How the World Sees You by Sally Hogshead

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How the World Sees You: Discover Your Highest Value Through the Science of Fascination by Sally Hogshead- “Hell is other people,” a French philosopher famously wrote. How the World Sees You challenges this long-standing maxim, exploring how your unique personality and the way people perceive you can be used to your own advantage. At the same time, the book also provides you with the tools necessary to better read those around you and make sure that social dynamics always work in your favor.

You Are Not So Smart by David McRaney

Categories Business, Personal growthPosted on

We have no clue why you act the way we do, choose the things we choose or think the thoughts we think

Our errors in thinking are caused by cognitive biases, heuristics, and logical fallacies

We can better deal with these biases once we understand them

The Five Big Ideas

  • We think we know how the world works, but we really don’t
  • We narratives to explain why we do what we do
  • Cognitive biases are predictable patterns of thought and behavior that lead us to draw incorrect conclusions
  • Heuristics are mental shortcuts we use to solve common problems
  • Logical fallacies are like maths problems involving language, in which you skip a stepor get turned around without realizing it

“There is a growing body of work coming out of psychology and cognitive science that says you have no clue why you act the way you do, choose the things you choose or think the thoughts you think.”

“From the greatest scientist to the most humble artisan, every brain within every body is infested with preconceived notions and patterns of thought that lead it astray without the brain knowing it.”

“You are naturally hindered into thinking in certain ways and not others, and the world around you is the product of dealing with these biases, not overcoming them.”

“Cognitive biases are predictable patterns of thought and behavior that lead you to draw incorrect conclusions.”

“Heuristics are mental shortcuts you use to solve common problems. They speed up processing in the brain, but sometimes make you think so fast you miss what is important.”

“Logical fallacies are like maths problems involving language, in which you skip a step or get turned around without realizing it … They are arguments in your mind where you reach a conclusion without all the facts because you don’t care to hear them or have no idea how limited your information is.”

“Logical fallacies can also be the result of wishful thinking.”

1. Priming

Priming is when a stimulus in the past affects the way you behave and think or the way you perceive another stimulus later on. (Sam: Dan Ariely discusses priming at length in his book, Predictably Irrational.)

“Priming works best when you are on autopilot when you aren’t trying to consciously introspect before choosing how to behave.”

“You can’t self-prime, not directly. Priming has to be unconscious; more specifically, it has to happen within what psychologists refer to as the adaptive unconscious—a place largely inaccessible.”

Often, we are unaware of how unaware we are.

“Priming works only if you aren’t aware of it, and those who depend on priming to put food on the table work very hard to keep their influence hidden.”

“You are most open to suggestion when your mental cruise control is on or when you find yourself in unfamiliar circumstances.”

2. Confabulation

Confabulation describes our tendency to ignore our motivations and create fictional narratives to explain our decisions, emotions, and history without realizing it. 

3. Confirmation Bias

“When the frequency illusion goes from a passive phenomenon to an active pursuit, that’s when you start to experience confirmation bias.”

Confirmation bias occurs when you perceive the world through a filter, thinking selectively.

Put simply, you want to be right about how you see the world, so you seek out information that confirms your beliefs and avoid contradictory evidence and opinions.

“People like to be told what they already know.”

4. Hindsight Bias

We often look back on the things we’ve just learned and assume we knew them or believed them all along. This is known as hindsight bias.

“You are always looking back at the person you used to be, always reconstructing the story of your life to better match the person you are today.”

“Hindsight bias is a close relative of the availability heuristic.”

“The availability heuristic shows you make decisions and think thoughts based on the information you have at hand while ignoring all the other information that might be out there.”

“You do the same thing with Hindsight Bias, by thinking thoughts and making decisions based on what you know now, not what you used to know.”

5. The Texas Sharpshooter Fallacy

“Picking out clusters of coincidence is a predictable malfunction of normal human logic.”

“If hindsight bias and confirmation bias had a baby, it would be the Texas sharpshooter fallacy.”

“Anywhere people are searching for meaning, you will see the Texas sharpshooter fallacy.”

“You commit the Texas sharpshooter fallacy when you need a pattern to provide meaning, to console you, to lay blame.”

6. Procrastination

“Procrastination is all about choosing want over should because you don’t have a plan for those times when you can expect to be tempted.”

“Faced with two possible rewards, you are more likely to take the one that you can enjoy now over one you will enjoy later—even if the later reward is far greater.”

“One of the best ways to see how bad you are at coping with procrastination is to notice how you deal with deadlines.”

“If you fail to believe you will procrastinate or become idealistic about how awesome you are at working hard and managing your time, you never develop a strategy for outmaneuvering your own weakness.”

“You must be adept at thinking about thinking to defeat yourself at procrastination.”

The trick to overcoming procrastination is to accept that the now-you will not be the person facing those choices, it will be the future-you—a person who can’t be trusted. Future-you will give in, and then you’ll go back to being now-you and feel weak and ashamed. Now-you must trick future-you into doing what is right for both parties.

7. Normalcy Bias

“No matter what you encounter in life, your first analysis of any situation is to see it in the context of what is normal for you and then compare and contrast the new information against what you know usually happens … Because of this, you have a tendency to interpret strange and alarming situations as if they were just part of business as usual.”

“In any perilous event, like a sinking ship or a towering inferno, a shooting rampage or a tornado, there is a chance you will become so overwhelmed by the perilous overflow of ambiguous information that you will do nothing at all.”

“Normalcy bias is stalling during a crisis and pretending everything will continue to be as fine and predictable as it was before.”

8. Introspection

The origin of certain emotional states is unavailable to you, and when pressed to explain them, you will just make something up. This is called the introspection illusion.

9. The Availability Heuristic

The availability heuristic describes our tendency to react more rapidly and to a greater degree when considering information you are familiar with.

“The old adage ‘I’ll believe it when I see it’ is the availability heuristic at work.”’

“It’s simply easier to believe something if you are presented with examples than it is to accept something presented in numbers or abstract facts.”

10. The Bystander Effect

The more people who witness a person in distress, the less likely it is that any one person will help. This is known as the bystander effect.

“Whether it is to donate blood, assist someone in changing a tire, drop money into a performer’s coffers, or stop a fight—people rush to help once they see another person leading by example.”

11. The Dunning-Kruger Effect

Here’s how McRaney describes the Dunning-Kruger Effect

The more skilled you are, the more practice you’ve put in, the more experience you have, the better you can compare yourself to others. As you strive to improve, you begin to better understand where you need work. You start to see the complexity and nuance; you discover masters of your craft and compare yourself to them and see where you are lacking. On the other hand, the less skilled you are, the less practice you’ve put in, and the fewer experiences you have, the worse you are at comparing yourself to others on certain tasks. Your peers don’t call you out because they know as little as you do, or they don’t want to hurt your feelings.

“If you want to be great at something, you have to practice, and then you have to sample the work of people who have been doing it for their whole lives.”

12. Apophenia

“Coincidences are a routine part of life, even the seemingly miraculous ones. Any meaning applied to them comes from your mind. This is known a apophenia.”

13. Brand Loyalty

“You prefer the things you own because you rationalize your past choices to protect your sense of self. This is called brand loyalty.”

14. The Argument from Authority

“When you see the opinions of some people as better than others on the merit of their status or training alone, you are arguing from authority.”

15. The Argument from Ignorance

The argument from ignorance is when you decide something is true or false because you can’t find evidence to the contrary.

“You don’t know what the truth is, so you assume any explanation is as good as another.”

16. The Straw Man Fallacy

“When you get into an argument about either something personal or something more public and abstract, you sometimes resort to constructing a character who you find easier to refute, argue, and disagree with, or you create a position the other person isn’t even suggesting or defending.”

“Any time someone begins an attack with ‘So you’re saying we should all just . . .’ or ‘Everyone knows . . . ,’ you can bet a straw man is coming.”

17. The Ad Hominem Fallacy

“When you assume someone is incorrect based on who that person is or what group he or she belongs to, you have committed the ad hominem fallacy.”

18. The Just-World Fallacy

“When you hear about a situation you hope never happens to you, you tend to blame the victim, not because you are a terrible person but because you want to believe you are smart enough to avoid the same fate.”

“It is common in fiction for the bad guys to lose and the good guys to win. This is how you would like to see the world—just and fair. In psychology, the tendency to believe that this is how the real world works is called the just-world fallacy.”

“You want the world to be fair, so you pretend it is.”

19. The Public Goods Game

“The public goods game suggests regulation through punishment discourages slackers.”

20. The Ultimatum Game

“When it comes to making a deal, you base your decision on your status.”

21. Subjective Validation

“You are prone to believing vague statements and predications are true, especially if they are positive and address you personally.”

“The tendency to believe vague statements designed to appeal to just about anyone is called the Forer effect, and psychologists point to this phenomenon to explain why people fall for pseudoscience like biorhythms, iridology, and phrenology, or mysticism like astrology, numerology, and tarot cards.”

The Forer effect is part of a larger phenomenon psychologists refer to as subjective validation, which is a fancy way of saying you are far more vulnerable to suggestion when the subject of the conversation is you.

22. Cult Indoctrination

“Cults are populated by people just like you.”

“The research on cults suggests you don’t usually join for any particular reason; you just sort of fall into them the way you fall into any social group.”

23. Groupthink

“The desire to reach consensus and avoid confrontation hinders progress.”

“For a group to make good decisions, they must allow dissent and convince everyone they are free to speak their mind without risk of punishment.”

“True groupthink depends on three conditions—a group of people who like one another, isolation, and a deadline for a crucial decision.”

“When groups get together to make a decision, an illusion of invulnerability can emerge in which everyone feels secure in the cohesion. You begin to rationalize other people’s ideas and don’t reconsider your own. You want to defend the group’s cohesion from all harm, so you suppress doubts, you don’t argue, you don’t offer alternatives—and since everyone is doing this, the leader of the group falsely assumes everyone is in agreement.”

24. Supernormal Releasers

A supernormal releaser is an exaggerated version of a stimulus to which there is an existing response tendency, or any stimulus that elicits a response more strongly than the stimulus for which it evolved.

25. The Affect Heuristic

“The tendency to make poor decisions and ignore odds in favor of your gut feelings is called the affect heuristic.”

“The affect heuristic is one way you rapidly come to a conclusion about new information.”

“When first impressions linger and influence how you feel about second, third, and fourth impressions, you are being befuddled by the affect heuristic.”

26. Dunbar’s Number

“You can maintain relationships and keep up with only around 150 people at once.”

27. Selling Out

“Both consumerism and capitalism are driven by competition among consumers for status.”

“Poor people compete with resources. The middle class competes with selection. The wealthy compete with possessions.”

28. Self-Serving Bias

“You excuse your failures and see yourself as more successful, more intelligent and more skilled than you are.”

