Long-Term Thinking, 2nd Order Consequences & Effect Horizons

every one sim ovens here and in today's video I want to talk to you about long-term thinking second-order consequences and time-based decisions and basically you know I want to have a conversation with you about time because you know the thing about money is time and in business the one variable no one seems to account for and the one variable that has the most profound effect on your success your company's success and in everything it's time yet nobody seems to pay any attention to time and the number one cause of business failure this time and like

you know pretty much everything to do with business in life is to do with time and human beings are just they just naturally suck at dealing with the concept of time and playing with and optimizing and making decisions when it comes to any equation which includes the time variable and so in today's video I want to show you how I think about time and how I use time not as an enemy but as a friend as a friend to help me make money as a friend to help me take out competition and as a friend

to help me build competitive advantage wealth and a company that that lasts over the long term so probably the biggest mistake I see entrepreneurs and business people make is it's just short term thinking and short term thinking is basically that it's instant gratification you know short-term thinking is well I want to have a better today at the cost of tomorrow you know it's it's basically you know pretty much everything bad for you is short-term thinking so let's take a look at debt so debt is basically enjoying a better today at the cost of tomorrow so

you can live better today you can buy light that 42 inch TV today then you can start watching it or you can buy that Xbox today you can start playing but you'll pay for it tomorrow and later on down the path you know that's gonna whip back around and bite you in the face and hard and most of the time it's not worth it but what people do is they just kind of brush it under the rug and they just forget about it and same thing with like fast food it's like I want to have

a burger that tastes real good right now but at the cost of you know my health and potentially shaving years off my life tomorrow or exercise I don't want to sweat and work hard now I just want to lie and lay down on the couch and be lazy now at the cost of heart disease tomorrow alright and you know no matter we look the the relationship between time and decision making and benefit and all of that is generally things that are good for you they kind of suck right now and the good for you in

the long term and the things that are bad for you is they're kind of awesome right now but they're really bad for you in the long term so it's kind of like an inverse relationship you know and you have to learn in life in a business to choose between these two things like what people don't understand is that you know their business and their life and everything is made up it's the sum total of all the decisions that they make and you make hundreds thousands of decisions every single day and whenever you're making these decisions

you you always have the option between short term or long term alright and what I see more and more often is people taking the short-term path and we see this this is prevalent right now in 2018 with social media and things you know if you post on Instagram or whatever then you get a bunch of likes you know then that's kind there's a dopamine spike and so you're training your brain to appreciate that loop do the section get this instant reward slash chemical in my brain that feels good do it again and it's reinforcing right

that's a instant gratification feedback loop and it's to do with dopamine is very addictive the same way slot machines and everything are addictive and you know once you get hooked on that now you need to find that everywhere in life and so you know you'll want fast food you'll want instant business results which basically don't exist and you'll want everything instant now and you'll become an impatient person and you'll basically end up suffering horribly in every way shape and form in every different facet of your entire existence however on the inverse of that is long

term gratification and so you know if we go to the gym now it's kind of sucks now we got to sweat and work hard but in the future is great if we eat healthy now it's not they're tasty right now but in the future it's great if we read books now instead of playing xbox it's awesome right it's not that awesome right now but in the future it's great if we save money not that awesome right now a future great so you get you get my point yet like things that are good for you things

that are good for you immediately be careful of them but things that kind of suck a little bit in the beginning but a good for you later on those are the things that you should be doing the more of them you do the better and you have to train yourself to become this way and you have to always think to yourself like am I going to take the electric wheelchair path which is what I call the easy way or the hell and the hill is the big gnarly thing you don't really want to do and

there is an easier path the wheelchair part but if we take the hill then if we keep taking hills before we know it we're winning and we've got competitive advantage and we've taken over our market and we're making a killing and also if you take the hill psychologically and biologically - then you're going to be fitter healthier happier and all of that so always think to yourself you know am I going to take the wheelchair path or the hill take the hill and am I going to take the short-term payoff or the instant gratification or

am I going to take the long-term payoff and take the long-term now that's basically long-term thinking and if you do that it'll change your life completely it's a very simple thing to do and it's it's payback as a mince and you know it'll help you in every way shape and form there's no real argument against it so that's a good tip but now let's talk about some more advanced stuff to do with time especially time in the context of business strategy and in making decisions within your business so one thing I see with business owners

