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7 Things That Self-Made Billionaires Do Differently
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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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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
SIMILAR ARTICLES & IDEAS:
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“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.
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5. 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 more of the a...
4. 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.
3. 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.
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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.
Intellectual Capital
Knowledge is the new money. While goods and services are becoming demonetized and replaced by machines, knowledge is becoming increasingly valuable.
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Practice Discipline
Billionaires are often highly disciplined and set extraordinarily high standards for themselves and the people around them. Of course, they have lazy and unmotivated days but they don’t allow thems...
Commit To Routines
Routines and rituals are sets of habits that, when practiced consistently, lead to profound, long-term results. Most billionaire routines start early in the day and include exercising, reading and contemplating.
It doesn’t matter when you do your routine activities. What counts is that you commit to doing them — even when you don’t feel like it.
Contemplate
Billionaires love setting aside alone time. .. To think. They might do this by meditating or some other relaxing activity they enjoy.
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Never Lose Money
- Rule No 1: Never lose money.
- Rule No 2: Never forget rule No. 1.
If you work from a loss, it's much harder to get back to where you started, not to mention ea...
High Value at a Low Price
- Price = what you pay.
- Value = what you get.
You lose money when the price you pay does not match the value you're getting. For example, when you're paying high interest on credit card debt or spending on stuff you hardly use.
You gain money when you look for opportunities to get more value at a lower price: For example, buying quality merchandise when it is marked down.
Form Healthy Money Habits
Most of your behavior is habitual. You can change your habits and the earlier you start, the better.
Saving is a habit. Learn the habits of saving properly early. Pay attention to your money habits. Strengthen those habits that help your finances, and break the habits that hurt your finances.
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The Secret Sauce: Motivation
Successful and rising entrepreneurs have a key behavior trait that propels them towards their goals: Motivation towards that goal, the constant fixation in their minds to what they want to achieve....
Define your Purpose
Successful entrepreneurs know what they want in life, and what is the purpose of their existence. They have chosen a destiny and defined their purpose of living.
Everyday Motivation
Successful entrepreneurs have a system, a daily set of habits, a power routine that defines their work ethic, eventually defining the course of their lives.
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“....Of course, it is no use being a good storyteller if your product or idea is rubbish. But it is not enough to create a great product; you also have to work out how to let people know a...
“....Of course, it is no use being a good storyteller if your product or idea is rubbish. But it is not enough to create a great product; you also have to work out how to let people know about it.” - Richard Branson
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The five-hour rule
No matter how busy successful people are, they always spend at least an hour a day (thus five hours a week) learning or practicing. And they do this across their entire career.
Bara...
Read
Besides expanding your knowledge, reading can give you a good head start; this is often what your peers cannot obtain.
Even if you can't commit to an hour or more of reading every day, start with 20 to 30 minutes.
Reflect
The five-hour rule also includes reflecting and thinking. This could be just staring at the wall or jotting down your thoughts.
Focusing on the past gives you a chance to learn from mistakes you've made, as well as assess what you did correctly. As a result, you’ll be better suited to achieve your goals and improve your life.
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