“When things are going your way, you attribute everything to your amazing skills, but once the tide turns, you look for external factors that prevented your genius from shining through.”

“You don’t believe you are an average person, but you do believe everyone else is. This tendency, which springs from self-serving bias, is called the illusory superiority effect.”

29. The Spotlight Effect

“People devote little attention to you unless prompted to.”

30. The Third Person

“For every outlet of information, there are some who see it as dangerous not because it affects them, but because it might affect the thoughts and opinions of an imaginary third party. This sense of alarm about the impact of speech not on yourself but on others is called the third person effect.”

“The third person effect is a version of the self-serving bias. You excuse your failures and see yourself as more successful, more intelligent, and more skilled than you are.”

31. Catharsis

“Venting increases aggressive behavior over time”

“If you think catharsis is good, you are more likely to seek it out when you get pissed. When you vent, you stay angry and are more likely to keep doing aggressive things so you can keep venting.”

32. The Misinformation Effect

“Memories are constructed anew each time from whatever information is currently available, which makes them highly permeable to influencers from the present.”

33. Conformity

“It takes little more than an authority figure or social pressure to get you to obey, because conformity is a survival instinct.”

34. Extinction Burst

“Anytime you quit something cold turkey, your brain will make a last-ditch effort to return you to your habit.”

“Your brain didn’t evolve in an environment where there was an abundance of food, so whenever you find a high-calorie, high-fat, high-sodium source, your natural inclination is to eat a lot of it and then go back to it over and over again. If you take away a reward like that, your brain throws a tantrum.”

“There are two kinds of conditioning—classical and operant. In classical conditioning, something that normally doesn’t have any influence becomes a trigger for a response. Operant conditioning changes your desires. Your inclinations become greater through reinforcement, or diminish through punishment.”

“When you expect a reward or a punishment and nothing happens, your conditioned response starts to fade away.”

35. Social Loafing

“Once part of a group, you tend to put in less effort because you know your work will be pulled together with others’.”

36. The Illusion of Transparency

“You know what you are feeling and thinking, and you tend to believe those thoughts and emotions are leaking out of your pores, visible to the world, perceivable to the outside.”

“When your emotions take over, when your own mental state becomes the focus of your attention, your ability to gauge what other people are experiencing gets muted.”

37. Learned Helplessness

“If you feel like you aren’t in control of your destiny, you will give up and accept whatever situation you are in.”

“If, over the course of your life, you have experienced crushing defeat or pummeling abuse or loss of control, you convince yourself over time that there is no escape, and if escape is offered, you will not act—you become a nihilist who trusts futility above optimism.”

38. Embodied Cognition

“You translate your physical world into words, and then believe those words.”

39. The Anchoring Effect

“Your first perception lingers in your mind, affecting later perceptions and decisions.”

“You depend on anchoring every day to predict the outcome of events, to estimate how much time something will take or how much money something will cost. When you need to choose between options, or estimate a value, you need footing to stand on.”

40. Attention

“Psychologists call missing information in plain sight inattentional blindness.”

“Your attention is like a spotlight, and only the illuminated portions of the world appear in your perception.”

“Your perception is built out of what you attend to.”

“The problem with inattentional blindness is not that it happens so often, it’s that you don’t believe it happens.”

“The fraternal twin of inattentional blindness is change blindness. The brain can’t keep up with the total amount of information coming in from your eyes, and so your experience from moment to moment is edited for simplicity.”

“The more your attention is engaged, the less you expect something out of the ordinary and the less prone you are to see it even when lives could be at stake.”

41. Self-Handicapping

“You often creation conditions for failure ahead of time to protect your ego.”

“Self-handicapping is a reality negotiation, an unconscious manipulation, of both your perceptions and those of others, that you use to protect your ego.”

“Self-handicapping behaviors are investments in a future reality in which you can blame your failure on something other than your ability.”

“Men use self-handicapping more than women to assuage their fears of failure.”

“Whenever you venture into uncharted waters with failure as a distinct possibility, your anxiety will be lowered every time you see a new way to blame possible failure on forces beyond your control.”

42. Self-Fulfilling Prophecies

“Just believing a future event will happen can cause it to happen if the event depends on human behavior.”

“The future is the result of actions, and actions are the result of behavior, and behavior is the result of prediction. This is called the Thomas Theorem.”

“What was once false becomes true, and in hindsight it seems as if it always was.”

“When you fear you will confirm a negative stereotype, it can become a self-fulfilling prophecy not because the stereotype is true, but because you can’t stop worrying that you could become an example proving it.”

“If you want a better job, a better marriage, a better teacher, a better friend—you have to act as if the thing you want out of the other person is already headed your way.”

“A negative outlook will lead to negative predictions, and you will start to unconsciously manipulate your environment to deliver those predictions.”

43. The Moment

“You are multiple selves, and happiness depends on satisfying all of them”

44. Consistency Bias

“Unless you consciously keep tabs on your progress, you assume the way you feel now is the way you have always felt.”

“One of the stranger facets of consistency bias is how it can be evoked on the spot.”

“Consistency bias is part of your overall desire to reduce the discomfort of cognitive dissonance, the emotions you feel when noticing that you are of two minds on one issue.”

45. The Representativeness Heuristic

“You jump to conclusions based on how representative a person seems to be of a preconceived character type.”

“When it comes to strangers, your first instinct is to fit them into archetypes to quickly determine their value or threat.”

“The representativeness heuristic helps fuel several other cognitive missteps, like the conjunction fallacy.”

“The conjunction fallacy builds on your representativeness heuristic. The more things you hear about which match your mental models, the more likely they seem.”

“Representativeness heuristics are useful, but also dangerous. They can help you avoid danger and seek help, but they can also lead to generalizations and prejudices.”

46. Expectation

“Wine experts and consumers can be fooled by altering their expectations.”

47. The Illusion of Control

“You often believe you have control over outcomes that are either random or too complex to predict.”

48. The Fundamental Attribution Error

“Other people’s behavior is more the result of the situation than their disposition.”

“When you are at a restaurant, you have a hard time seeing through to the personality of the server. You place blame and assume you are dealing with a slacker. Sometimes you are right, but often you are committing the fundamental attribution error.”

“When you don’t know much about a person, when you haven’t had a chance to get to know him or her, you have a tendency to turn the person into a character. You lean on archetypes and stereotypes culled from experience and fantasy. Even though you know better, you still do it.”

“According to psychologist Harold Kelly, when you conjure an attribution for someone else’s actions, you consider consistency.”

“When you can’t check for consistency, you blame people’s behavior on their personality.”

“You commit the fundamental attribution error by believing other people’s actions burgeon from the sort of people they are and have nothing to do with the setting.”

“When you interpret your loved one’s coldness as his or her indifference to your wants and needs instead of as a reaction to stress at work or problems ricocheting in your loved one’s own heart, you’ve committed the fundamental attribution error.”

“The fundamental attribution error leads to labels and assumptions about who people are, but remember first impressions are mostly incorrect.”

Recommended Reading

If you like You Are Not So Smart, you may also enjoy the following books:

Contagious: Why Things Catch On by Jonah Berger

Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink

To Sell Is Human: The Surprising Truth About Persuading, Convincing, and Influencing Others by Daniel H Pink

Buy The Book: You Are Not So Smart

Print | Hardcover | Audiobook

Spark by Dr. Jeremy Dean

Categories Business, Personal growthPosted on

Thinking back to one single previous bout of exercise motivates people to raise their exercise levels in the future.

“One of the best ways of getting going is to set yourself some ‘If…then’’ statements.”

“People generate higher intrinsic motivation when they ask themselves questions.”

The Five Big Ideas

“Try to imagine some of the consequences of not trying hard to complete your project. How will you feel if you give up? What will it mean to other people? How much will you regret it in the future?”

“Psychologists have found that people will go to quite incredible lengths to protect their own self-esteem.”

“Identity changes are not just the result of increased motivation, they can also feed your motivation.”

“One important key to imagining your future self is to think of the process as a journey.”

“Monitoring progress consistently emerges from studies as key to making progress towards a goal.”

Spark Summary

Step 1. Identify your starting point

Step 2. Discover the change you want

Step 3. Identify powerful internal and external motivations

Step 4. Modelling

Step 5. Getting Started

Step 6. Self-affirmation

Step 7. The backup plan

Step 8. Engage other people (or not)

Step 9. Self-compassion

Step 10. A good mood

Step 11. Envy

Step 12. Fear

Step 13. Anger

Step 14. Avoid self-handicapping

Step 15. Finding your individual motivation

Step 16. Journey towards a new identity

Step 17. The review

One popular model of change used by psychologists has five different phrases:

Pre-contemplation. You are not even considering making any changes.

Contemplation. You are at least considering a change.

Determination. Your plans for action are coming along but you haven’t put them into action yet.

Action. You are already part way through making a change.

Maintenance. You are trying to make the change permanent.

Ask yourself: “What would be the advantages and disadvantages of making this change?”

At the heart of intrinsic motivation lie three factors, according to Professors Richard Ryan and Edward Deci, the theory’s authors:

Competence. We want to be good at something—but it needs to be something we find just hard enough. Things that are too easy don’t give us a sense of competence.

Autonomy. We want to be free and dislike being controlled. When people have some freedom—even within certain non-negotiable boundaries—they are more likely to thrive.

Relatedness. As social animals, we want to feel connected to other people.

“When we see someone take a particular series of action and achieve the desired goal, it gives us hope we can do the same.” (Matthew Syed also touches upon “motivation by association” in Bounce)

“Modeling can give us hope that we can learn, as long as we choose someone who is similar enough to ourselves.”

“Studies have shown that just thinking back to one single previous bout of exercise motivates people to raise their exercise levels in the future.”

“One of the best ways of getting going is to set yourself some ‘If…then’ statements.”

“Turning a self-affirmation into a question is better than simply using a statement, research reveals.” (This study is also referenced in To Sell Is Human by Dan H. Pink.)

“People generate higher intrinsic motivation when they ask themselves questions.” (See: “Quality Questions” in Awaken the Giant Within by Anthony Robbins.)

“Backup plans can actually help feed our motivation for our main plan.”

“What feeds our motivation is knowing that we have a good chance of achieving the goal.”

“Under experimental conditions, it is the people with backup plans that have more motivation for their task.”

“The experiments do reveal one twist in the tail, though. As people get close to their goal, creating backup plans starts to demotivate them.”

“One study of joining online social networks has even found that these can be beneficial in pumping up motivation ”

Here are three psychological strategies you might use to deal with despair:

Self-esteem boost. Think about positive aspects of the self to boost confidence.

Positive distraction. Think back to nice memories from the problem.

Self-compassion. Think about the self with kindness and compassion, seeing the period of low self-confidence in context, without evaluating or judging it.