and entrepreneurs and CEOs is they are very bad from number one is that they don't understand like the long term thing right which is so simple it's like elementary stuff and to drive that point home even more there's actually this psychological experiment that's well documented you can look it up and it's called the marshmallow experiment and basically what they did is they got a group of children together young children like four or five years old or something and they presented them with two options option one was to have one marshmallow and you could eat it

right now an option number two was you could get two marshmallows if you waited for a period of time and what happened is you know a lot of kids most kids they just chose the one marshmallow right now in a real small group of kids they chose to delay that and they chose to get two marshmallows after a period of time now what's fascinating here is two things first thing is that most people chose the instant gratification which I'm totally not surprised at I mean just go look outside your front door and you'll see this

it's privileged everywhere and but the second thing is is the more interesting thing and that is that they tracked these children over the course of their life and they measured them in terms of success not just financially but in the light their health their income their happiness their like family their family life and their fitness and their everything so they tracked them on a basket of metrics which together represents like success which i think is quite accurate you know they weren't just measuring them on wealth because obviously there's more things to success than just wealth

right so if you're thinking that they had a basket of things and that P the children that the children that delayed the gratification and chose to wait some time before getting to marshmallows they did better in life way better and the kids that went for the instant gratification and then one marshmallow now they didn't do so well and so this is this thing is true and it's true for everything it's one of those universal laws you know like it's it's not just something that applies to business it's not just something that applies to how for

your apply it applies to everything literally everything and so if you just build this one thing into your into your worldview and your you know your heuristics of making decisions then it can't like you're going to have a bit of life so make it a priority and do it but like I said earlier the the second thing I wanted to talk to you about was time in the context of business and really the thing that I see people that are terrible at like CEOs entrepreneurs business owners and I'm gonna draw this on the whiteboard is

it's something called second just make sure you can see this second-order consequences all right so you can see there so this is something that nobody understands in actually I shouldn't say nobody because obviously some people understand this thing but almost nobody by 99.9 percent right they do not understand this even business owners who are making money they don't understand this and if you don't know what a second-order consequences then you obviously don't know what it is right so you should pay attention right now if that's you and what seeking order consequences are is you know

when we make a choice or a decision there is you know the things happen things change right and so there but those decisions like those you know those actions they create reactions and then those reactions create actions which create reactions and it keeps going all right keeps going overtime and it feeds back on itself and it goes exponential all right and so this not only not only is this second-order consequences but there is third order consequences for thought of consequences for thought of consequences all the way like to infinity basically but most people and especially

actually it's it's most people in everything if there are human they're doing this and well if they're human they don't know what this is and they're making this mistake and so most people they only think about the first-order consequence because they're it's just the easy thing to see all right and so what this is is they may give you an example let's say you know I want to buy a 42 inch TV and I don't have enough money for it and so I buy it using debt at a high interest rate because my credit rating

sucks because I've been doing this sort of dumb for four years and I haven't learned my lesson right and so let's say buy this TV and you think oh it's not that bad I just got some interest payments like that's all you can see as the as the first-order consequence but that comes and creates something else so now that you've got this TV in your house it's not only is it bad that you've spent money you didn't have and that you're now in debt and you're going to have to face that debt in the future

but now you have this TV in your house and in order to get any sort of satisfaction from this TV you just pour you just purchased you're gonna have to watch this TV and so now you're watching this TV and now you're wasting your time and first of all you already wasted your money that you didn't have that you're paying ridiculous amounts of interest on but now you're wasting your time watching this damn thing right so let's say first decision here at this block in the chain let's say here we buy TV with debt right

now the second order consequence is that I'm going to be watching TV and here I'm wasting time now what's going to happen is now that I'm watching TV wasting time and I'm in debt which already is bad now what I've done is I've trained myself psychologically to be lazy and now what's going to happen is whenever I come face to face with some hard work or some challenges or something I'm going to be more disposed to to taking the lazy path and just forgetting about it all right and so now the third order consequence is

