Why You Struggle To Make Money
The Mastery Letter #2
I've always hated grade school.
Too many different subjects, too many distractions, too many classes back-to-back, all boring as hell.
I had no idea what skills they were trying to teach me and how they would be useful at all in my future.
I didn't know how to focus, but I did know that I didn't want to focus on that bullshit.
I skipped school constantly to go skateboard with other kids that didn't give a shit.
Hell, at one point, I even cussed out my high school vice principal and got sent to an alternative school.
I was a disrespectful little shit.
He was an asshole though.
Beyond skateboarding and playing halo 2, I didn't know what consistent, focused effort was.
Eventually, I dropped out of high school. A few years later, I somehow got into university and eventually dropped out of that too.
I was procrastinating and spending loads of time on things that don't bring me long term ROI.
I was a scum bag, that hung out with scum bags. All I did was drink, play video games, partying, get in trouble with the police constantly etc. I read maybe 1 book from age 14-22.
My point is..
I was pulling all the wrong levers. I was putting myself into college debt, getting into trouble with sketchy friends, creating bad habits, and learning useless theories from people that are broke and one dimensional, because that is what everyone else did.
I wasn't learning skills.
In life, success comes down to skills.
In order to learn skills, you must learn to focus.
In order to focus, you must first learn WHERE to place your focus.
Hyper focusing on specific skills, consistently, for a decade, is the 8th wonder of the world. It is a superpower.
After a long journey in my 20s I finally figured out how to hack my dopamine system which allowed me to finally figure out where and how to hyperfocus on learning skills.
Here is what I learned after a decade of trial and error, going from being a high school dropout, to making 6 figures+, being in great shape, and having a great social network.
I found that there are 5 critical principles that will 10x your ability to learn and master skills.
The Pareto Principle
Archimedes' Leverage Principle
Opportunity Cost Principle
Parkinson's law Principle
Don't worry, I will explain all of these in detail, simplify them and tell you how to apply them in your life.
It is important to know that when combining all 5 of these principles, it will unlock an insane compound effect to all of your results, so read carefully.
The Pareto Principle
The pareto principle states that for many outcomes, roughly 80% of the consequences come from 20% of the causes, "The vital few".
80% of things taught, done, or said are bullshit. You must find the 20%.
80% of sales come from 20% of clients
80% of stock market gains are realized from 20% investors
80% of workers are low performers and 20% get everything done
20% of men have access to 80% of women
20% sources are contributing to 80% of your problems
20% sources are resulting in 80% of your desired outcomes
As you can see, we can extrapolate this into dozens of different domains.
Here are practical examples from my life that I have personally experienced the 80/20 rule:
In my 10 years working in tech, people would constantly come up to my desk, avoiding work. They would spend 80% of their day talking, chatting through slack, a little email here and there, take a package to UPS etc. By the end of the day, they worked maybe 1 hour. There is no deep focus.
This results in 20% of people doing 80% of the work in almost every business. Even at the highest levels.
80% of the results just come from 20% of the information available. All you need to do is focus on a high-income skill, then deploy capital into cash flowing assets. Take a couple hours to set up automatic bill pay for fixed expenses, use mint app for optics, create a couple banking accounts for fixed expenses and discretionary expenses, and then automate investments into low-cost index funds like FSKAX or VTSAX. I also recommend real estate and a little crypto. Seriously, automate everything you can. We want to remove limbic friction as much as possible.
Instead, people get financial advisors who make everything complicated, try to beat the market etc. People will try to time the market and day trade when none of that is optimal or necessary. Keep it simple and invest in your business, passive index funds, real estate syndications, a little crypto.
You are the average of the 5 people you are around. If you hang around anchors, you will sink with them. If you hang around sails, they will grow with you, and you will all make each other better.
Like crabs in a bucket, some friends will see you going through hormesis and growth and this will highlight their inadequacies. Their defense mechanism will be to try to bring you back down to their level.
This will manifest itself in things like "You're different" "You work too much" "There's more to life than money" etc etc. They will bring up older iterations of yourself to try to mold you back into the old identity you once were, as that is comforting to them.
Because the stay stagnant and comfortable, they cannot perceive the idea of identity being fluid, and everyone as iterations of themselves as they grow and improve along a linear timeline.