People who practice self-compassion find it easier to:

See the possibilities for change

Increase the motivation to change

Take steps towards making a change

Compare themselves with those doing better, to help motivate their change

“When we are actually doing something we care a lot more about how it feels than when we are not doing it.”

“One of the most useful aspects of a positive mood is it tends to make us feel more confident in our own abilities.”

“There are at least two types of envy: malicious envy and benign envy.”

“When another’s success feels served to us, we tend to feel a benign envy: one that is not destructive.”

“What need cultivating is a kind of benign fear of what might happen if you fail to at least try and achieve your goal or complete your project.” (See: “Pain/Pleasure” in Awaken the Giant Within by Anthony Robbins)

“Try to imagine some of the consequences of not trying hard to complete your project. How will you feel if you give up? What will it mean to other people? How much will you regret it in the future?”

“Research has shown that anger can make us push on towards our goals in the face of problems and barriers.”

“Studies find that anger makes people more motivated for rewards.”

“Whatever the source of the anger, it needs to be channeled in a positive and constructive way.”

“Psychologists have found that people will go to quite incredible lengths to protect their own self-esteem.”

“The first step in avoiding self-handicapping is noticing and cutting out the most obvious self-defeating behaviors, like not trying very hard.”

Think of a setback that you’ve experienced and ask yourself these two questions:

Can I take responsibility for the setback (rather than blaming someone else)?

Can I accept a poor outcome for what it is rather than trying to rationalize it away? This may hurt now but will produce greater motivation to change in the future.

“It may not be until you make some progress towards your goal that your real motivations become clear.”

“If we make steady progress, then slowly, almost imperceptibly, our self-image starts to change.”

“Identity changes are not just the result of increased motivation, they can also feed your motivation.”

“Research suggests that thinking about who you want to be in the future can increase optimism and motivation.”

“One important key to imagining your future self is to think of the process as a journey.”

“Monitoring progress consistently emerges from studies as key to making progress towards a goal.”

Recommended Reading

If you like Spark, you may also like the following books:

Bounce: The Myth of Talent and the Power of Practice by Matthew Syed

Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink

To Sell Is Human: The Surprising Truth About Persuading, Convincing, and Influencing Others by Daniel H Pink

Buy The Book: Spark


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Beyond Basketball by Mike Krzyzewski

Categories Business, Personal growthPosted on

“You have to adapt what you do based on who you are”.

“In adverse circumstances, you must remind yourself that this day is not your last. You will get through it, but can you use it to get better?”

No matter how successful you believe yourself to be, you can never feel as if you’ve reached the absolute pinnacle.

The Five Big Ideas

“As a leader and a career-oriented individual, you must take care not to allow one aspect of your life to so consume you that you neglect the others”.

“When approaching new challenges, it is imperative that you have the support of those who love you most”.

“Always surround yourself with individuals who will help to enable your courage when it is lacking from within”.

“Define your own success and failure; only you know whether or not you have given it your all”.

“The persistent pursuit of excellence determines winners, not the score of the game”.

Beyond Basketball Summary

“You have to adapt what you do based on who you are”.

“Do you let it beat you or do you use it to make you better?”

“In adverse circumstances, you must remind yourself that this day is not your last. You will get through it, but can you use it to get better?”

“As a leader and a career-oriented individual, you must take care not to allow one aspect of your life to so consume you that you neglect the others”.

“One way to avoid getting into a rut is to ensure that you are not doing the same thing over and over each year”.

“When approaching new challenges, it is imperative that you have the support of those who love you most”.

“No matter how successful you believe yourself to be, you can never feel as if you’ve reached the absolute pinnacle. There are always new and wonderful challenges out there, and part of maintaining success is knowing when you need to accept them”.

“Communication must be taught and practiced in order to bring everyone together as one”.

“Always surround yourself with individuals who will help to enable your courage when it is lacking from within”.

“Courage is the capacity to confront what can be imagined”.

“Define your own success and failure; only you know whether or not you have given it your all”.

“The persistent pursuit of excellence determines winners, not the score of the game”.

“To be excellent, you must be yourself. Do the very best that you can do. In giving your best every day, improvement will come naturally. Giving your all makes you better; it’s that simple”.

“One of the biggest lessons I have learned in my life is that failure is a natural result of breaking out of your comfort zone”.

“At West Point, I learned to view each failure not as its own entity but as a stepping-stone on a path to something greater. It was never a destination, but I had to pass through failure to be successful at what I was attempting to do. In order to change what you believe to be your limits, you have to try new things or raise your old limits to a new level”.

“A person is never more comfortable than when they are with their family, which is why I try to create a family atmosphere with my team and encourage people in other businesses to do the same with their employees and organization”.

“In life, there are not many absolutes, but when you have a great friend, that is an absolute”.

“To help turn fundamentals into habit requires intensive, intelligent, and repetitive action”.

“I constantly remind myself of the most basic formula of teaching: you hear, you forget; you see, you remember; you do, you understand. And when you truly understand, that is when the basics become habitual”.

“If you want to strive for excellence, you must embrace continual work on fundamentals”.

“Having a positive influence on people, helping others: that’s winning. For someone to be a total human being, they must realize that something happened before them, something is happening now, and something will happen after they leave”.

“I always remind myself that you learn forever and from everyone”.

“In basketball and in life, I have always maintained the philosophy of “next play.” Essentially, what it means is that whatever you have just done is not nearly as important as what you are doing right now”.

“The “next play” philosophy emphasizes the fact that the most important play of the game or life moment on which you should always focus is the next one. It is not about the turnover I committed last time down the court, it’s not even about the three-pointer I hit to tie the game, it is about what’s next. To waste time lamenting a mistake or celebrating a success is distracting and can leave you and your team unprepared for what you are about to face. It robs you of the ability to do your best at that moment and to give your full concentration”.

“When you are passionate, you always have your destination in sight and you are not distracted by obstacles”.

“Sharing your passion with those who love you can provide you with the support you need to overcome obstacles along the way”.

“Ultimately, having pressure on you is a healthy thing. If you are never put in pressure situations, you are not testing your limits and you will never see how far you can go. You are just playing it safe”.

“Even when it feels like the pressure is on, never fear the result of your best effort”.

“Jimmy Valvano once told me, ‘A person does not become whole until he or she becomes a part of something bigger than himself or herself’.”

“If your standards are low, it is easy to meet those standards every single day, every single year. But if your standard is to be the best, there will be days when you fall short of that goal. It is okay to not win every game. The only problem would be if you allow a loss or a failure to change your standards. Keep your standards intact, keep the bar set high, and continue to try your very best every day to meet those standards. If you do that, you can always be proud of the work that you do”.

Buy The Book: Beyond Basketball

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Don’t Give Up, Don’t Give In by Louis Zamperini

Categories Business, Personal growthPosted on

Forgive people who have hurt or upset you.

Acceptance leads to contentment.

Admit when you’re wrong.

The Five Big Ideas

“If you hate somebody you’re not hurting the person you hate, you’re hurting yourself. Forgiveness is healing”.

“We all need a code of ethics to guide us, especially in tough times when everyone has to do their part for the greater good, for the family or the group to survive”.

“Rather than try to take on the whole predicament at once, I broke it down to smaller tasks that used the various survival skills I’d already learned: first aid, obtaining food, knowing not to drink salt water, maintaining a positive attitude, and keeping my mind active. I followed my training, a step at a time. I didn’t freak out”.

“You must have hope. It rejuvenates your whole being. You can’t allow negative thinking – even if you know your chances are slim. I’m not saying that it’s easy to do, but the ability to envision the road to successful completion is what keeps you alive”.

“Acceptance creates cheerfulness, which in turn creates contentment”.

Don’t Give Up, Don’t Give In Summary

“The hardest thing in life is to forgive. But hate is self-destructive. If you hate somebody you’re not hurting the person you hate, you’re hurting yourself. Forgiveness is healing”.

“We all need a code of ethics to guide us, especially in tough times when everyone has to do their part for the greater good, for the family or the group to survive”.

“I didn’t know it then, but my persistence, perseverance, and unwillingness to accept defeat when things looked all but hopeless were part of the very character traits I would need to make it through World War II alive”.

“Rather than try to take on the whole predicament at once, I broke it down to smaller tasks that used the various survival skills I’d already learned: first aid, obtaining food, knowing not to drink salt water, maintaining a positive attitude, and keeping my mind active. I followed my training, a step at a time. I didn’t freak out”.

“During the two-plus years I lived in Japanese prisoner-of-war camps, I noticed that the soldiers who suffered the most were the ones who wouldn’t accept their situations”.

“I decided to consider my incarceration as a challenge – like winning a race”.

“If you cling to the axe you’re grinding, eventually you’ll only hurt yourself”.

“You must have hope. It rejuvenates your whole being. You can’t allow negative thinking – even if you know your chances are slim. I’m not saying that it’s easy to do, but the ability to envision the road to successful completion is what keeps you alive”.

“When the Apostle Paul was imprisoned, he said, ‘Whatever situation I find myself in, I have learned thereby to be content’.”

“Acceptance creates cheerfulness, which in turn creates contentment”.

“Don’t leave the crucial details to someone you don’t know – especially when your life may depend on it”.

“Sometimes what we see as a loss turns out in the end to be a gain, and sometimes a gain is a loss. I try not to be too swift to pass judgment on any situation, preferring instead to be patient and take the long view because I believe that in the end all things work together for good”.

“It will be tough to amount to anything unless you commit to your goal and stay the course. You can’t give in to doubt. You can’t give in to pain”.

“Never give up. If you want to be a champion you have to go after what you want tooth and nail”.

“It’s a great responsibility, and a rough game. When times are tough you have to keep the parties from jumping on each other”.

“When you’re wrong, admit it. When you’re right, keep your mouth shut”.

Buy The Book: Don’t Give Up, Don’t Give In

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Triggers by Marshall Goldsmith: Summary

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“A trigger is any stimulus that reshapes our thoughts and actions”.

“We don’t know how to execute a change. There’s a difference between motivation and understanding and ability”.

“Most of us go through life unaware of how our environment shapes our behavior”.

The Five Big Ideas

“If we do not create and control our environment, our environment creates and controls us”.

“Feedback—both the act of giving it and taking it—is our first step in becoming smarter, more mindful about the connection between our environment and our behavior”.

“A feedback loop comprises four stages: evidence, relevance, consequence, and action”.

“The [Daily Questions] announce our intention to do something and, at the risk of private disappointment or public humiliation, they commit us to doing it”.

“Self-discipline refers to achieving desirable behavior. Self-control refers to avoiding undesirable behavior”.

Triggers Summary

“A trigger is any stimulus that reshapes our thoughts and actions”.

“Fate is the hand of cards we’ve been dealt. Choice is how we play the hand”.

