Lessons From Self Made Billionaires

• 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.

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.

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).