Life is not a trial run, every major decision you make now will have a major impact on the rest of your life. You pay for everything you do now with compound interest in the future. Four years spent in your prime failing will cost you for the rest of your life.
That’s why it’s so important to make the right decisions. Because your time is the only thing you can’t get back.
Now don’t get me wrong, you can’t let the fear of failure stop you from pursuing your mission.
What I’m saying is that every major failure is very expensive and should be avoided at all costs.
Say you spend two years grinding and saving to make your mission a reality. And then you put another two years and all your cash into the wrong business and it flops. That’s four years in your prime, plus your life savings and all it’s potential compound interest gone. And now you need to go back into the workforce, start from scratch, and try not to jump off a tall building.
That time and those potential clients and that potential money and that potential compound, reinvested interest – gone and not coming back.
The truth of the matter is, you get one shot at life, and the price of even one wrong major decision is high.
And this is applies just the same to your health and relationships as it does your wealth. That’s why the decisions you make now are so important.
I consider a major decision to be anything that requires a significant amount of your time, money and commitment.
Some examples of major decisions are:
- Having children
- Getting married
- Starting a business
- Buying a house
- Having kids
Any of the above examples have serious consequences when keeping it real goes wrong.
That’s why, before you commit to any major change in your lifestyle, you need to approach that decision like a seasoned investor.
I spent my early 20’s as a pro trader and a student of the markets. Eventually my arbitrage niche dried up and I decided that investing in the market wasn’t the move, but the decision making skills I learned have been worth their weight in gold once I started applying them to my personal life.
With that said, I don’t want you to think you have to get out a spreadsheet for everything you do. I’m not promoting, a rigid, robotic approach to life, I just want you to, make sure that when you have a big decision on your hands, you have the right tools, and you make the time to sit down and weigh all the angles.
Here’s the criteria:
- Opportunity Cost
How To Make Better Decisions
Before you make any major decision you need to know what your downside is, that is, your worst case scenario, and if you’re capable of taking the hit without self-destructing. The first rule of investing is always protect what you have.
But what you’re really protecting however isn’t your money, it’s your happiness, because money is just one of the tools that makes it easier to be happy. And the most powerful tools for happiness in life come from your health, wealth and relationships. A major hit in any of those areas means major levels of unhappiness.
Therefore every major decision has to be filtered by how potentially damaging it will be to those three key areas of your life. That doesn’t mean you should be screening every woman you meet like you we’re Warren Buffett. But it means that if you’re thinking about settling down and having kids with her (which you shouldn’t be because you met her on Tinder), you damn well better do your homework.
My advice is to look at your risk on any decision with these five factors in mind:
- Cost Of Failure:In regards to your time, health, wealth and emotions
- Speed Of Failure: How long it will take to recognize you’ve made the wrong decision
- Recovery Time: How long it will take you to recover your health, finances and emotions
- Risk/Reward: Whether the reward strongly outweighs the risk of the decision
- Risk Management: If there is any way to lower your risk on the decision
You’ll never be able to find a perfect decision, but you want those categories looking as good as possible before you jump into anything big.
So, let’s say you want to max out your lean genetic potential with the end goal of building a panty-wetting body you can be proud of. Your natural genetic potential is going to be 35 to 50 lbs. depending on how good your genetics are. And the total time to get there is about 3-5 years of dedicated intelligent training, eating, recovery and getting decent sleep.
Here’s how your risk profile looks:
- Cost Of Failure:Negligible, unless you’re lifting like an idiot, then your health is a risk
- Speed Of Failure:Short, 1 to 6 months at the most, guys who keep at it past 6 won’t quit
- Recovery Time: Negligible
- Risk/Reward:Very good, unless you’re lifting wrong and lifting too frequently
- Risk Management: Lift with perfect form, high intensity and infrequently
Overall, maxing out your genetic potential, when you follow a safe, smart lifting plan has an excellent risk profile.
But let’s say you want to be a competitive bodybuilder. And that instead of the 35 to 50 lbs. you can get naturally, you want to become a mass monster with 120 lbs. of lean genetic muscle on your frame.
That means you’re looking at the next decade of insanely dedicated, intense training at the least. And you’re going to need spend 30k a year on test, insulin, HGH, Dianabol, Deca Durabolin, a ton of food whatever other crazy sh*t guys these days are taking.
Here’s how your risk profile looks:
- Cost Of Failure:Massive in all areas
- Speed Of Failure:Long, it might take a decade to realize you won’t be Ronnie Coleman
- Recovery Time: Long
- Risk/Reward: Terrible, winning an Olympia is very unlikely and the risk is huge
- Risk Management: Not possible (you need to take way too many drugs)
As you can see, your risk profile for becoming an elite bodybuilder is horrendous. From stiffness, to lack of mobility, to hairloss, to organ failure, to diabetes, to death, the list goes on an on. I’m sure it feels pretty cool to walk around like a monster at least some of the time, but the risks rarely justify the rewards.
