certain genres. It turns out that there really aren’t great answers. One Wikipedia page suggests 300,000 for 2013.

 Besides Tucker’s company, there are people doing similar things online. Past guest, Steve Scott has dove, dug, and buried himself in the habit and productivity vein of Amazon. Tucker also says that he knows a guy doing content creation via books. That team will find a trend like paleo and pump out a number of high quality books. Then there is the James Frey, James Patterson stables of writers. In an interview with The Daily Beast, Patterson says that he writes an outline which the co-writer then contributes to. After that, the co-worker sends his work over every few weeks and Patterson decides, “This is terrific, I love the way it’s going,” or “We’ve come off the tracks somehow.”

 Tucker tells James that he can see this Book in a Box idea expanding to other areas like painting, film, and fiction. It reminded me of the Jimmy Whales interview where he hoped the same thing, only for crowd-sourcing. Both Jimmy and Tucker have the same idea, let wisdom chisel this thing into something great. For Jimmy it’s many people with little experience or time, for Tucker it’s few people with much experience and time.

 Both James and Tucker advice that it’s not great to be an employee any more. In Thou Shall Prosper, Rabbi Daniel Lapin put it this way. Always think of yourself as a freelancer, even to your current employer. If you think this way, you can see that you have one client, your employer, but you can always get more. In the realm of coding you see this all the time, people building side projects. Even something as simple as teaching means tutoring options are available too.

 Tucker says he completely forgot about this SNL sketch when naming his company and that if Amazon came along and offered him 80 million dollars he would take it. (Sam Shank probably wouldn’t.)

This is a test post to see if there is interest in the Ask Altucher posts. If you like this please let me know.

#166 Do You Believe in Intuition?

James is having a great time with his Airbnb rental in Miami when he compares human chess to computer chess and says that intuition is more like a subconscious compiling of our experience. In business James says “what makes or breaks you is the type of people you associate with.” With experience we start to find the good people and the not so good ones, but this isn’t easy. He references his interview with Peter Thiel and notes that the key to success is solving difficult problems.

After a meeting James will consider a worse-case scenario for each person he deals with. See also “pre-mortem.”

James suggests that we can develop our intuition by reading books, Claudia says that journaling has helped her. (Have you tried a decision journal?)

#167 How Long Should You Date Before Having Sex?

This question is from a woman who “needs to know soon.”

“Don’t be afraid to have three months of dating.” James and Claudia both suggest on focusing on the big stuff – one of which is sex but to remember it’s not the only thing.

#168 How Do You Get That Final 1% Finished?

James is moving to Florida and looking to hold meetups. The question about finishing comes from an engineer who gets 99% of a project done, but can’t seem to finish. What can he do?

James says he can “totally relate” and one way he finished a book was to hire an editor to do that last bit. Another tip is to clean up the whole area around you. A tip that happiness author Gretchen Rubin believes in too. Second, list what good your project will do. Third, imagine you’ve already accomplished the project and focus on how good that feels.

In this episode James shares his current reading list:

• By the Book.
• Poking a Dead Frog.
• Why Beautiful People Have More Daughters.
• The Warrior Ethos.
• Give and Take.
• How the Beatles Went Viral In ‘64.

#169 The Key to Success in Life

Claudia is cooking mashed cauliflower and James wonders what happens if they add avocado. Ugh.

James shares his key to success; “the key to success in life is what you do in the morning.” Forget about staying up late the night before because if you feel crappy the next morning, you’ll feel crappy all day. Altucher sets up his day the night before; limiting his screen time, eating right, and going to sleep early.

James takes a moment to be grateful and visualize what he wants to happen that day. A technique called priming that Tony Robbins said on the Bryan Koppelman podcast. He finds even the smallest things to be grateful for, something Dr. Wayne Dyer says we can all find just in being alive.

Claudia asks James about feeling guilty about eating when so many people don’t and he tells her that no he doesn’t because what would that solve. Scott Adams calls this the right selfishness, that by taking care of yourself first you can take care of others. Flight attendants call this, putting on your own mask first.

James said that everything he does is based on staying healthy, mediation, exercise, and reading.

After two hours, James will spend a few hours of writing (starting with his idea list). “Those moments from 5-10am that sets the day for success.”

For more morning rituals check out Daily Rituals.

#170 What’s The Best Way to Crowdfund?

Claudia shares a few crowdfunding things she’s followed and they call Clay Hebert about crowdfunding.

Clay says he sees a difference between artists and entrepreneurs where the latter feel odd about asking for money. Alex Blumberg said this idea is true for the public radio world too. It may be changing though. The Frontline documentary Generation Like shares that kids don’t know what the word “sell out” means and that the expectation is to sell out. Their idea is to build stuff for free and then get a sponsor or product to promote. They are comfortable with what Amanda Palmer calls The Art of Asking.

For crowdfunding, Clay has a few suggestions:

• Ask for as little money as you need. The Coolest Cooler failed when they asked for a lot, when they dropped their minimum though they became the biggest Kickstarter in history.
• The press needs a hook, crushing your goal becomes that hook.

• But that press needs to be focused and niche or big to act as a testimonial. (See his page above for an example)

• Nobody wants a digital high five, instead make a valuable first level reward.
• Tell a good story in a video; “address the problem you are solving in the first ten seconds.”
• Think about the first ten people that will buy your product. Also, read 1,000 True Fans.
• Market your product (get a landing page) before running crowdfunding.