You will need to cut some people lose; it is just the way things are. My point being, 20% of your friends (including your spouse) you have in life will be worth keeping and give you 80% of the joy, shared values, goals, comradery, growth and experiences.
20% of the effort in the form of action will get you 80% of the results. You could have person A read 2 books, the compound effect and a book on commercial real estate and within a year, they are making 6 figures because they took action and solved the problems as they arose. They committed, took first steps of action and figured out how LATER.
They didn't have paralysis by analysis.
On the other side you've got person B who watched 100s of self-help YouTube videos and do NOTHING. they just self-help masturbate for years.
You can put all of your high impact, high leverage items in 20% of your time awake and get 80% of the results.
You only need 4 hours a day of high leverage habits like lifting, meditating, deep work, reading, writing over 10 years consistently and you will be an absolute monster of productivity and results. You will also feel great mentally and physically.
I can knock this stuff out from 7am-12pm and be done for the day.
You will be a master of your body and mind. Wealth will follow. I promise you that.
On the other side of the coin, people will wake up at 11am, lay in bed and scroll TikTok for 2 hours, watch porn, uber eats, and then try to get some shallow work done and call it a day.
Maybe after all of that they might run a half a mile on a treadmill every now and then when they get a burst of motivation, burn 500 calories, then "reward" themselves with 1000 calories after.
Most people spend 80% their day on lower leverage activities and wonder why they get 20% of the results.
You can spend VERY little time a week on health and get MASSIVE results. If you spent 20% effort towards good sleep, lifting weights, good diet and heat/cold exposure you simply get 80% of the results. Throw in some Atheltic Greens for vitamins and minerals and call it a day.
Anything beyond that is dabbling in 1-5% increases in health. You can literally just sit in a sauna 4x a week for 20 minutes and get a 40% reduction in ALL cause mortality from heat shock proteins. You can use saunas for improved endurance, preventing muscle atrophy, improving learn and memory, longevity and so on.
That is absolutely insane.
Check out Dr. Rhonda Patrick if you want more details on that.
Same goes with cold showers, 12 minutes per week and you can raise your baseline dopamine. This helps with depression, increases brown fat, releases norepinephrine which reduces inflammation, increase focus, attention and mood.
Ever since the beginning of my lifting journey, I've seen people in the gym 7 days per week, 2 hours per day, and they never look any different.
They would shame anyone that isn't doing back squats and deadlifts. They don't track their workouts and never progress.
14 hours a week for shit results.
I want to get the maximum results in the minimal time so I can go enjoy life like hanging with my girlfriend, friends or rock climb.
No shame there. This is what Martin Berkhan coined back in 2011 as "Fuckarounditis". The blog article was a hit at that time and inspired thousands.
Here is how we apply the 80/20 role and solve this problem.
Go to the gym 3 days a week for 45-60 minutes
Focus on key lifts like incline bench, weighted pull up, romanian deadlifts and some form of squat like front or bulgarian split squat
2-3 sets per exercise, 2 compounds, 2 isolations
For isolations I like DB skull crushers as they hit the long hit which is 2/3 of your arm. I also like incline curls for the bicep stretch. Lateral raises and bent flys are critical for 3d delts, do not skip these. I like to do something like 15,4,4,4,4 on these with 4 seconds in between to blast them.
Shoulders, back and upper chest have the most ROI in terms of aesthetics. You goal is a V taper as that is the greatest sign of attraction you can have as a man
do 2-3 warm up sets. I see way too many people damn near doing a full workout of warmups. Stop it. This is unnecessary and cuts away at your intensity and ability to do what you are there for, get stronger.
Reverse pyramid train, meaning, heaviest set first. 6-8 reps, drop 10%, 8-10 reps. Drop 10%, 10-12. This will ensure you are fresh and can hit a PR. most workouts
If your weighted chin up and incline bench 6rep max go up 30lbs you will see growth, this is not debatable.
Don't chase pump, chase results
Track your weight and reps
Do more reps or weight than last time
Eat .8g protein per lb of weight
That is all folks.
80% of your health comes from 20% of the foods available. Don't get me started on western culture's terrible dietary advice, politics and our food pyramid.