that pattern of lazy behavior repeats over time right and so already you can see that a small decision that we thought wasn't that bad because we're just gonna have to pay a bit of interest right and we might think oh well it doesn't matter because I might be getting a pay rise next year or something like that right so most people they just look at this they just look at the first-order consequence but they just they can't even see the second one which is sorry it's a bit wonky here they can't even see the second

one which is that they're gonna have to watch the TV and waste time and they can't see the third one that this pattern of behavior is going to become their new mode of operation and it's going to ruin them and also it's going to become their new mode of operation when faced with the decision where it looks like this where if we can have a better today at the cost of tomorrow then we should go with the better today at the cost of tomorrow's so you know in so many different ways this one thing that

looks trivial and small screws us royally and you know I see people do this all the time I see people do it with like fancy cars I see people do it to themselves with like choosing to fly on private jets and you know if you if you choose to fly on private jets and you've got more than 100 million dollars in your bank account sure go go for it right but you know if you if you have less than like a hundred million dollars in your bank account and you're constantly flying on private jets you're

you're an idiot because not only is that a waste of money is a poor use of money but second of all you're now training yourself to what to like expect this level of luxury and if you expect this level of luxury it's very hard to go back all right it's hard now to go back to it so you're probably going to continue this habit of behavior even when it's probably not the best best thing for you to be doing even if your company starts making less and you start having less money you're still going to

keep up this pattern of behavior and you see people get into these vicious loops all the time like you know they keep buying cars and they keep upgrading their cars or they keep buying clothes and they have to keep buying more clothes and you see it with you know it's you see it with addictions to like people who drink alcohol there has to be stronger alcohol more often more frequent and you see it with social media you see it with everything right and it's it has a really harsh consequence and most people can't see past

to just the first thing and in business you need to get real good at spotting this and to really drive this point home you know I guess that the example there about the 42 inch TV there's more of a personal thing than a business things let me give you a business example and if you want to see like stupidity on a mass scale and not understanding second-order consequences in short-term versus long-term thinking on a mass scale then you need to look at the story of Valiant VA l IA NT it was a public company and

it was like the hottest company in the world until it wasn't in a failed like in a big blowup kind of explosion way and the story is real fascinating and so what I'll tell you what real quick I will just synthesize it and give it to you and in like his shorter amount of time as I possibly can but the sky like informed this company called valiant it was a public company on the stock market and what his strategy was was to buy up pharmaceutical companies so like companies that were making drugs and what he

noticed is that pharmaceutical companies like they were huge most of their expense goes into R&D research and development and what is R&D well it's basically just like a bunch of scientists in a laboratory experimenting and looking at new possible you know mutations of their existing drugs improvements to them or potentially completely new lines of drugs right and a lot of R&D is unsuccessful like a lot of R&D funds in as Andy's very expensive a lot of it goes to waste because you know experimentation is is like an inseparable twin from failure and so you know

if you're going to invent something you're going to fail a lot those two come together but it's worth it in the long term and so what this to did is he looked at these pharmaceutical companies and he thought well if I buy these pharmaceutical companies and I just cut off the R&D department I'll save like 40 percent on expenses their forty percent i save will go straight to the bottom line in terms of net profit and then I'll be making way more money and I'll just roll all of these different pharmaceutical companies into my investment

vehicle core Valiant and cut off R&D and all of them and then I'll have spectacular earnings and net profits that investors will love because you know investors are like drug addicts they they love net profits and they love growth and they love earnings and so if you keep showing them that like the keep showing you love in the form of a highest higher stock price and so that was a strategy and so he did that he started buying up all of these pharmaceutical companies rolling them into valiant his vehicle and then cutting off R&D departments

saving huge amounts of money in terms of cutting expenses net profits went through the roof and then and like his his his financial statements in his his earnings reports they looked spectacular and so this guy became like that God of of business and he got a private jet and then he started sitting front side and basketball games and he basically became a celebrity and he became famous not for really inventing drugs but for basically just having a fancy private jet and knowing a lot of celebrities and sitting courtside at all sorts of basketball games which

is kind of funny whenever CEO is known for that you know they're about to fail and so he continued to do this and it worked for a few years I think it worked for like three or four years right and then what happens so then all of a sudden it just collapsed the whole thing blew up spectacularly and just went bankrupt and investors lost everything all right why so just think to yourself for a moment like why would that have happened where did this dude go wrong and this is short-term thinking and not understanding second