It’s a decision that paid off well for guys like Jay Cutler, where he was able to handle the drugs and leverage his physique and success into dollars. But most guys won’t be Jay Cutler and won’t make much if any money off bodybuilding. And to get a true picture, you’d have to see how Jay’s health holds up over the next 30 years.
Of the two, based on their risk profiles, the natural option is hands down the better decision.
With that said, another option might be to aim to look like a fitness model with 50 to 65 lbs. of lean muscle. If you’re over 27, have maxed out your gains naturally, are willing to take a bit more risk, and willing to take TRT and a few “prohormone” cycles a year, this might be the move.
It all comes down to what risk profile you’re willing to accept. The important thing is you factor in the potential risks for every decision you make.
Once you’ve got your risk profile covered, the next thing you need to look at is your probability of success. A player in the game of life doesn’t think in terms of certainties, he thinks in terms of probabilities. And the key question in terms of probability is: “What are my odds of success?”
Because success always means beating the odds, and the more successful you want to be, the bigger the odds are going to be stacked against you. Getting the exact odds on anything can be difficult, but your job is to get as good an estimate as you can.
Let’s look at the odds for starting a business. The failure rate for any business is 90%. That means you have a 1/10 chance of making it happen, not great but definitely in the realm of reality for a young, hungry guy.
But it’s not until you analyze the type of business that you really narrow down your probability for success. If you’re thinking about starting a restaurant, the failure rate is damn near 100%. From massive overhead, to managing people, to big upfront investment costs, owning a restaurant is a failure factory. I’d put your odds of success at 1/100.
But let’s say you want to start a service business like I recommend. I don’t recommend starting a service business because it has the highest profit potential, or the best scalability, I recommend it because it has the highest probability for success. Outside of myself, the only guys I know with successful businesses are guys who sell services, with three of them making six figures online including my man Phil Hawksworth.
A service business has a higher probability of success because you have low investment costs, low overhead and no employees to manage (unless you choose to bring them on once you’re already successful). The lower your business expenses, the less chance of going under. Therefore I’d cut the business failure rate in half and put your chances of success at 1/5.
Those numbers of course are extremely crude, but you get the idea. You can’t always see the odds until after you’ve been through it, but it’s really important to put your best guess together to determine if you’ve got a shot at getting what you want.
Now that you’ve got the raw probability data, you need to factor you capabilities into the equation. The difference between probability and capability is probability just deals with the raw data of success, whereas capability factors in your specific skillset and dedication.
In mainstream personal development, you hear a lot about limited beliefs, and how you shouldn’t have them. This is important, if you think janitor is the best you can do, but if you’re already a positive guy, it’s just as important to limit your beliefs.
Unless you’re 16, exceptionally talented, and 6’7, you’re not going to play in the NBA, no matter how positive you think. The truth is, more often than not, when you shoot for the moon, you don’t land in the stars, you fall flat on your face.
I’m talking from experience here. Unlimited beliefs cost me a lot of time and money. I used to think I could do anything, but life taught me otherwise. And life is the best teacher.
It wasn’t until I evolved from a deluded optimist to a pragmatic optimist that I got my life together. You can dream big, but just as important is to dream realistic with manageable, actionable goals to get you there.
A true player in the game of life understand both his strengths AND his weaknesses. And he only plays for position in areas where he has an unfair advantage.
To maximize your chances of beating the odds in the game of life, capability needs to be a major factor in every decision you make.
The key questions to ask when determining your capability to achieve what you want are:
- Do I have an unfair competitive advantage in this area?
- Do I have the dedication and skills to be top 1% in this area?
- Do I have the dedication and skills to be top 0.1% in this area?
Let’s say you want to start a service business. And you know how to sell, or are willing to learn, and you know that you have the tenacity to make it happen. But you’re not sure what service you want to sell. And you’ve got real estate, insurance, programming, web design, or personal training as your options.
The smart move is to pick the skillset where you have an edge. If I tried to compete in programming I couldn’t make six hundred dollars let alone six figures. But fitness is something I’ve been passionate about and styuding since my teens and therefore I’d have a competitive advantage in that area.
With that said, capability isn’t just about skillset, capability also means dedication, drive, and energy. Any major decision has to factor in not only your skillset, but whether you’re willing to do whatever it takes, for as long as it takes, to make it happen.
And this is where you really need to be honest with yourself. If you want to be the next Elon Musk you need to be prepared to spend the rest of your adult life working 16 hour days. I wouldn’t be able to do that, even if I had his IQ and business acumen, which I don’t. All I can do is tip my hat to a guy like that and get on with my business.
Capability is harder to quantify then probability, because you can’t back up your own instincts with raw data, but it’s important to do the best calculations you can in making any major decision to slide the scales in your favor.