“We can’t admit that we need to change—either because we’re unaware that a change is desirable, or more likely, we’re aware but have reasoned our way into elaborate excuses that deny our need for change”.

“We do not appreciate inertia’s power over us”.

“Inertia is the reason we never start the process of change. It takes extraordinary effort to stop doing something in our comfort zone (because it’s painless or familiar or mildly pleasurable) in order to start something difficult that will be good for us in the long run”.

“We don’t know how to execute a change. There’s a difference between motivation and understanding and ability”.

“If you want to be a better partner at home or a better manager at work, you not only have to change your ways, you have to get some buy-in from your partner or co-workers. Everyone around you has to recognize that you’re changing. Relying on other people increases the degree of difficulty exponentially”.

“What makes positive, lasting behavioral change so challenging—and causes most of us to give up early in the game—is that we have to do it in our imperfect world, full of triggers that may pull and push us off course”.

“Our inner beliefs trigger failure before it happens. They sabotage lasting change by canceling its possibilty. We employ these beliefs as articles of faith to justify our inaction and then wish away the result. I call them belief triggers”.

Belief Triggers:

If I understand, I will do. Just because people understand what to do doesn’t ensure that they will actually do it.

I have willpower and won’t give in to temptation. We not only overestimate willpower, we chronically underestimate the power of triggers in our environment that lead us astray.

Today is a special day. If we really want to change we have to make peace with the fact that we cannot self-exempt every time the calendar offers us a more attractive alternative to our usual day.

“At least I’m better than …” We award oursevles a free pass because we’re not the worst in the world.

I shouldn’t need help and structure. One of our most dysfunctional beliefs is our contempt for simplicity and structure. This is a natural response that combines three competing impulses: 1) our contempt for simplicity (only complexity is worthy of our attention); 2) our contempt for instruction and follow-up; and 3) our faith, however unfounded, that we can succeed all by ourselves. When we presume that we are better than people who need structure and guidance, we lack one of the most crucial ingredients for change: humility.

I won’t get tired and my enthusiasm will not fade. When we plan to achieve our goals, we believe that our energy will not flag and that we will never lose our enthusiasm for the process of change.

I have all the time in the world. Here are two opposing beliefs that we simultaneously hold in our minds and mash into one warped view of time: 1) we chronically underestimate the time it takes to get anything done; 2) we believe that time is open-ended and sufficiently spacious for us to get to all ourself-improvement goals eventually.

I won’t get distracted and nothing unexpected will occur. When we make plans for the future, we seldom plan on distractions.

An epiphany will suddenly change my life. An epiphany implies that change can arise out of a sudden burst of insight and willpower.

My change will be permanent and I will never have to worry again. If we don’t follow up, our positive change doesn’t last.

My elimination of old problems will not bring on new problems. We forget that as we usher an old problem out the door a new problem usually enters.

My efforts will be fairly rewarded. Getting better is its own reward. If we do that, we can never feel cheated.

No one is paying attention to me. People always notice.

If I change I am “inauthentic.” We can change not only our behavior but how we define ourselves. When we put ourselves in a box marked “That’s not me,” we ensure that we’ll never get out of it.

I have the wisdom to assess my own behavior. We are notoriously inaccurate at assessing ourselves.

“Most of us go through life unaware of how our environment shapes our behavior”.

“Our environment is a nonstop triggering mechanism whose impact on our behavior is too significant to be ignored”.

“The most pernicious environments are the ones that compel us to compromise our sense of right and wrong”.

“Some environments are designed precisely to lure us into acting against our interest”.

“If we do not create and control our environment, our environment creates and controls us”.

“Feedback—both the act of giving it and taking it—is our first step in becoming smarter, more mindful about the connection between our environment and our behavior”.

“A feedback loop comprises four stages: evidence, relevance, consequence, and action”.

“As a trigger, our environment has the potential to resemble a feedback loop”.

“Where a well-designed feedback loop triggers desirable behavior, our environment often triggers bad behavior, and it does so against our will and better judgment and without our awareness”.

“A behavioral trigger is any stimulus that impacts our behavior”.

“A behavioral trigger can be direct or indirect and internal or external”.

“Direct triggers are stimuli that immediately and obviously impact behavior, with no intermediate steps between the triggering event and your response. Indirect triggers take a more circuitous route before influencing behavior”.

“External triggers come from the environment. Internal triggers come from thoughts or feelings that are not connected with any outside stimulus”.

“A trigger can be conscious or unconscious”.

“Conscious triggers require awareness. Unconscious triggers shape your behavior beyond your awareness”.

“A trigger can be anticipated or unexpected”.

“A trigger can be encouraging or discouraging”.

“Encouraging triggers push us to maintain or expand what we are doing. Discouraging triggers push us to stop or reduce what we are doing”.

“A trigger can be productive or counterproductive”.

“Triggers are not inherently ‘good’ or ‘bad’. What matters is our response to them”.

“We are superior planners and inferior doers”.

“Forecasting is what we must do after acknowledging the environment’s power over us. It comprises three interconnected stages: anticipation, avoidance, and adjustment”.

“When our performance has clear and immediate consequences, we rise to the occasion.We create our environment. We don’t let it re-create us”.

“When we’re not anticipating the environment, anything can happen”.

“To avoid undesirable behavior, avoid the environments where it is most likely to occur”.

“Adjustment happens when we’re desperate to change, or have an unexpected insight, or are shown the way by another person (such as a friend or coach)”.

“Good things happen when we ask ourselves what we need to create, preserve, eliminate, and accept—a test I suspect few of us ever self-administer”.

“This ‘active’ process will help anyone get better at almost anything. It only takes a couple of minutes a day. But be warned: it is tough to face the reality of our own behavior—and our own level of effort—every day”.

“Daily Questions are what behavioral economists refer to as a ‘commitment device’”.

“The[Daily Questions] announce our intention to do something and, at the risk of private disappointment or public humiliation, they commit us to doing it”.

“DailyQuestions are serious, too, if only in how they press us to articulate what we really want to change in our lives”.

“Daily Questions focus us on where we need help, not where we’re doing just fine”.

“Self-discipline refers to achieving desirable behavior. Self-control refers to avoiding undesirable behavior”.

“DailyQuestions, by definition, compel us to take things one day at a time. In doing so they shrink our objectives into manageable twenty-four-hour increments”.

“By focusing on effort, they distract us from our obsession with results (because that’s not what we’re measuring). In turn, we are free to appreciate the process of change and our role in making it happen. We’re no longer frustrated by the languid pace of visible progress—because we’re looking in another direction”.

“DailyQuestions remind us that: Change doesn’t happen overnight. Success is the sum of small efforts repeated day in and day out. If we make the effort, we will get better. If we don’t, we won’t”.

“We do not get better without structure”.

“Structure not only increases our chance of success, it makes us more efficient at it”.

“We need help when we’re least likely to get it”.

Recommended Reading

If you like Triggers, you may also like the following books:

Ego Is the Enemy by Ryan Holiday

Mindset: The New Psychology of Success by Carol Dweck

SmarterFaster Better: The Secrets of Being Productive in Life and Business by Charles Duhigg

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This Is Where to Start by Edward Druce: Notes

Categories Business, Personal growthPosted on

No one wants to be your mentor”.

“Stop looking for something you love and instead follow something you’re curious about”.

Ask yourself: “How can I make this person more successful at what they do?”

The Five Big Ideas

“No one wants to be your mentor”.

“One must face the reality that attracting a mentor is a long and patient process, but it’s imperative to develop skills and a reputation to create such an opportunity”.

“Stop looking for something you love and instead follow something you’re curious about”.

“A key mindset you need to take on is that you are filling a very real void. Your mindset needs to be that you are adding to the party”.

Ask yourself: “How can I make this person more successful at what they do?”

This Is Where to Start Summary

“No one wants to be your mentor”.

“As a general rule, the word ‘mentor’ is to be left alone, and only used in retrospect when you need a convenient label to sum up the relationship you had”.

Three Things to Look for in a Mentor:

They know how to make money (and show signs of being profitable).

They have demonstrated ambition to grow.

There’s potential for in person work.

“One must face the reality that attracting a mentor is a long and patient process, but it’s imperative to develop skills and a reputation to create such an opportunity”.

“Stop looking for something you love and instead follow something you’re curious about”.

“A key mindset you need to take on is that you are filling a very real void. Your mindset needs to be that you are adding to the party”.

Three Things You Need to Be Ready:

Develop and market hard skills. One way to distinguish yourself to a potential business mentor is to develop skills that will be valuable to their company.

Read everything the person you’re contacting has ever written. Watch every video. Listen to every interview. Study every page of their website.

Get inside their head. Regardless of the area you’re looking to help someone in, you must understand their core motivation, as well as the structure of their overall business. What’s getting them out of bed in the morning?

10 Questions to Ask Yourself:

Why did he/she start whatever it is they’re doing?

What are the main benefits their followers/clients/customers receive from what they do?

What are their followers’/clients’/customers’ biggest problems?

What is/are the biggest frustration(s) of the person you’re contacting in having to provide a solution to this?

How can you help them? Where is your proof?

What specifically can you help them with? What can you not help them with?

What tasty tips/information can you give right away?

Why wouldn’t they want you to work for them? What objections might they give?

What is ‘the dream’ for them in what they’re working towards?

Lastly, what is the nightmare?

“Your aim when meeting a mentor isn’t to pitch them from out of nowhere. It’s to build an initial level of familiarity and, if possible, to get to know a member of their team or entourage”.

“When you meet them, try to stand out and distinguish yourself. A safe option would be to get a small gift like a book. I’m talking about an empathetically though-out gift that will help them with a specific problem or issue”.

“If at all possible, when you go along to meet someone, if they have people with them – friends, co-workers or family – try and get to know one or two of these people as well”.

“As soon as you’ve met someone, follow up right away with a thank you email. The aim here is simply to open a dialogue you can return to”.

“If the interaction itself wasn’t enough to justify such a message, reference how their work has helped you, and how great it was to meet them and shake their hand. Be specific in referencing their work, subtly alluding to something that shows you’ve followed what they do for a long time”.

“Ask for NOTHING in this email”.

“You want to ensure your message has gotten through, which you can do using an email tracking service like SideKick”.

“A short thank-you note and some courtesy can go a long way”.

“An email allows you to demonstrate your talents and expertise, as well as your intimate understanding of their business (which can be hard to do in person without looking like a deranged stalker)”.

Ask yourself: “How can I make this person more successful at what they do?”

Dream-Problem-Solution: “What is their dream? What is a problem they currently have in their business? How can you position yourself as the solution?”

“Add a single line to the top of the message that states your intent. This gives context to the rest of the message, and having a single sentence at the top will make the whole meal more digestible”.