order third order consequences right like and it's not that hard to think about this so if you cut off the R&D departments it is obvious that today you're going to make more money that how could you die oh that's obvious you know if we cut 40% of our expenses and our income remains the same we are going to make a lot more profit then investors are going to see that and think we're doing something right and we're going to make a lot of money but what's going to happen with time you know time is the

thing people don't understand they don't account for is the variable that blows people's minds but like does R&D not have a purpose why why would all of these pharmaceutical companies have an R&D department if it was if it was not necessary like why do they have scientists and so R&D typically costs a lot of money for a long period of time and most of it goes to waste but every now and then generally after a few years or whatever there's one there's a breakthrough and that breakthrough is typically a new drug a new like revolution

and that then is like the new product that the pharmaceutical company is able to release and they make a spectacular amounts of money from it and they're able to beat their competition and just just dominate that is the purpose of R&D and the short term R&D looks like a waste and the long term R&D is is the smartest thing in the world and so what happened with time is this like they had no new products and with this time when they had new product when they had no new products then it's pretty obvious what's going

to happen here and so sorry I've just had to let that cat out this is the sort of professional production value you get when you watch my youtube channel just might get up in the middle of it and let out a cat and so back to where we were was you know what happened with Valiant is they didn't come up with new products obviously because they spent no money in R&D they had no scientists then the competitors were spending money on R&D and they had scientists they came up with time with new drugs better drugs

then what valiant head in its companies and so the invariant couldn't keep up all the customers were buying other stuff they stopped buying valiant stuff and then valiant collapsed and the competitors dominated them and so this is just a really good case study in a really good lesson in long-term thinking and second consequences because that dude who purchased Valiant well sorry the dude who ran valiant and purchased all of these different companies and cut off their own D departments he was only thinking about the short-term and he wasn't thinking about second order third order consequences

he was only thinking about first order first order he makes more money he looks like a god second order he fails and looks like an idiot and you know he didn't see that one and it got him it flew back around and bit him in the face and I see this happen to people and business all the time and I know because I have overtaken many of them and what I see that's common among all of these people which generally fall behind is bad decision-making when it comes to time and second order consequences and what

these people do is they typically once they get good and they're winning they start spending a lot of money and when they start spending a lot of money they now have all of these toys and now they've got these toys they need to use these toys and now that they're rich they're famous and or semi famous and now they want to hang out and talk about how cool and famous and rich they're and how many new toys they've got right and then very quickly this person has forgotten what actually created all of the stuff right

they forget that the hard work and the frugality and working on their craft is the original like source thing that created the wealth that created the things they could buy that created the fame that created the ability to talk about how cool they were they forget about what created it and now they spend all of your time screwing around with all of these things that are just a like fifth order consequence byproduct of this original thing and so now the original thing goes away and now they're busy like neglecting the original thing focusing on talking

about how cool their and then it disappears and then they can no longer talk about how cool their because it's gone and this happens all the time like this is a pattern that exists through history since the beginning of time it's how like Empires and civilizations fall it's how like great companies fall it's basically how everyone makes a spectacular mistake and blows stuff up and so you can never forget this you can never forget like what the main thing is you must keep the main thing the main thing and the main thing is always going

to be in business the product or the service that you're delivering to your customers or if you're an athlete the main things going to be playing basketball and being the best winning right and so this happened to Michael Jordan - I've watched pretty much all of his documentaries they're great the one I'm going to reference right now is called Michael Jordan to the max it's really good you should watch it and he said that like in one point of his career he got really who's the best in the world right and he had all of

these sponsorships so he was doing all of these ads getting all of these photos with all of these products going out and doing all of this cool stuff because everyone who was famous in the world wanted to hang out with them and very quickly he just got overloaded he it just became too chaotic and he started making errors in his game and he sat down and he thought to himself like you know all of these things they're byproducts of being the best and if I let these byproducts distract me from the thing that created these