Fad diets are rampant with misinformation, sugar companies are blaming fat companies, and fat companies are blaming sugar companies.
It is chaos.
Here is how we solve this problem.
Fast until 5 hours after you wake up. If that is 7am, eat at 12pm. There are mountains of data on this as it increased longevity, focus, lowers blood glucose etc.
Avoid all fad diets that eliminate a macro like fat or carbs
Balance is everything
Focus on foods high on the satiety index so you stay full. I will mention many below in my list.
Avoid processed shit that is covered in high omega 6 seed oils
Keep it simple
I find that whey protein causes digestion issues and also doesn't keep me full so I go with Kinobody's Kino Collagen Protein
Eat .8g protein per pound of body weight. Protein burns the most fat when metabolized and is very satiating.
Pick 10-15 whole foods and just make a few meals out of them. I eat nearly the same thing every day
Pick a couple meats, I like eggs, salmon, grassfed beef and chicken
Pick a few vegetables. I like mixed greens, carrots, olives, bell peppers.
Pick a few fruits. I like bananas and kiwis
Pick a few carbs. I like potatoes and sweet potatoes because grains give me inflammation.
Use avocado or olive oils
Use an air fryer to cook things easy. Make salads to put things together. etc.
You only need a few pieces of clothing that compliment your physique.
Most people don't wear 80% of their wardrobe.
Again, keep it simple and a few good fitting shirts, shorts and jeans will get you 80% of the results.
Don't wear that baggy shit.
Kino clothing is my favorite, he's got the fit built for a v taper and really pops the shoulders.
2) Archimedes' Leverage Principle
Archimedes famously stated:
"Give me a place to stand, and a lever long enough, and I will move the world."
He is essentially saying he can use knowledge as a tool to learn skills. Skills bring utility, utility is leverage. He can then use the leverage to use minimal effort to receive maximum results.
Leverage is input vs output in a system.
Investing in skills will give you more leverage on your time.
Most people either do nothing with or consume time. Very few properly invest their time.
The goal is to spend as minimal time as possible directly trading your time for money as you only have x time in a day.
Find and use high yield levers like media/code/real estate.
Deploy your time and capital into high leverage assets like these that generate cash flow.
write an e-book, create a blog/newsletter helping solve a problem
Write unique code for an app and sell it
Deploy $ as a limited partner in commercial real estate syndication for cash flow and tax benefits
Deploy $ into index funds and when it hits 1 million you can safely pull about 40k/year out without touching the principle
These are all great examples of creating systems that work for you.
Old labor = capital, labor (money, time, people)
New labor = Systems like media or code.
Fortunes require leverage. Business leverage comes from capital, people, and products (code, media, real estate)
Apply specific knowledge with leverage and eventually, you will get what you deserve.
Leverage alters the relationship between your input (time/effort) and the output you get (capital).
Meaning, you can totally minimize your input into the system (effort) and get compounded outputs (nonlinear, huge growth in capital)
For example, using leverage, you might work on a project for 1 day or 1 month and that can bring an output that someone unleveraged would not get in a lifetime.
This is why you want to trade time for money as little time as necessary. Ideally, you must own something, run it on a form of leverage and apply your specific knowledge.
This blog is a form of leverage because it has almost zero overhead. I can use it spread my specific knowledge, and it will keep churning while I sleep or while I'm in Maui.
Forget about white collar vs blue collar, the true difference in success is all about who is leveraged vs unleveraged.
3) Bygones Principle
Also called the "Sunk Cost Fallacy", the essential idea is, as people invest their time, money and effort into something, they will become more reluctant to pull out.
A good example is gamblers and how they will lose $10,000 at the casino, but then go gamble more because they think they need to win it back because they already invested $10,000 in the ordeal.
Or, that sketchy investor who keeps convincing a friend to give them money for a deal, asking for more and more every few months, and the person continues to invest because they have already invested so much, they don’t want to risk losing it all.
For all the gamers reading, in Overwatch, this principle comes up often in regard to managing Ultimate's.
I would see this often where players would have their ultimate on a character that wasn't providing value for the team, but they wouldn't swap heroes because they were so worried about losing their ultimate.