“Make your offer as low investment as you can. Anticipate objections that might arise and disarm them upfront”.

“Give away a tasty tip that will help them right away”.

How to Write an Email to a Prospective Mentor:

Line of Intent




Overcome Obstacles


[Your Name]

P.S. Bonus

“You’ll be excited once you’ve written it, but rather than rushing to hit ‘Send’, I’d encourage you to sleep on it”.

“The very next day, take a look at what you’ve written and read it back as if you were the person you’re contacting”.

“Once you’ve spent some time touching it up, put it away for another night to sleep on”.

“Get feedback on your message from some people around you. Ask two or more smart, trustworthy people to read over the email for general feedback, and, once incorporated, ask one additional person to proof-read the final version for mistakes”.

The Big Mistakes People Make:

Spelling and grammatical mistakes.

Using the word “Mentor”.

Using words like “Lol”, “Hahaha” or anything else that would suggest this is a text message to your best friend.

Writing too much.

Attaching your resume.

Using an uncommon font.

Having “Sent from my iPad” or “Sent from my iPhone”.

Including anything that might suggest at some point down the line you will be their direct competition in business.

“As soon as you’ve sent off your first email, begin working on your next”.

“Don’t assume just because someone hasn’t gotten back to you it means they’re not interested”.

“A short one or two line follow up can work in your favour, but always write back as a response to the first message you’ve sent so that it appears in the same thread of their inbox”.

“If they have a blog, leave a comment on their latest post. Retweet them. ‘Like’ their latest Facebook post. But be aware of overdoing it”.

“Do no keep persisting or try to argue your way into a position if you get a ‘no’. Thank them for taking the time to respond. If they’ve said ‘no’ because it’s not a good time, ask if they’d be okay for you to follow up in 3-6 months to see if anything has changed or opened up”.

Buy The Book: This Is Where to Start


The Power of Moments by Chip & Dan Heath: Summary

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The Book in Three Sentences

Defining moments shape our lives.

We don’t have to wait to make them happen.

We can create them.

The Five Big Ideas

When we recall an experience, we tend to remember flagship moments: the peaks, the pits, and the transitions.

A defining moment is a short experience that is both memorable and meaningful.

Defining moments are created from one or more of the following elements: (1) Elevation; (2) Insight; (3) Pride; (4) Connection.

If you’re struggling to make a transition, create a defining moment that draws a dividing line between Old You and New You.

Transitions should be marked, milestones commemorated, and pits filled.

The Power of Moments Summary

Chapter 1: Defining Moments

The Power of Moments is about why certain brief experiences can jolt us and elevate us and change us—and how we can learn to create such extraordinary moments in our life and work.

Research has found that in recalling an experience, we ignore most of what happened and focus instead on a few particular moments.

When people assess an experience, they tend to forget or ignore its length—a phenomenon called “duration neglect.” Instead, they seem to rate the experience based on two key moments: (1) the best or worst moment, known as the “peak”; and (2) the ending. Psychologists call it the “peak-end rule.”

What’s indisputable is that when we assess our experiences, we don’t average our minute-by-minute sensations. Rather, we tend to remember flagship moments: the peaks, the pits, and the transitions.

The surprise about great service experiences is that they are mostly forgettable and occasionally remarkable.

Some moments are vastly more meaningful than others.

A defining moment is a short experience that is both memorable and meaningful.

In their research, Chip & Dan Heath have found that defining moments are created from one or more of the following four elements:

Elevation. (1) Boost sensory appeal; (2) Raise the stakes; (3) Break the script

Insight. (1) Trip over the truth; (2) Stretch for insight

Pride. (1) Recognize others; (2) Multiply milestones; (3) Practice courage)

Connection. (1) Create shared meaning; (2) Deepen ties; (3) Make moments matter

Defining moments possess at least one of the four elements above, but they need not have all four.

Some powerful defining moments contain all four elements.

Chapter 2: Thinking in Moments            

If you’re struggling to make a transition, create a defining moment that draws a dividing line between Old You and New You.               

Pits are the opposite of peaks. They are negative defining moments—moments of hardship or pain or anxiety.               

Transitions should be marked, milestones commemorated, and pits filled.               

Three situations constitute natural defining moments and deserve our attention: (1) transitions; (2) milestones; and (3) pits.              

Chapter 3: Build Peaks               

In many customer relationships, the moments most likely to be remembered are pits.               

“Mostly forgettable” is actually a desirable state in many businesses. It means nothing went wrong. You got what you expected.               

When creating a memorable customer experience, you first need to fill the pits. That, in turn, frees you up to focus on the second stage: creating the moments that will make the experience “occasionally remarkable.”               

Fill pits, then build peaks.

Many business leaders never pivot to that second stage. Instead, having filled the pits in their service, they scramble to pave the potholes—the minor problems and annoyances. It’s as though the leaders aspire to create a complaint-free service rather than an extraordinary one.               

Research suggests that when customers contact you because they’ve had problems with your product or service, you should focus on defense—that is, you should focus on efficiency and not try to “delight” them.

In customer service, you’ll earn about 9 times more revenue if you elevate the positives (e.g. move a customer’s rating from a 4 to a 5), that you will eliminate the negatives (e.g. move a customer’s rating from a 3 to a 4).

To create fans, you need the remarkable, and that requires peaks. Peaks don’t emerge naturally. They must be built.               

To elevate a moment, do three things: First, boost sensory appeal. Second, raise the stakes. Third, break the script. (Breaking the script means to violate expectations about an experience) Moments of elevation need not have all three elements but most have at least two.

Boosting sensory appeal is about “turning up the volume” on reality.

To raise the stakes is to add an element of productive pressure: a competition, a game, a performance, a deadline, a public commitment.

One simple diagnostic to gauge whether you’ve transcended the ordinary is if people feel the need to pull out their cameras.               

Our instinct to capture a moment says: I want to remember this. That’s a moment of elevation.               

Beware the soul-sucking force of “reasonableness.” Otherwise, you risk deflating your peaks.               

Chapter 4: Break the Script

To break the script is to defy people’s expectations of how an experience will unfold.

The other difference between “breaking the script” and generic surprise is that the former forces us to think about the script.

To break the script, we’ve first got to understand the script.               

A study of hotel reviews on TripAdvisor found that, when guests reported experiencing a “delightful surprise,” an astonishing 94% of them expressed an unconditional willingness to recommend the hotel, compared with only 60% of guests who were “very satisfied.”

How do you break the script consistently enough that it matters—but not so consistently that customers adapt to it? One solution is to introduce a bit of randomness.               

Pret A Manger employees are allowed to give away a certain number of hot drinks and food items every week.               

When loyal customers were on a flight with a funny flight safety announcement, they flew one half-flight more over the next year than did similar customers who hadn’t heard one.               

The analytics group calculated that if Southwest could double the number of customers hearing a funny flight safety announcement, the result would be more than $140 million in revenue. That’s more than the cost of two 737s.               

Executives who are leading change should be deliberate about creating peaks that demarcate the shift from the “old way” to the “new way.”

If you ask older people about their most vivid memories, research shows, they tend to be drawn disproportionately from this same period, roughly ages 15 to 30. Psychologists call this phenomenon the “reminiscence bump.”               

For those anxious about facing a future that’s less memorable than the past, Chip and Dan’s advice is to honor the old saw, “Variety is the spice of life.” But notice that it does not say, “Variety is the entrée of life.”               

Learn to recognize your own scripts. Play with them, poke at them, disrupt them.

Moments of elevation are experiences that rise above the routine. They make us feel engaged, joyful, amazed, motivated.

Chapter 5: Trip Over the Truth

When you have a sudden realization, one that you didn’t see coming, and one that you know viscerally is right, you’ve tripped over the truth. It’s a defining moment that in an instant can change the way you see the world.               

The “aha!” moment should always happen in the minds of the audience.               

This three-part recipe—a (1) clear insight (2) compressed in time and (3) discovered by the audience itself—provides a blueprint for us when we want people to confront uncomfortable truths.               

You can’t appreciate the solution until you appreciate the problem. So when Chip and Dan write about “tripping over the truth,” they mean the truth about a problem or harm. That’s what sparks sudden insight.               

Chapter 6: Stretch for Insight               

Research suggests that reflecting or ruminating on our thoughts and feelings is an ineffective way to achieve true understanding. Studying our own behavior is more fruitful.               

Action leads to insight more often than insight leads to action.

Barbara Fredrickson, one of the researchers who pioneered the “peak-end principle,” argued that the reason we overweight peaks in memory is that they serve as a kind of psychic price tag. They tell us, in essence, this is what it could cost you to endure that experience again.               

When students get their paperback, full of corrections and suggestions, their natural reaction might be defensiveness or even mistrust. The teacher has never liked me. But the wise criticism note carries a different message. It says, I know you’re capable of great things if you’ll just put in the work. The marked-up essay is not a personal judgment. It’s a push to stretch.

Mentorship in two sentences: “I have high expectations for you and I know you can meet them. So try this new challenge and if you fail, I’ll help you recover.”                

A mentor’s push leads to a stretch, which creates a moment of self-insight.               

Moments of insight deliver realizations and transformations. They need not be serendipitous. To deliver moments of insight for others, we can lead them to “trip over the truth,” which means sparking a realization that packs an emotional wallop.               

To produce moments of self-insight, we need to stretch: placing ourselves in new situations that expose us to the risk of failure.

Mentors can help us stretch further than we thought we could, and in the process, they can spark defining moments.               

The formula for mentorship that leads to self-insight: High standards + assurance + direction + support.               

Expecting our mentees to stretch requires us to overcome our natural instinct to protect the people we care about from risk. To insulate them.               

The promise of stretching is not success, it’s learning.               

Moments of elevation lift us above the everyday. Moments of insight spark discoveries about our world and ourselves. Moments of pride capture us at our best—showing courage, earning recognition, conquering challenges.    

Chapter 7: Recognize Others      

Of all the ways we can create moments of pride for others, the simplest is to offer them recognition.

Across the studies, which spanned 46 years, only one factor was cited every time as among the top two motivators: “full appreciation of work done.”         

Most recognition should be personal, not programmatic.               

A classic paper on recognition by Fred Luthans and Alexander D. Stajkovic emphasizes that effective recognition makes the employee feel noticed for what they’ve done. Managers are saying, “I saw what you did and I appreciate it.”               

In 2014, DonorsChoose analyzed historical data and discovered that donors who opt to receive thank-you letters will make larger donations the next year. The letters build commitment.

Researchers have found that if you practice gratitude, you feel a rush of happiness afterward—in fact, it’s one of the most pronounced spikes that have been found in any positive psychology intervention. Better yet, researchers say, this feeling lasts.