byproducts they're not only am I going to lose and not be the best but then everything that I'm distracted by is going to evaporate and disappear - so he was like this is a really dangerous trap and so he decided at that moment to just black out like completely shut everything off he can't solve all of his sponsorships he stopped doing media interviews everything he just said no - everyone told his agent I don't want to talk to anyone about anything I don't want to do any sponsorships I don't care how much money they're paying

no and then he just shut off everything and then just focused on the game and then he climbed back up to be the bass player of all time and you know he was one of the smart ones he was able to see the second-order consequences and he was able to analyze the time variable and his decisions and you know he was he's an example of doing it right right there's more examples of people doing it wrong like the Valiants example or that dude I was talking about before who bought a 42 inch TV was dead

alright and I'll tell you a funny story about this too when ever I move into a new place I just moved into this place here in LA it happened when I was in New York - I get like a new internet connection right and I typically get like the fastest best one I can because engineers pretty important ingredient for what I do and then pretty much all the time what comes with that fast internet connection is free cable connection to TV right with like a whole bunch of channels and the landline and all of this

crap and whenever I talked to the person on the phone that works at the company like what is it like Verizon or whatever this lady's like sir you know that if you get cable it's free you get like 250 channels or whatever maybe it's two and a half thousand channels I don't know and you know what you get it for free sir and also you get a landline for free she was like it would be stupid not to get this free cable connection and this free landline and I'm like look lady you don't understand it's

not free I don't want this do not put this thing in my house and you know what in fact you couldn't pay me to hook that cable up to my TV I was like you couldn't pay me to talk it in and she was like sue I don't think you understand it's free like why would you not get it and this is I was playing with her just to see because there's no way in hell I'm hooking their cable up to my TV even if you paid me to do it not doing it why because

I don't want to create any sort of thing in my house that is going to distract me and suck my time into something that isn't going to have like positive benefits it's thinking about the second third order consequences you know sure it's free to hook up this TV in my house to cable but what isn't free is wasting finite hours of my life in my existence watching TV right that is a cost and so the lady couldn't see that and so this thing is everywhere once you learn to see it it'll change your life and

you'll get way better at everything seriously there's not even an exaggeration it's when you get good at this stuff you get good at life and so that's why I don't even have a TV in my house when I move to this place in LA I went there was all of these TVs every I think there was five you know Americans are crazy and it also had cable hooked up to all five and so what I did on like the second day we were here I got a socket set and went around the house and I

took all of them down I'm not kidding you I took all the TVs off the wall with like a ratchet and then I win and put them all in a closet and just close the door and I was like good riddance to these things and then I disconnected the cable and then I got the landlines that were plugged in and I just unplugged the landline phones and just put them on the closet as well I just got rid of it eliminated it because the last thing I wanted to do was get distracted even for a

minute and spend ten minutes or an hour watching a stupid TV or like having the cable hooked up it's temptations that are going to lead you to dumb stuff so get rid of them right and so that's like thinking of the second third or the consequences and I challenge you to do this for yourself right now like think about not just what will happen if you make this decision and take the section but if you take the section what is that going to automatically create and then what's that automatically going to create and what's this

chain what is the chain of events that's going to unfold and start like developing and a lot of people don't understand this one like it you I see it all the time with books too and online courses and trying to do anything meaningful but if you read a book today you're not gonna see money appear in your bank account tomorrow and so people can't get the hit around there they're like why would I pay money to do a course why would I buy a book and then read it if I'm not going to make any

money and they just don't understand like they're like why would I pay money and then have to spend I'm doing something that isn't really fun to then not even make any money immediately and it's because you know these people have been conditioned to doing work by the hour or whatever and then getting paid so it's the instant feedback interesting gratification and when work presents itself and they have to pay to do work they're like well this looks weird scam you know like if I'm gonna have to pay to do work scam because I know what

happens in life is I do work to get paid so if they see the inverse of that it's obvious why blows the little mind and then when they see to that they're gonna have to pay to do work that then they don't get paid for immediately they're like this an ultimate scam right but these people can't think properly and so sure that is true in the short term but what happens in the long term well you get smart what happens when you smile well then you make better decisions what happens when you make better decisions