We would lose because they wouldn't just swap hero's, take the sunk cost, and win the game because of the value we would have got from them on another hero.
Everything you do in life, is an investment, whether it be sweat, pain, mental or physical effort, money, learning, time, etc.
When you aren't educated on the Bygones principle, you may find yourself stuck in low leverage activities, habits or careers.
You are reluctant to look elsewhere and began new opportunities, because you've already sunk time, effort and money into these areas that are giving you minimal results.
BUT.. just because you spent 100k on a useless fine arts degree, doesn't mean you should stick with that career path.
You need to know when to detach from your emotions about the thing, figure out a high leverage activity, change direction and execute.
The investments you've lost are sunk and in the past, and you'll use Archimedes Principle to earn 10x that amount.
4) Opportunity Cost Principle
Similar to the Bygones principle, the idea is that any particular activity that you engage in, you could be giving up value or benefit compared to if you engaged in a more optimal activity.
Example: Spending an hour playing video games vs 1 hour lifting weights. I don't need to explain further on why lifting is the better option.
I always have my daily habits under a microscope to ensure I am making the best decisions with my time, so I can minimize opportunity costs and maximize high leverage activities.
This is extremely important. Put your habits under scrutiny, immediately. I was doing the math last night and because I am 31 years old and will likely live to around 80 (hopefully longer)....
I have roughly 2500 weeks left to live.
Every week that you squander... every week that goes by, are precious days that you aren't able to be mindful in the present. These are days you could be enjoying long term gratitude, pride, fulfillment and purpose.
Notice I didn't say joy or happiness. These are temporary emotions that come and go. You want to aim for long term states of mind.
Don't give away your precious 2500 weeks to distractions like Tiktok and video games.
This really helps me choose the activities and people I engage with seriously on a daily basis.
Chase skill mastery and this will lead you to a life of purpose and fulfillment. Create experiences and be 100% present in those times with people you love so that on your death bed, you can look back at your memories and have no regrets.
5) Parkinson’s law
This law essentially states that a task will swell in perceived importance and complexity in relation to the time slotted it’s given for completion.
It’s the magic of an eminent deadline. Time pressure forces execution.
Identify the few missions critical tasks that contribute most to income and schedule them with short and clear deadlines. If you don’t, the unimportant will become important. Long deadlines will be swelled with minutia.
You will end up checking email, sending slacks chats, and dropping off a ups package, setting a couple outlook appointments and joining multiple useless meetings should not consume your day.
The day will end with nothing done. This is how most people live their lives whether it be at work, health or relationships.
Create deadlines for yourself.
I like to put a 90-minute timer for these newsletters and see how much I can get done.
You will surprise yourself.
In summary, you want to combine all 5 of these principles
1) Be mindful of the 80/20 rule, find the 20% that will give you 80% results in all domains of life
2) Like Archimedes said, those 20% efforts should be high leverage activities where you can apply minimal effort for maximum leverage. Get away from trading your time from money. Most people deploy their time into low leverage jobs (low income and have pay ceiling) and deploy their capital in liabilities (consumer mindset). If you have a low leverage job, you want to deploy your time and capital into learning a high-income skill from mentors, courses, certifications, seminars etc. Take action NOW. No excuses. Then, because skills have utility, you can deploy your skill create high leverages systems that generate cash flow on their own. After that, you deploy that cash flow into more systems (assets) so they can continue to compound and do work for you. You then learn how to avoid taxes using real estate using cost segregation, depreciation etc. This is how wealth is built.
3) Don't get trapped in the sunken cost fallacy. If you've already spent 100k on a useless degree andn make 15/hr, go get a $500 certification so you can make $25/hr and use that money to invest in yourself to get a higher income skill.
4) Every decision you make has an opportunity cost, weigh your options, think about if there is a higher leverage way of doing it. No need to have FOMO on everything, just make a calculated decision and MOVE FORWARD.
5) Lastly, set deadlines for yourself to get things done, if not, work will absolutely expand naturally to fill the time available for its completion. You can get things done 10x faster than you think. Seriously.
Talk to you next week.
Thanks for reading The Mastery Letter Subscribe for free to receive new posts and support my work.