One of the most important career lessons I’ve learned is to pursue a career and not a job. At first glance, you might think, “What’s the difference?” I also didn’t get it for years.
That’s how I finally ended up in an IT job that I wasn’t passionate about. At one point, I was reflecting on my career and life by writing in my journal and thought, “How on earth did I end up in this job?”
What’s a big goal or dream that you have? Do you want to start a business? Become a fulltime author? Travel the world? Become financially independent? Change careers?
I bet you’ve thought about it, and at some point thought, “I’m not sure I can achieve that.”
If you’re anything like me, you always think about risks that are involved with making a big move in life. And that’s not a surprise. We’re collectively risk averse. We truly hate risk. I’ve never met someone who said, “I love to lose everything!”
But what can we do about our risk aversion? If you think about it, most of us are put off by fear. You think of doing something, consider the risks, and decide not to do it. Here are some examples.
What makes a good decision? When I ask people that question, I often get answers like:
“When the outcome is successful.”
Why is it that we, as a society, romanticize outcomes? Only things and people that succeed are celebrated. Just look at all the articles and books that idolize successful people. And to a degree, that’s obvious.
But it’s also misleading. We tend to overlook cases that did not come with a successful outcome. And when we do look at failure, we are often quick to explain why things failed.
In hindsight, we can all look at mistakes and say that it was imminent. But if preventing mistakes is that easy, why are we still make decisions that we regret?
I’m not hungry for money. Compared to several years ago, when I had less money, I still have the same life.
I wake up, drink my freshly brewed coffee, read a good book, and then start working until about 3 or 4 in the afternoon. Then, I put on my shorts and t-shirt and start working out.
Sometimes I listen to music during my workouts, and sometimes I don’t. After working out, I have dinner with my family. We watch a TV show or movie after we eat. And then, I get back to working or reading.
You see, it doesn’t take much money to live a good life. Benjamin Graham, one of the most respected investors of all time, once told his apprentice:
“Money isn’t making that much difference in how you and I live. We’re both going down to the cafeteria for lunch and working every day and having a good time. So don’t worry about money, because it won’t make much difference in how you live.”
Example of how Price’s Law works in a field/company with 100 people
At my first sales job, I had about 25 colleagues who did the same work. After the first month, I noticed something peculiar.
Only 4 of my co-workers brought in more than half of the total sales. I was 17 years old at the time, and I had no idea why that was. These folks were the superstars on the floor — the untouchables.
Little did I know that this relation holds true for almost everything in business. It’s called Price’s square root law, and it originates from academia.
Value Creation Is Not Symmetric
Derek Price, who was a British physicist, historian of science, and information scientist, discovered something about his peers in academia. He noticed that there were always a handful of people who dominated the publications within a subject.
Price found out the following (now called Price’s law):
Do you ever look back on your decisions and think, “Why I on earth did I do that?”
We all make bad decisions.
- Buying an SUV that sucks up all your cash
- Starting a relationship without being in love
- Saying yes to a job that you’re not passionate about
- Creating products that no one needs
Shit happens (the above examples are all about me). But the funny thing is that bad decisions never seem like bad decisions in the moment.
I’ve been reading about the decision-making process of Warren Buffet and Charlie Munger, two of the most successful investors of all time.
In Alice Schroeder’s biography of Warren Buffett, I read that Buffet and Munger have a learning strategy that’s based on what you should avoid doing. They identify mistakes and do their best to avoid those mistakes.