well you have a bit of life and you have more fun and you make more money because all you need to do to make more money than the average person is be smarter than the average person and therefore make better decisions than the average person so in order to achieve all of these things all we have to do is have something on the positive side that the average person does not have and one of the easiest ones of those to obtain is the perception and an understanding of time and decision-making right so long-term thinking second-order

consequences this is how you do really good and I'll give you something that's helped me a lot I'll destroy him it's whenever I'm thinking about a decision right I will think of like its effect horizon and like an effect horizon is basically you know let's say we have this this chart here and across here we have time on the x-axis and then let's say here we have like upside and what I mean by up sight is it's basically like positive results so that could be how Fitness relationships it could be financial it could be improved

product it could be anything right anything positive and then down here the inverse of this we have downside and so like an example of down so I could be dead an example of upside could be profit right in time well that could be like down here it could be like you know today this hour this minute the shorter we get and the longer we get along this axis we're gonna have like a month a year five years whatever right so you understand this simple model now whenever you're making a decision you want to just mentally

map this and well this is what I do in my mind whenever I think about a decision it just happens automatically because this has been practiced and trained but I'm looking at a decision and I want to look at what happens if I make this if I choose this option or that option right and if there's a decision with more than one option you want to really boil it down to its core options like which should you know most of the time is like two and you know if you've got more than five options then

you haven't broken the decision down into a small enough piece and you've got you're looking at a macro problem and you need to break the macro one into a micro piece and work on all the micros and in the some of the micro uses the macro which will give you your decision for that and so that's what happens if you can't partition the the thing the session into something that has less than or equal to five options right and so when you're looking at this what you want to do is let's say you've got option

a and it has immediate upside and then with in the short term and then with time it has like catastrophic downside like for for a long time right net1 got pretty long so doesn't do that and then this is option a by the way and this one looks like a typical instant gratification debt stupid decision right have you been it today get the 24 let me get the 42 inch LCD TV and the xbox complete with lots of games start playing it today satisfaction is big immediately about what happens with time as I get really

screwed and fail with everything and then option B is to would look like this they'd say it has immediate downside but then it has long-term upside alright we'll call this one option B now typically two options that are going to be the inverse of each other are going to look like this they're basically going to be mirror reflections of each other so if one has this sort of what do we call this pattern if this one is this sort of pattern then it's obvious that the inverse of this is going to have the inverse pattern

which is going to look like a mirror reflection on the other side and so what is the opposite of buying a 42 inch TV on dear today well it would probably be not buying that TV and instead starting to read some books right and this one has immediate downside in the in the perspective of the person making the decision because it's not very fun you know I'd admit it would be more fun for me to not to read a book and to just play xbox with my friends all day like today that would be more

fun and that I don't think that ever changes like I think some people think that people who are successful they're in business and they seem to have more discipline that they're just weird people that don't enjoy the same things that other people enjoy it's not true like you know I I prefer to eat if we're talking strictly in the short term I'd prefer to eat a burger and drink a full sugar rear D coke and a chocolate bar in some ice cream and just play xbox all day like this sounds like a pretty fun day

in the short term but what gets the people who don't make those decisions is the longer-term thinking didn't they think about it in terms of the long term and they're like I can't do that I cannot do that why because I'll get fat I'll get lazy and I will become broke and then I won't be able to do anything because I psychologically ruined myself and hooked myself on to instant gratification and I just can't do it all right and so that's why some people choose the other things it's not that they don't enjoy it they

do but they are more long-term thinkers and second-order consequence thinkers than the people who choose to do that thing in so let's say you choose not to buy the 42 inch TV on date and you instead use money that you do have so you don't go into any did to buy some books and you start reading them so it's not as fun today so there's some downside but with time you get smaller you start making better decisions you might start a business you might start buying some courses you might start you know creating a really

good product or service helping customers adding value to your market and then making money making more money and all of the stuff starts exponentially compounding on itself because as the chain of events like fires down like this right so let's say these are chains of events and we've got first second third fourth six order consequences right it's not linear so you might think that oh if you just if you just do the dumb stuff up until this point of time then you're only they're far behind it doesn't work like that at each node in this

chain down here there is feedback right and it looks like this it comes back and it feeds back round on itself and it has an amplifier of like let's say this is going to you know B ^ - alright and so it's got a feedback mechanism with an amplification and that's going to come back round and boost that and so you know let's say you have a a one here and then as soon as you make that decision you get out of two and then you know let's say you get another one here that's not