Chapter 8: Multiply Milestones             

To identify milestones, ask yourself: What’s inherently motivating? What would be worth celebrating that might only take a few weeks or months of work? What’s a hidden accomplishment that is worth surfacing and celebrating?

Hitting a milestone sparks pride. It should also spark a celebration—a moment of elevation. (Don’t forget that milestones, along with pits and transitions, are three natural defining moments that deserve extra attention.) Milestones deserve peaks.               

The desire to hit milestones elicits a concerted final push of effort.

What milestones do is compel us to make that push, because (a) they’re within our grasp, and (b) we’ve chosen them precisely because they’re worth reaching for.               

We’re not stuck with just one finish line. By multiplying milestones, we transform a long, amorphous race into one with many intermediate “finish lines.” As we push through each one, we experience a burst of pride as well as a jolt of energy to charge toward the next one.                

Chapter 9: Practice Courage               

Managing fear—the goal of exposure therapy—is a critical part of courage.               

The psychologist Peter Gollwitzer has studied the way this preloading affects our behavior. His research shows that when people make advance mental commitments—if X happens, then I will do Y—they are substantially more likely to act in support of their goals than people who lack those mental plans.

It is hard to be courageous, but it’s easier when you’ve practiced, and when you stand up, others will join you.               

Moments of pride commemorate people’s achievements. We feel our chest puff out and our chin lift.               

There are three practical principles we can use to create more moments of pride: (1) Recognize others; (2) Multiply meaningful milestones; (3) Practice courage. The first principle creates defining moments for others; the latter two allow us to create defining moments for ourselves.               

We dramatically underinvest in recognition. Carolyn Wiley found that 80% of supervisors say they frequently express appreciation, while less than 20% of employees agree.              

Recognition is characterized by a disjunction: A small investment of effort yields a huge reward for the recipient.               

To create moments of pride for ourselves, we should multiply meaningful milestones—reframing a long journey so that it features many “finish lines.”

We can surface milestones that otherwise go unnoticed.               

Number-heavy organizational goals are fine as tools of accountability, but smart leaders surface more motivational milestones en route to the target.  

Moments, when we display courage, make us proud. We never know when courage will be demanded, but we can practice to ensure we’re ready.

Practicing courage lets us “preload” our responses.               

Courage is contagious; our moments of action can be a defining moment for others.

Chapter 10: Create Shared Meaning

For groups, defining moments arise when we create shared meaning—highlighting the mission that binds us together and supersedes our differences. We are made to feel united.               

Researcher Robert Provine found that laughter was 30 times more common in social settings than private ones.               

If you want to be part of a group that bonds like cement, take on a really demanding task that’s deeply meaningful. All of you will remember it for the rest of your lives.

To create moments of connection, we can bring people together for a synchronizing moment. We can invite them to share in a purposeful struggle. The final strategy centers on connecting them to a larger sense of meaning.               

Purpose is defined as the sense that you are contributing to others, that your work has broader meaning. Passion is the feeling of excitement or enthusiasm you have for your work.            

People who were passionate about their jobs—who expressed high levels of excitement about their work—were still poor performers if they lacked a sense of purpose.               

When it comes to performance, purpose trumps passion.               

Yale professor Amy Wrzesniewski believes that purpose isn’t discovered, it’s cultivated.

On one study by Adam Grant of Wharton, lifeguards voluntarily signed up for 43% more hours of work after reading four stories about other lifeguards rescuing drowning swimmers. The stories had increased their interest in the work.               

When radiologists were shown photos of the patients whose X-rays they were scanning, they increased both the raw number and the accuracy of their scans. When nurses, assembling surgical kits, met a caregiver who would use the kits, they worked 64% longer than a control group and made 15% fewer errors. Connecting to meaning matters.

Sometimes it’s useful to keep asking, “Why?” Why do you do what you do? It might take several “Whys” to reach the meaning. You know you’re finished when you reach the contribution.

When you understand the ultimate contribution you’re making, it allows you to transcend the task list.

Chapter 11: Deepen Ties               

Our relationships are stronger when we perceive that our partners are responsive to us.               

Responsiveness encompasses three things:

Understanding: My partner knows how I see myself and what is important to me.

Validation: My partner respects who I am and what I want.

Caring: My partner takes active and supportive steps in helping me meet my needs.

Studies show that responsive treatment leads infants to feel secure and children to feel supported; it makes people more satisfied with their friends; and it brings couples closer together.    

The Gallup organization has developed a set of questions to assess employees’ satisfaction at work. They discovered that the six most revealing questions are as follows:               

Do I know what is expected of me at work?

Do I have the materials and equipment I need to do my work right?

Do I have the opportunity to do what I do best every day?

In the last seven days, have I received recognition or praise for good work?

Does my supervisor, or someone at work, seem to care about me as a person?

6. Is there someone at work who encourages my development?

Moments of connection bond us with others. We feel warmth, unity, empathy, validation.               

To spark moments of connection for groups, we must create shared meaning. That can be accomplished by three strategies:

Creating a synchronized moment

Inviting shared struggle

Connecting to meaning

Groups bond when they struggle together. People will welcome a struggle when it’s their choice to participate, when they’re given autonomy to work, and when the mission is meaningful.               

“Connecting to meaning” reconnects people with the purpose of their efforts. That’s motivating and encourages “above and beyond” work.

In individual relationships, we believe that relationships grow closer with time. But that’s not the whole story. Sometimes long relationships reach plateaus. And with the right moment, relationships can deepen quickly.               

According to the psychologist Harry Reis, what deepens individual relationships is “responsiveness”: mutual understanding, validation, and caring.    

Responsiveness coupled with openness leads to intimacy. It happens via “turn-taking.”               

Chapter 12: Making Moments Matter               

What follows are five recommendations for finding great good in great suffering:

Look for small peaks

Celebrate and honor relationships

Acknowledge your strength              

Identify new possibilities

Look for spiritual insight

Other Books by Chip & Dan Heath

Switch: How to Change When Change Is Hard

Recommended Reading

If you like The Power of Moments, you may also enjoy the following books:

Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek

Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely

Drive: The Surprising Truth About What Motivates Us by Dan Pink

Buy this book

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Mastermind Dinners by Jayson Gaignard: Notes

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The Book in Three Sentences

  • “Your network is your networth”.
  • Relationships are based on quality.
  • Vulnerability is a gift.

The Five Big Ideas

“We overestimate what we can accomplish in a day, but underestimate what we can accomplish in a year”.

“Abundance creates energy, and envy (scarcity) drains it. You need to surround yourself with people who are batteries and not black holes”.

“Honesty, vulnerability and integrity are expensive gifts, don’t expect them from cheap people”.

“Invest in people like others would invest in a business; the return is far greater”.

“People don’t buy what you do, they buy why you do it”.

Mastermind Dinners Summary

“People don’t realize that entrepreneurship is ‘living a few years of your life like most people won’t, so you can spend the rest of your life like most people can’t’.”

“As my friend Colin Collard once said, ‘When one door closes, another one opens, but it sucks to be stuck in the hallway’.”

“Investing in my relationships was the safest investment I could make, and I believe the same is true for you”.

“We overestimate what we can accomplish in a day, but underestimate what we can accomplish in a year”.

“Abundance creates energy, and envy (scarcity) drains it. You need to surround yourself with people who are batteries and not black holes”.

“A candle loses nothing by lighting another candle”.

“Honesty, vulnerability and integrity are expensive gifts, don’t expect them from cheap people”.

“If you don’t have the courage to be vulnerable at times you’ll never be able to reach a real level of depth in your relationships. If you don’t share your struggles, people won’t buy your successes”.

“Invest in people like others would invest in a business; the return is far greater”.

“In a world where people measure their self worth by how many Facebook friends they have, I urge you to seek depth (quality) and not breadth (quantity) in your relationships”.

“At the end of the day it’s not how many friends you can count, but how many friends you can count on”.

“What I like to propose to people who want to improve their network is the idea that if you want to connect with someone who’s a millionaire – what would make you interesting to a millionaire?”

“I jump at most opportunities that will lead to a better story, or a better life lived”.

“If I could boil my success down to one thing it’s that I have always surrounded myself with people who were one or two steps ahead of me”.

“My model has always been that if you’re the smartest person in the room you’re in the wrong room”.

“Surrounding yourself with people who make you feel uncomfortable (on some level) forces you to grow as quickly as possible to bridge the gap between where you are and where they are”.

“Get comfortable with the uncomfortable because un-faced fears become your limits”.

“Surround yourself with people who make you feel uncomfortable on some level. If you do, it’s a great indication that you’re growing in ways you may not even be aware of”.

“Who you surround yourself with is who you become, so choose wisely”.

“Want to supercharge your networking with real players? Hold a dinner for speakers”.

“You must be sure there is at least one commonality amongst your guests”.

“Make sure you don’t select people at both extremes of the unifying commonality. You don’t want to have an entrepreneur with a one-hundred million dollar company at a dinner with a bunch of people who have startups”.

“You don’t want to invite anyone with a conflicting interest (i.e. direct competitors). The goal for you as a dinner host is to put four to eight incredible people in a room and create an environment where they feel comfortable to open up and share”.

“Before brainstorming who you would like to invite be clear as to ‘why’ you are putting on these dinners in the first place, and why you want certain individuals there”.

“People don’t buy what you do, they buy why you do it”.

“A good salesman knows that his first real sale is himself. I’ve learned that when you’re honest, raw and authentic, marketing is effortless. If people don’t bite it’s most likely because they are not the right fit, and I NEVER sell something to someone when they aren’t the right fit. For those who are the right fit, no explanation is necessary. For those who are not the right fit, no explanation will do”.

“My good friend Michael Fishman sums it up perfectly when he says that ‘credibility can be established with credentials or by being transparent that you have no credentials’.”

“Don’t forget to ask yourself one of the most important questions of all – ‘what is in it for them?’ It is baffling how often this question is overlooked. If you’re reaching out to someone cold, there must be some kind of clear benefit for them”.

“Ask yourself, ‘If I received 500+ emails a day, would I bother to open this email?’”

“Leaving subject lines open can be a great hook”.

“Whenever faced with an objection follow up with a question like ‘Under what circumstances would you say yes?’”

Buy The Book: Mastermind Dinner

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How to Own The World by Andrew Craig: Notes

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Craig defines wealth as the ability to live on the money you make from your money, rather than the money you make from working.

If you’re not making money from investing, you’re getting poorer every day.

Few people become wealthy because they rarely spend time researching and never properly try their hand at investing.

How to Own The World’s Fundamental Truths

No one is better placed than you to make the most of your money.

You have significant and inherent advantages over many finance professionals.

Making money from your money (investing) is far easier than you’ve always thought.

If you managed to learn how to drive, you can look after your money. It is no harder.

You can make far more from your money than you ever thought possible.

