No opinion, advice, or decision without personal risk

No Trust Without Skin In The Game


Gaining Benefit Without Risk

Julien Samson
Jul 22, 2017 · 5 min read

The other day, at work (I work in a grocery store), I had an argument with a friend. Something absurd like how much space a product in display had.

He was certain to be right and I was certain to be right. So he opened his wallet and bet 5$ on it. Without any doubt, I accepted his bet but he immediately stepped back from it, unwilling to risk 5$ for his opinion.

But then he asks me

“Are you willing to bet 5$ what you think is right?

I thought he was chicken for retracting his bet, but I was worst. I was unwilling to lose 5$ even though I was right. It was cheap talk and his instinct told him there was an unfairness in the bet (I could have gain 5$ while not risking losing 5$) making him step back from it. It was the right move to do for him.

This situation (and some reading I’d done recently) made me realize a few things

So many people are quick to form a strict opinion on complex matters but then are not able to form a strong opinion on a simple and straightforward argument.

If somebody is not willing to take risks for a decision, argument, or action he is about to make — thus facing the potential consequence of failure — then you shouldn’t listen to him.

I’m a hypocrite. I had no skin in the game. I was trying to gain benefits from the bet without a chance of losing it.

Skin In The Game

If someone has skin in the game then he has some form of investment (monetary, psychologically, physically, etc.) in a decision and has to face risks. You can be sure the person will do everything he can to avoid losing, or protect, his investment.

On the other side, if someone has no skin in the game then he doesn’t have any investment in the decision and doesn’t have to face any risk. You can be sure the person will either not care about the outcome — or the risk he creates for others— or do everything he can to profit from it.

Without skin in the game, there is no accountability.

Possible Situation

Here is 4 situation in which involving skin in the game could resolve the situation. There is probably more, but 4 is enough.

  1. Someone trying to add something to your life creating an asymmetry. Something like an advice, an opinion, a criticism, a course of action to follow, etc.
    Something you didn’t necessarily ask for. Something creating more confusion than clarity.
  2. Giving advice you don’t follow; opinion derived from explanation rather than deep understanding of the subject matter — explaining something you don’t understand.
  3. In an argument, where both parties think they are right with 100% certainty. (See introduction)
  4. Someone makes a decision for others which he can profit from but the consequence of his decision doesn’t involve him whatsoever.

Bet Or Make Them Bet 20$

A good way to add skin in the game to a person is to ask him if he is willing to risk 20$ (or more) for his opinion, advice, decision, etc. And ask yourself that question too before giving away unsolicited advice to others.

Are you willing to lose 20$ for what you are about to say?

If the person is not willing to risk 20$ for his opinion, then don’t listen. You know it’s cheap talk and valueless. If he is willing to risk it, then give him the benefit of the doubt.

If you are not willing to risk 20$ for your opinion, then don’t give your opinion. If you are willing to risk it, then don’t worry and give it away.

University & Poker Without Money.

My parent doesn’t pay anything for my university. They don’t lose money from it. They are not invested in it. Basically, they have no skin in the game involve because I pay for everything. So their opinion on how I should handle university should have no weight on my decisions — which can be hard because it’s my parent.

Playing poker without money involve sucks. Nobody takes the game seriously because they have nothing to lose. They have no incentive to play the game correctly because there is no risk of failure involve and no potential benefices for winning. Put 10$ each in the pile and the attitude will change drastically. Everybody becomes serious. Everybody is focused. Everybody wants to win.

A Few Reminders

  • Don’t listen to advice where the person who gives you the advice doesn’t lose anything from giving you the advice.
  • Avoid situations where there is asymmetric information. Meaning where the salesman has a certainty of outcome for selling to you and where you have an uncertainty of outcome for buying the product. You should both know the benefit in the transaction. Basically transparency.
  • Don’t listen to an opinion if there is no risk involved for the opinion taker like an anonymous troll on the Internet.
  • Avoid cheap talk.
  • Respect people who are willing to risk a lot for the opinion or their decision (except if the person is stupid and has no idea he is taking risk — like drinking/driving or texting/driving)
  • “Never buy a product that the owner of the company that makes it doesn’t use.” — Nassim N. Taleb
  • Video games without the risk of failing are boring and unenjoyable.
  • Financial independence by developing skin in your own game. Meaning you do not depend on one person to make money (salary), or one income for that matter. It will help you focus on a life you want instead of the life your family, friends, and society wants for you.
    It’s a risky business for you to depend on your boss, especially he doesn’t like you.

Never forget, it always applies to you too.


P.S. I would be ready to bet for this advice. I’m convinced people would stop spewing bullshit if they had something to lose spreading it in the first place.

P.S.S. This story was hugely influenced by Nassim N. Taleb upcoming new book. He shared many stories on Medium related to this concept which me interested in understanding the concept and how it can be applied in our day to day life.

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