4) Opportunity Cost
Opportunity cost, in its simplest form, means the cost of not doing something else. Everything you do has an opportunity cost, that’s why it’s very important to make sure your major decisions are the best opportunities you can possibly choose.
Let’s look at the decision of monogamy vs. living the player lifestyle and vice versa.
So what does monogamy cost you?
Firstly it costs you sex with other women, the thrill of the chase and a good chunk of your personal freedom. Monogamy usually means at least three nights of your week are accounted for and you’re going to have to make a lot more joint decisions. It also means you’re going to spend a lot more money than when you’re single (women are expensive).
And unless you’re already experienced with girls, monogamy also costs you the ability to learn how to get good at picking up women.
So what does the player lifestyle cost you?
The player lifestyle costs you the ability to bond with a woman at a really deep level. I’ve had some strong bonds with some of my MLTRs but it’s not the same knowing she’s probably out there getting pounded out by some other dude. Ultimately, either consciously, you’ll always hold a bit of yourself back in a non-monogamous relationship.
Ultimately it comes down to where you are in life. If you’re 19, with a high sex drive, and inexperienced with women, monogamy will cost at least a few years of going out, having fun and getting good at pulling girls. The opportunity cost might not be worth it.
But say you’re 34 like me, and you’ve done all that, and your sex drive has calmed down a bit, sacrificing the opportunity of having other women might be the right move in exchange for the love and support of a good woman.
I haven’t been monogamous in the last few years, but I’m still open to the idea, with the right girl. My man Blackdragon will never promise monogamy and makes some very good points as to why the opportunity cost doesn’t add up. But truth be told I’m still undecided and playing it by ear. I’ll probably solidify my position within the next five years.
With that said, at the end of the day it’s up to you to analyze the opportunity cost on everything you do, and make sure that you’re devoting yourself to the best possible opportunities you can.
ROI or Return On your Investment, is the reward you get for the effort and resources you put into any decision. ROI is similar to risk vs. reward, except risk is focused on your downside whereas ROI is focused on your upside.
ROI is of course crucial with anything financial related, but ROI also applies to all areas of your life. And the best way to measure ROI is with your happiness, now and in the future. Because happiness is what we do everything for. Money, cars, clothes, women – all the stuff we pursue is to make us happy.
So let’s say you want to have kids. Now I know that looking at having children through the lens of an investment decision sounds barbaric, but keep in mind that knowledge is never evil, it’s only evil when used for evil purposes. I think it’s much more evil to bring lives into the world without proper preparation.
Having children, like anything, should be looked at on the basis of your own personal happiness. Everyone pretends like they have children out of altruism, but that’s straight bullsh*t, people have children because they want them. Not for “society”, or “the community” – everyone acts in their own interest at all times, no matter what words come out of their mouths.
So, let’s say you think children will enrich your life, and you’re planning on having two kids like most people do. The cost of raising two kids for 18 years in North America is about $500,000. But that’s just your financial investment.
You’re also looking at 40 or so hours of hands-on parenting time, that’s a full work week on top of your job or business. Also, you’re looking at a ton of emotional energy that you’re going to need to invest to raise two stable, happy, well-adjusted kids.
As you can see from even a quick analysis, having kids is by far, one of, if not the most significant investments of your life.
For me to justify having kids I’d need to know that having kids would have a huge return on my happiness, at least 20% a day. I’m realistic enough to know the first years would be flat or even lower because of the lack of sleep and insane work it takes to raise a baby. But after the kids reach five I’d have to know that my happiness level would be a lot higher than they are now to justify the massive investment.
Now, ROI in this scenario is really difficult to calculate. This is because no parent will ever tell you they regret having kids, it’s the ultimate taboo in our society. I’m sure that most parents really love their kids, but I’m not convinced they’re happier than when they were childless. When I look around I don’t see a lot of ecstatic parents, I see a lot of stressed out, overweight people shuffling their kids to soccer practice.
The most honest assessment I’ve found, is again from my man Blackdragon, who has two 18 year olds. He loves his kids more than anything, but is honest enough to say that having kids markedly lowered his happiness levels.
For me the decision is still up for debate, and I plan on doing a lot more homework and letting my married friends beta test having kids before I even think about pulling the trigger.
With that said, you might see things differently than I do. The important thing is that ROI is a major factor in all of your major decisions.
At the end of the day, life is not a trial run. There are no cheat codes, restarts or do-overs. Every major decision will have a major impact on your next decade, some of them on the rest of your life. And life doesn’t accept excuses because you didn’t know the rules. Life burns the baby who doesn’t know better just the same as the college professor who does.
That why you need to put serious thought into every decision or suffer the consequences. But it also means that when you make the right decisions you get to reap the rewards. And the ultimate reward is a life with as much consistent happiness and as little suffering as possible – which is exactly what I wish for you.
So follow the gameplan, do your homework, and do your best to make as many right decisions as you can.