now three that's not how it works this thing now is going to start blowing up now you're going to get to like a six and then this is going to feed back round again and it's going to keep feeding back around and keep feeding back around and keep feeding back around and now it's going to go like 18 and it's say now it's going to go over 36 and then they say now it's going to go 78 and then 116 and then 3 34 right it's now going exponential and that's why if you look at

successful people there it's never linear you know it's always exponential and what I mean by that is your C born just like that and if you don't believe me just Google Warren Buffett's Warren Buffett's net worth over time all right google that and I'll tell you what I'll actually include the image the PDF beneath this video in the resources section for download just so that you you know if you're a lazy person you can just click the link and have a look but you'll see that his Warren Buffett most of his net worth and most

of his wealth was accumulated exponentially rapidly as a later point in time because of the way time works and so once you understand this like a small decision today by reading a book it's going to not be as fun as getting into debt and buying 42 inch TV and playing xbox right you're also not gonna make any money today but with time it's gonna grow exponentially and before you know it you're rich and you're making a lot of money and having a lot of fun in your waste matter right that's how it happened and once

you learn to understand this and see it this way you'll make better decisions and so you've just got to practice it you know like I wasn't born doing this like no one is and I was actually I made the the dumb mistakes and that's actually how I learned I would do things I didn't think about a 42-inch tv but I definitely did some dumb stuff like it's been a lot of money on alcohol and I would buy fast food and you know I would buy like a fancy car like a Ferrari instead of like I'd

look at money and I'd be like well I could buy a fancy car and look real cool like a Ferrari or I could invest that money back in my business hire some talented people if I do that then we're gonna do better make more money and then I could buy more cars if I wanted but why would I do that I would just put it back in and do it again and keep getting bit a bit a bit a bit better and then you don't even care about cars anymore because you can buy like a

car like a Ferrari in a day and so it's no longer cool alright and so that's what happens when you think about how this thing works but I wasn't that smart I bought the Ferrari and so and I didn't invest it my business and then I had to pay taxes and then drive this stupid thing and don't get me wrong it was fun but thinking about it now if I didn't do that no he took the smiler path I'd be way further ahead and as soon as I learned not to take that Dumber path and

take this motor path I started getting way further ahead right so I wasn't born like this nobody is I actually learned by making the wrong by doing the wrong thing and then learning what was right later but by watching this video and listening to this today then you'll be able to do the right thing and understand how time works how affect horizons work how time has like a logarithmic exponential function it's not linear and how there's generally two options a and B they're the end they're typically the inverse of each other one will have immediate

upside terrible shocking long-term downside the other will have the inverse which is which will have short-term downside in long awesome upside which is the good decision and option a is what we call the motorized wheelchair path this makes it simple and then option B is the the hill and you generally always come into these two you always face these decisions all the time and you always just got access to yourself to make it simple forget about this logarithmic exponential stuff because this might blow some people's minds if they haven't looked at these sorts of things

before so just think it think about it like this we all share path or the hill take the hill and if you keep taking hills then you'll learn to like the hills and when you learn to like the hills then you'll kick everyone's ass because they're all afraid of the hill in doing whatever they can to avoid it and you just want to eat the hill and when you start doing this you'll start winning big time and your life will be better and you'll be having wet much more fun so that's pretty much today's lesson

think about the long term think about how time works and how its exponential and take the hill not the wheelchair path and think of the second third fourth order consequences and don't be stupid like the guy who bought the 42-inch tv on debt or the person who started valiant and cut off the R&D department and then blew up all right don't do those things do the other thing instead and if you liked this video then just click that like button also let me know what you thought what you think in the comment section below leave

me something neat give me some feedback and click that subscribe button I release low-production videos like this but with high quality content once per week and you won't see fancy edits and you won't see you know like any real high production stuff you won't see actors or anything or really anything fancy at all it's just hot I'm holding my iPhone and I stopped in the middle of this video to let my cat out so won't be high production but I promise I'll teach you stuff that will actually make your life better so if you like

this video click that subscribe button and thanks for watching and I'll see you in the next one next week