7 Things That Self-Made Billionaires Do Differently - Deepstash

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7 Things That Self-Made Billionaires Do Differently

https://medium.com/accelerated-intelligence/8-things-that-self-made-billionaires-do-differently-26399196feb3

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7 Things That Self-Made Billionaires Do Differently
Fascinated by this question for my whole career as a serial entrepreneur and writer, I've read more billionaire entrepreneur biographies than I can count, researched what they have in common, and met and interviewed several. Without a doubt, luck plays a central role.

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Using Decision Trees

  • Understand the different outcomes that could happen (both positive and negative)
  • Calculate the expected return or loss of each outcome
  • Attach a probability to each outcome
  • Understanding the magnitude of the return or loss
  • Multiply the probability by the magnitude (probability of winning * value of win) — (probability of losing * cost of the loss)
  • Add up and subtract all of the expected returns and losses
  • To get started you don’t need to know the exact probabilities. Just following the process will give you unique insights you wouldn’t have had otherwise.

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Use Decision Trees 

Elon Musk uses decision trees to make big decisions (a tool that uses a tree-like graph or model of decisions and their possible consequences, outcomes, and resources). They are particularly useful for avoiding stupid risks and big bets that aren’t likely to succeed.

Most became a billionaire by making unlikely big bets, as their expected return statistically was much higher than safer bets.

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Build Deep, Long-Term Relationships

One of the best ways to get information is not from just being better at searching Google, it’s from learning how to build a network and get the information you need through that network. 

This network should include people’s lessons learned and hacks, topics that are too sensitive to talk about because they make someone look bad, and tacit knowledge (knowledge that people have but aren’t able to articulate).

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Use Storytelling

Having a powerful vision is essential for all entrepreneurs, but if you are going to excel, your stakeholders need to buy into your vision.

Storytelling is a learnable skill and can help you transmit your vision to such a degree that others feel it’s inevitable and critical. Great stories transport people into another world and, in doing so, alter their beliefs, evoke emotions, and significantly reduce their ability to detect inaccuracies.

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Invest In What Will Not Change

Become the best in one core area by continually investing in it over time, rather than jumping from trend to trend and starting over each time.

To apply this principle to your business, identify a core customer need that will likely stay the same (even as technology and culture evolve) to which your company is uniquely positioned to cater, and build your company around it.

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Developing An Analytical Advantage

Your analytical skills have to be honed in and this involves frequently brainstorming, preparing for worst-case scenarios and working around your own limitations.

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Developing An Information Advantage

  • Get close to people who have accomplished what you want to accomplish. 
  • Learn from other fields and bring insights into your own to find unique perspectives.
  • Build a lab, not an experiment. The more experiments you make the more you learn.
  • Be good at pulling out the wisdom of others, as many are not able to articulate how they succeed.

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Standing Up Against The Herd

We are wired to want to fit in socially, meaning not going against the flow. But courage is a skill that can be practiced by doing little things that cause you to feel uncomfortable and socially awkward, but with zero real negative impact.

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Think Independently 

Doing what everyone else does is going to bring you average results. 

Whenever you’re betting against the consensus there’s a significant probability you’re going to be wrong, so you have to be humble, seek out and understand relevant information and learn to analyze things differently. 

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Checklist To Avoid Stupid Mistakes

  • Brainstorm as much as you can to avoid availability bias (choosing the first solution that comes to mind rather than the best solution).
  • Test as many potential solutions as you can afford to. This avoids the confirmation bias of rationalizing the one solution you chose.
  • Evaluate the criteria for each experiment. 
  • Learn from every experiment, successful or not. 

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Use Checklists To Avoid Stupid Mistakes

Warren Buffett attributes a large part of his success to consistently avoiding preventable mistakes by religiously following basic tenets and ideas he knows will work.

To counteract the often negative influence emotions can have in investment decisions, Buffett uses several checklists, including ones for investing, problem-solving, and psychological biases.

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Analyze What Can Go Wrong 

Things constantly go wrong no matter how smart and hardworking you are. So, continuously and methodically consider ways a plan could go wrong and plan how to avoid each obstacle.

Make a list of how to fail, so you will be prepared when roadblocks come. Apply this principle by listing the ways the project could fail by probability and prioritizing actions that can be taken to avoid failure.

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SIMILAR ARTICLES & IDEAS:

“If something is important enough, even if the odds are stacked against you, you should still do it.”

Elon Musk

Hustle Early In Life

Elon Musk (Founder Of Spacex, Tesla Motors And Contributor To Paypal): Musk, at 12 years old, taught himself to code and sold a game he made for $500. When he moved to Canada, he worked odd jobs including tending vegetables, shoveling out grain bins, and cleaning out gunk from a boiler room in a lumber mill.

In university, Elon sold computer parts to make extra cash and turned his 10 bedroom fraternity home into a nightclub on the weekends and charged a cover. Since then, he’s built several companies, including SpaceX, Tesla Motors, PayPal, and zip2.

“It’s important to be willing to make mistakes. The worst thing that can happen is you become more memorable.”

“It’s important to be willing to make mistakes. The worst thing that can happen is you become more memorable.”

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Read For Immediate Rewards

Studies show that there’s correlation between human behavior change and immediate rewards. Receiving immediate rewards releases dopamine in our brains, which compels us to seek mor...

Use Triggers to Your Advantage

We often start habits and drop them a few days later. To combat this, you can use triggers to remind you to practice the habit. Examples of triggers:

  • Reading at the same time everyday will prime your brain to automatically trigger itself to begin reading.
  • Leaving your books in places you will easily see is another trigger. If you read books digitally you could pin your tab so it’s always in your visual perspective.

Stop Before You’re Finished

Studies indicate that the Zeigarnik Effect is real. It says you are more likely to recall uncompleted tasks than completed ones.

Knowing this pattern of our brains, we can trick it by forcing cliffhangers when we’re reading books. It’s hard to stop reading in the most interesting part but it will make you want to start reading again.

Charlie Munger
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time ..."

Charlie Munger

Learning is an investment

Benjamin Franklin said, “An investment in knowledge pays the best interest.”  It's the reason Warren Buffett (& other successful individuals) spends 80% of his time reading. 

Automatization Problem

People at the bottom of the economic ladder are being squeezed more aby automation, while those at the top have more opportunities and are paid more than ever before. 

The irony is that the problem isn’t a lack of jobs. Rather, it’s a lack of people with the right skills and knowledge to fill the jobs.