It is realistic for you to target making more from your money than from your job. This is the money secret understood by virtually every rich person in history.

Achieving the above is possible almost no matter how much you currently earn. The good news: doing this today is easier than ever before.

The tools available to you are the most powerful and the cheapest they have ever been. The bad news: it has never been more important to take charge of your financial affairs.

If you are under the age of about fifty, there is no chance that you will receive a government-funded pension you can actually live on after retirement.

The best definition of a truly wealthy person is that they are able to live on the money they make from their money, rather than the money they make from working.

If you do not have a solid grasp of what is happening in the world at the moment then it is very likely you are becoming poorer, and this process is only set to accelerate.

“Things” have been getting more and more expensive in terms of most of the paper currencies on the planet, which means that unless your salary is going up by at least as much or you’re making money from investing, in reality, you are getting poorer every day.

Any money you have is gradually being destroyed. If you have any savings in the bank you are losing real wealth every day, and losing more than you think. This is one of the many reasons people are feeling poorer without really understanding why.

With very few exceptions (Norway and Australia, for example), wherever you live in the world today you absolutely cannot count on being able to live on handouts from your government for the rest of your life when you stop working.

The average British adult has about £30,000 saved by retirement (or less than £10,000 for women and just over £50,000 for men).

If you want to have a pension income equivalent to the average British salary of roughly £27,000 per year you will need to have saved up a pension pot of around £675,000 when you retire rather than the £30,000 which is the current UK average as mentioned above.

So few people optimise their finances and become wealthy is because they don’t spend time trying their hand at investing.

One of the fundamental truths of capitalism is that capital makes a great deal more money than labour—people who own businesses tend to make far more money than people who work for them.

It is not an exaggeration to say that virtually every very wealthy person in history has accrued far more money from their investments than from being paid for their work.

According to the “efficient market hypothesis” (EMH), no one can outperform the stock market by choosing the right investments. That is to say that averages are important in financial markets and no matter how much training you get you will never be able to beat them.

The price of any asset will always be exactly where it “should” be because there are lots of intelligent, professional people involved in any given market who are reacting to a wealth of reliable information about where that asset should trade. The hypothesis proposes, then, that an investor will never be able to gain an edge or advantage such that they might buy a given asset and make a greater return than the market as a whole.

However, according to Craig, there is a vast amount of evidence and academic work demonstrating that the theory simply doesn’t hold up.

The main reason that the EMH doesn’t work in reality (and why you can hope to make great returns on your money) has to do with human nature and the existence of what is called “asymmetric information”. The key point here is that people involved in markets demonstrably do not have perfect information about the things they are investing in, as the EMH would have you believe. Some people have far more information than others—that is to say, information is “asymmetric”.

It is abundantly clear that no company should ever be worth twenty-five times the value of its sales or a few hundred times the value of its profits.

Investing in financial markets without knowing what you are doing is like driving on a motorway before you have learned how to drive.

Arguably the most important reason why most people fail at investment is that they fail to own a sufficiently wide range of investment products. Having a wide range of shares from all over the world, as well as property, bonds, and commodities, gives you the best chance of consistent success.

One of the most successful investing strategies over many years is being properly diversified. This means that you should ensure you own a wide variety of assets rather than just shares or just property, for instance.

Those who understand money and end up with lots of it tend to be those who understand that little and often is the road to success.

Another reason why so many people fail at the money game is that they use far too much debt in their life.

You have never been in a better position to make money out of a good idea than you are today.

Two Crucial Themes of How to Own The World

The world economy keeps on growing. You need to own the world in order to make superior returns on your money.

There is significant real inflation in the world because of quantitative easing (QE).

The Boskin Commission concluded that the consumer price index (CPI) overstated inflation by about 1.1 percentage points per year in 1996 and about 1.3 percentage points prior to 1996. In other words, today’s inflation numbers are essentially fiction.

There are three particularly dubious ways in which governments ensure that inflation numbers end up always being lower than the true increase in your cost of living (so you think you are wealthier than you actually are and they get to pay out less in social security, given this is linked to the “official” inflation numbers).

These dubious mechanisms are called:


Geometric weighting

Hedonic adjustment

Substitution is very simply when the statisticians replace something that is going up in cost a great deal with something that isn’t.

Geometric weighting is where the authorities include something that has gone up in price a lot as an inappropriately low percentage of the calculation.

Hedonic adjustment is when an item is reduced in price for the purposes of the inflation calculation because the authorities argue that you’re getting more for your money and you are therefore effectively paying less.

Another source of the “hidden inflation” that doesn’t make it into the official numbers is sometimes called “ghostflation” or “shrinkflation”. This is where a company gives you less of a product for the same price “on the sly”, something that has been prevalent in the last few years.

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”—John Maynard Keynes

The actions of many governments in recent years have led to a situation where we are in the throes of significant monetary inflation. And when there is significant inflation, the value of cash falls as the price of “things” increases.

The smart investor benefits from inflation by making sure he or she owns the very things that are going up in price. As a basic rule of thumb, this includes precious (monetary) metals, commodities, and property.

Live on less than you earn and invest the rest.

If you want to win at the money game, it is absolutely imperative that you create financial surplus in your life and invest that surplus in a good variety of assets.

You are going to be best off saving and then investing a minimum of about 10 percent of your monthly income.

It is best to be aware of anchoring and other similar behavioral traits each and every time we consider a market.

“Money illusion” is our tendency to not take inflation into account (sufficiently or at all) when thinking about changes in the value of something.

If you want to build wealth you must always be thinking about comparative value and purchasing power.

Of the sixteen biggest trading currencies in the world, the pound has been the worst-performing currency against the US dollar for the last five years.

When the pound weakens against other currencies, many of the things we need to spend money on become more expensive, usually after a small time lag.

The pound sterling price of your property is a poor indicator of what is happening to your real wealth.

One of the most useful ways of trying to work out if a property is cheap or expensive is the return it would generate for you if you were to rent it out.

Rental yield is the number you get if you divide the assumed annual rental income from a property by the assumed value of that property. It is a number that you can then use to compare the returns on property to any other asset you might be thinking about, including shares, commodities, bonds or alternative properties.

Net Rental Yield + Capital Gain = Inflation

Property generates a great deal more work than nearly all other investments.

If the average person in Britain is earning £30,000 and the average house costs £180,000 then this ratio is obviously 6:1.

“Mean reversion” is essentially the fact that anything measured will tend to go back to its average price over the medium to long-term.

It is worth knowing that the average ratio of house prices to salaries over the last several decades is actually between 3:1 and 4:1. This tells us that when the ratio is 6:1, house prices are arguably fundamentally expensive and likely to fall; when it is 2:1, house prices are fundamentally cheap and more likely to rise, all other things being equal.

Many people who look at the pound value of their property today and say that their property is worth the same as it was in 2007 are suffering from money illusion.

The endowment effect is when an individual believes the current price or value of something they own must be the same or more than what they paid for it—or, frequently, what their highest perceived value of it was (Dan Ariely discusses the endowment effect in detail in Predictably Irrational).

In France, with very few exceptions, the basic approach is that the total of an individual’s monthly mortgage payments should not exceed one-third of the buyer’s gross monthly income.

If you find yourself looking for houses and the only ones that you like are priced at six times the combined income of you and your partner or spouse, then you should almost certainly consider renting for the time being.

Interest rates are the lowest they have been in 300 years and mean reversion tells us that there is a high probability that they will be higher in the future.

The sooner you arrange your affairs so that you can create some savings to invest in assets other than property, the sooner your wealth will start growing meaningfully.

Negative equity means that if you were to sell your house you would end up with less than you need to pay your mortgage back.

If you are going to flourish financially you need to have a much better than average grasp of the type of accounts available to you and the best ones among them.

Craig’s advice with your main bank is simply to keep as little money with them as possible.

No matter what your political inclinations, no matter how you view the role of government, the simple fact is that they can’t afford to pay for society’s pension and healthcare requirements the way we have for the last few decades.

If you don’t already have a pension and if, like most people, you have less than £1,270 a month to save and invest (the current annual ISA allowance divided by twelve), you might actually consider not organizing a pension at all.

If at all possible you should aim for at least 10 percent, of your salary after tax being automatically paid into your investment pot every month.

After you get used to it and you start seeing your pot grow, you might even consider upping the percentage to 12 percent or even 15 percent.

An ISA account is simply a type of investment account in which the government lets you invest a certain amount of money each year.

If you are to have any chance of making a real return on your money, you need to invest in things that have a chance of outperforming inflation.

There are several main categories of financial product, otherwise known as “asset classes” or “investment vehicles”, with which you can store (and hopefully build) wealth.

The main types of individual investment vehicle we are interested in are:


Property (or real estate)


Shares (otherwise known as stocks or equities)



Insurance products

To a lesser extent, there are two further categories that are of interest to the more expert investor:

Foreign exchange (often called forex or FX)


A fund allows you to own a large basket of any of the other products on the list or even a mix of them from several categories.

Dividing your resources among the different investment vehicles is what is known as “asset allocation”.

When you are young, you want to be looking to grow your money. As you age, however, you will want to ensure that you are investing more and more safely to preserve the pot you have made and be able to earn a decent income from it.

The older you are, the more of your wealth you should hold in bonds and cash—and the younger you are, the more in shares (equities).

Many people in the UK and USA have almost all their wealth in property—and in the long run, this is inadvisable.

To give yourself the best chance of becoming truly wealthy, you need to ensure that you are aware of, and are exposed to, the other asset classes – particularly shares, bonds, and commodities.

When considering how safe your money on deposit at a bank or building society actually is, you must understand the difference between the interest rate your bank is paying you (the “nominal rate”) and the interest rate your money is actually earning (the “real rate”). The difference is inflation.

If your money on deposit is earning 1.44 percent when inflation is running at around 10 percent, then you are losing more than 8.5 percent of your wealth every year in real terms.

The calculation is very simple: real interest (return on cash) equals nominal interest (what your bank is paying you) minus inflation.

It is important for your long-term financial success to keep as much of your wealth as possible in assets that have a positive real return.

When real interest rates are negative, as they are now, you should look to have only as much cash as you need in order to pay for things in the short term.

Work out what you need to live on each month, add any other purchases or expenses you think will crop up this year (holiday, car, university tuition), add a margin of error for safety and invest everything else in assets other than cash.

One of the ways of getting exposure to overseas and/or commercial property is through owning a fund, and this may be worth considering.

A bond is a loan divided into many pieces so that it can be made by lots of people

The interest paid by a bond is referred to as its “coupon.”

There is basically no other way for a government to raise money other than from taxation or from selling bonds to investors.

Lower bond prices mean higher interest rates and vice versa. They are two sides of the same coin.

QE keeps bond prices up (and therefore interest rates down) but it also creates inflation (devaluing the dollar and the pound) so the effect is still negative.

If you have basically the same amount of “stuff” in an economy and the quantity of paper money doubles, the price of that stuff will double (after a certain time lag).

Those who understand QE are destined to make money from it, and those who don’t are destined to suffer.

Given the relative rarity of government default, bonds have traditionally been viewed as the safest financial investment you can make—similar to keeping your money in a deposit account.

Stock market investment is not the preserve of the wealthy; it is available to anyone who is willing to find out about it and get involved—many of whom will then become wealthy.

To work out how much you are paying for a share in real terms, you must think about how much profit a given company is making now (and is likely to make in the future), and compare how much you might have to pay for your share of that profit to how much you might pay for the same share of another company’s profits. This is known as “earnings per share” (EPS).

“Price to earnings ratio” is known as “P/E” for short.

A lower P/E ratio means that you are paying less for the same entitlement to profit.

The P/E ratio is arguably the single most important thing you will ever learn about shares.

The P/E multiple is widely available online and in the financial press; it is your first step to understanding whether a share is expensive or cheap.

The earnings yield of a share is easily calculated by simply dividing 1 by the P/E ratio and multiplying it by 100 to get the percentage.

The book value is simply the value of all the assets a business owns, as added up by their accountants, and it is yet another way we can compare the value of one share to another.

The book value can be divided by the number of shares to give an idea of the value of existing assets that each share is entitled to. This ratio is called “price to book”.

A fascinating thing to be aware of is that it is entirely possible for some shares to be trading at less than book value.

Dividends are another very important aspect of shares to be aware of.

Earning yield is the amount of profit you are entitled to each year, expressed as a percentage of the price you paid for your shares.

Just as with earnings yield, dividend yield is simply the percentage return you get if you divide the money you have invested in your shares by the money you get from your dividend. When you look at a company, it is important to look at how much that company has traditionally paid out in dividends and what analysts think it might pay out in the future.

Wikipedia describes a “commodity” as, “A good for which there is demand but which is supplied without qualitative differentiation across a market.”

It is absolutely essential that you think about and have exposure to commodities if you want to grow your wealth in the next few decades.

For the majority of people, funds are the most relevant (and appropriate) investment vehicle.

Buying the right funds at the right price will make a huge difference to your life.

Active funds are funds where an individual (known as a fund manager) tries to use his or her skill to pick the best shares (or other assets such as bonds or commodities) to make the best return possible for investors in that fund.

There is a wealth of research that says that, on average over the long run, passive funds outperform active (after accounting for costs).

Passive funds are where a fund management company copies the performance of an index (see below).

An index is simply a method of measuring a stock market in some way.

The FTSE 100 is an index. It is simply an invention of the London stock market; it adds up the price and size of the biggest 100 companies in the UK in order to generate a number, which is known as the “level” of the FTSE 100.

Faster-growing companies will often have faster-growing share prices, which means you may have the opportunity to make higher returns with successful smaller companies than very large companies.

If you think something will fall in value, you are often able to make money out of that too. This is called “shorting”.

Smart beta-funds aim to give you the low cost and breadth of a passive or tracker fund but with the improved performance you would hope to achieve with an active fund.

One problem with many tracker funds is that they are what is called “market cap weighted”. This means that the bigger the company is within an index, the larger it is as a percentage of that index and, therefore, as a percentage of any tracker or index fund that attempts to replicate the index. Therefore any money you invest into such a fund owns much more of the big companies than the small companies.

An equal-weighted index of the FTSE 100 or S&P 500 can outperform a market cap weighted index.

Smart beta funds aim to give you the performance of an active fund for the fees of a passive fund, and you should certainly consider them once are ready to invest.

ETFs are almost all passive funds.

Investment trusts, by contrast, tend to be active funds run by a fund manager with a particular focus such as smaller British companies or Japanese equities (Japanese shares).

There are also many thousands of other funds that do not trade like shares. These funds are usually what are called open-ended investment companies (OEICs) or unit trusts.

There are basically three types of fee or charge you will need to be aware of when considering whether or not to buy an unlisted fund (one that doesn’t trade like a share): the initial charge, the annual management charge (AMC) and the total expense ratio (TER).

It is crucial that you understand all relevant fees and costs before you invest in anything.

When you are considering the purchase of a fund, you should always find out the total expense ratio.

Quite simply, a performance charge is an extra percentage of your money that will be paid to the fund manager if your fund goes up by more than a certain percentage.

If you own a fund that generates income from dividends or coupons you can choose to have that income paid out to you in cash (as would be the case in an income fund) or you can elect for that money to be plowed back into units in the fund you own. This is called “accumulation”.

Very often you will be able to choose between income or accumulation versions of the same fund.

Unless you need the money, for example, if you are retired, it is best to choose to own the accumulation fund.

Ploughing the income earned back into your fund will maximise the effect of compounding on how your money grows.

The great thing about the foreign exchange markets is that “there is always a bull market somewhere”.

Annuity rates today are about 4 percent. At the most basic level, this means that when you retire, whatever lump sum you have in your pension can be exchanged for an annual income equivalent to about 4 percent of that lump sum.

When I talk about “owning the world” I mean: You should own a wide variety of investment products or assets. In the long run, you will want to have cash, shares, bonds, commodities, and property, not just one or two of these. You should aim to own assets from all over the world, not just one geographical area such as the UK or US.

Owning the world means that you end up being diversified both geographically and by asset class.

“Geographically diversified” simply means that if one part of the world is having a difficult time, perhaps Europe or the USA, you still have a good chance of making money because you have exposure to another part of the world that is going up a great deal, for example, certain emerging markets or Japan.

One of the biggest mistakes people make with their investments is that they tend, in the main, to own assets from their own country.

“Diversified by asset class” means that in a year when shares fall off a cliff, as most of them did in 2008, you won’t lose a vast chunk of your money like everyone else.

In the long run, it is much easier to own a mixture of assets so that you have a better chance of owning something that goes up when another type of asset crashes.

Exposure to monetary metals and commodities will enhance your overall performance without complicating matters or being prohibitively expensive.

In general, I would suggest you allocate 60 to 70 percent of whatever you are able to invest monthly into owning the world, 20 to 30 percent into owning inflation, and keep 10 percent in a bank account as cash.

Craig suggests you do not begin to invest money into the above financial assets you are looking at until you have first cleared any expensive (non-mortgage) debt and have saved at least a month’s salary to keep as cash, and possibly more.

One method of owning the world is to buy one fund for each geographical area and one or two for each asset class. You could buy a FTSE 100 tracker to own UK shares and an S&P 500 tracker to own the US, for example. You might then do the same for Europe, Asia, Latin America and Africa and then use other funds to get exposure to real estate, commodities and the bond market.

If we want to own inflation, we just need to own some commodities.

Given the general commodity exposure you will have by virtue of owning the world, Craig firmly believes that the best assets for you to buy to gain additional exposure to commodities—and therefore to “own inflation”—are precious metals.

Today, people all over the world can buy gold with the click of a mouse button.

A better way of looking at establishing gold’s value is to compare it to other key assets over time.

The point here is that the smart money will always be looking at relative value in the long run.

When interest rates are high, owners of gold miss out on this return. Economists call this the “opportunity cost” of owning gold.

In the UK market Craig believes the best provider available is a company called BullionVault.

If you already have a lump sum you would like to invest (a very good idea) and if you want to keep things very simple, then Craig suggests you divide that sum into twelve and pay one-twelfth of it into your chosen investments each month for the next year, along with what you intend to save monthly.

One of the reasons relatively few people succeed in making big-picture asset allocation decisions is quite simply that relatively few people take the time to understand and look at all asset classes, or even to work out how to invest in them.

As you get older you should be thinking more about the return of your money than the return on your money.

Even if you think you’ve become quite good at short-term trading, it might be an idea to allocate your money something like this: 40% longer-term investments in shares and share funds 25% in precious metals and other commodities 10% in bonds 10% in real estate (not including your primary residence) 15% to “wing around”, trading more risky assets (perhaps small, higher-risk shares, or trading forex and other assets with a spread betting account).

Craig says Trade Your Way to Financial Freedom should appear in any list of the best investment books of all time.

If you believe that you can make money from your money, this is an important step on the way to true wealth and financial freedom.

If you take only one action, take the time to read Trade Your Way to Financial Freedom by Dr. Van K. Tharp.

Given Craig’s own top-down analysis of what is going on in the world at the moment, his personal top ten at the time of writing is:

Precious metals and precious metal mining funds and companies Oil/energy/oil services funds and companies

Healthcare, pharmaceutical and biotechnology funds and companies

Emerging-market infrastructure: water, railways, automotive, agriculture Potentially explosive frontier markets: Zimbabwe, Mongolia, Burma/Myanmar “Rich” country funds (bonds and shares): Singapore, Qatar, Norway, Canada, Australia

The world’s best technology companies: Microsoft, Oracle, Intel, Apple

The world’s best consumer goods companies: P&G, Unilever, etc.

The world’s best tobacco, gambling and brewing companies (“sin” investing)

Clean energy/new energy technologies that don’t require government subsidy: uranium, thorium, rare earths, etc.

Never be afraid to put things in the “too hard bucket” and move on to something that is easier to understand, especially given how many opportunities there are out there.

Do not be afraid to take your time when building your shopping list of themes and companies.

Fundamental analysis is when you assess the inherent or fundamental value of an asset in order to work out whether it is cheap or expensive.

One of Craig’s favorite valuation tools in this respect is something called the PEG (price/earnings to growth) ratio. It is worked out by dividing the P/E of a company by its estimated earnings growth.

The lower the PEG the better, as the number implies you are paying less to “own” more profit growth.

Once you have chosen a theme and made a list of companies you might consider to give you exposure to that theme, the next piece of the jigsaw puzzle is to find out these numbers based on the company’s current share price.

For each company, you should find the current year’s P/E, PEG, dividend yield and price-to-book ratio (i.e. book value per share).

Bonds, property and commodities have their own distinct characteristics and we must evaluate them in a different way as a result.

We can think about a property’s total return as a function of the assumed net rental yield (after costs, void periods, etc.) plus any assumption you might make for capital growth.

This percentage return number can then be compared to return numbers for other asset classes: the interest rate on a current account, the dividend yield (plus expected capital gain) of a share or the yield on a bond, for example.

Basically, a moving average takes a number of prices (for example the closing price) over a number of time periods and computes the average.

If you only read one book to inspire you about technical analysis, Craig recommends Big Money, Little Effort by Mark Shipman.

Recommended Reading

If you like How to Own The World, you may also enjoy the following books:

Predictably Irrational By Dan Ariely

Rich Dad Poor Dad by Robert Kiyosaki

Think and Grow Rich by Napolean Hill

Buy The Book: How to Own The World

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