18 Mental Techniques for Mastering Business and Life
James Altucher shares 18 mental techniques that he has used to become a master of investing, writing, and entrepreneurship.
James Altucher is an American hedge fund manager, entrepreneur, bestselling author, venture capitalist and podcaster. He has founded or cofounded more than 20 companies, including Reset Inc. and StockPickr and says he failed at 17 of them. He has published eleven books, and he is a frequent contributor to publications including The Financial Times, TheStreet.com, TechCrunch, Seeking Alpha, Thought Catalog, and The Huffington Post. - Wikipedia
Thank you James Altucher for being prolific. You’re ability to maintain authenticity at scale is truly remarkable. We’ve stitched together excerpts from a number of his articles where he explains rules he lives his life by. There are links to all of the full articles at the end.
Rule #1: LOOK AT ALL OF THE ‘CANDIDATE MOVES’
This applies to everything: games, business, relationships, everything in life.
I see it happen in reverse too many times. People think of a “what if” and then go way deep down analyzing that “what if” as if there was a 100% chance it would happen rather than an almost 1% chance it would happen.
In the 1950s classic chess book, “Think Like a Grandmaster” Alexander Kotov’s first technique is to: “List all the candidate moves first”.
In other words, list all the options that can happen. Don’t go deeply down ANY OF THEM. Then start to look slightly deeper down each one and see which options you can quickly eliminate.
It turns out, some 30 years later, this is how chess computers are programmed. The best chess computers are now solidly better than humans. The first thing a chess program does when looking at position: it lists the candidate moves.
Rule #2: DON’T TAKE TOO MANY RISKS
Games are all about taking risks.
But if you take too many risks, you always lose. In Backgammon, if you leave too many “blots” open, you will get hit, sent back to the bar, and eventually get blocked off the board and lose. If you play too conservatively, you’ll also lose.
This is true for business also. People say to me, “I have a great idea! Should I quit my job and just go for it?”
Do both at the same time. I was at my fulltime job for 18 months while pursuing my side business. By the time I left my full time job to be a full time CEO of my side business I had 11 employees.
I took a lot of risks in those 18 months. But I didn’t do anything that would risk losing the game.
Rule #3: LOOK FOR THE SHORT CUTS
Every game, and almost every life situation, has short cuts: ways you can get better without learning the entire literature of the game from beginning to end.
A great example is Scrabble. If you want to be the best Scrabble player in the world then it certainly helps to know all the legal words.
But if you want to be a better Scrabble player than 95% of the other Scrabble players it helps to know just two things:
- all the two letter words
- all the Q words without U: qat qopf qi qanat etc
and if you want to go one step further and be the coolest guy at the table, learn the six letters S A T I N E
Almost every letter you can add to those six will make a legal seven letter world. Example “E”. Etesian. “X” Antisex.
Rule #4: PLAY PEOPLE BETTER THAN YOU
When I was first starting out in chess, I would always find people better than me. When I first moved to NY I even moved in with a player much stronger than me at chess.
We’d play all night. I got better until finally I was at least as good as him if not better (we played a match once and when he was two games down he quit the match).
If you’re starting out in business, work first for a good company that has a high profit margin. This is a business run by good businessmen. Learn from them.
If you can’t directly learn from them, read from them. Study what they do. Break it down. Don’t wast time with the people who will bring you down.
Rule #5: STUDY THE HISTORY
Bobby Fischer was once an average, talented, young player. Then he disappeared.
For a year he studied all the games played in the 1800s. ALL OF THEM.
And he found improvements on each game. How the world champions of the 1850s could’ve played better.
Then he learned Russian. He started getting the Russian chess magazines shipped to him. He studied every game played by the Russians and their heroes. He found improvements in their games.
Then he came back.
He won every game. He became the youngest grandmaster in history. He became the first person to win every game in a US Championship. Not even a draw.
Rule #6: MASTER YOUR PSYCHOLOGY
“Failure” is the hip new word. People say, “you have to fail to succeed.” This is not true. Failure is the fastest way to becoming a failure. Instead, view everything as an experiment. Every experiment has problems. As Peter Thiel says, “Get good at solving hard problems”.
When something doesn’t work out, see how you can make it 5% better the next time. There’s always a next time.
If there wasn’t a next time. Warren Buffett would’ve quit investing in 1956. Or 1957. Or 1958. Instead, almost 60 years later, he’s still learning from the things he tries (and he’s made many multi-billion dollar mistakes even in the past decade) and then he tries to make the next situation 5% better so he doesn’t make the same mistakes.
Rule #7: PLAY THE CARDS IN FRONT OF YOU
The short cut in poker: don’t bluff. If you have a good hand, play it. Count on the fact that someone else will bluff and you will make a lot of money.
If you have pieces in chess that aren’t at their full potential (for example, there is a saying, “a knight on the rim is dim”) then “play your cards” by figuring out how to make that knight stronger in the next few moves.
Don’t go for a full out attack on the other person’s king when your pieces are not really in place for it. Too many people do that.
Just play what is in front of you. Improve incrementally and be PATIENT. You will have your chance to win many times. But you will lose ALL of your chances if you waste them.
Rule #8: A BAD PLAN IS BETTER THAN NO PLAN
Peter Thiel told me that on our podcast. He was referring to business. Guess what? Peter Thiel is also a very strong chess master and the saying “A bad plan is better than no plan” is a saying in chess.
Having a bad plan gives you several things:
- Realization that you need a plan
- Opportunities to see if that plan is not working
- Ways to analyze when the plan goes awry
- A chance to change the plan if it’s not working.
Having no plan gives you none of these opportunities to get better.
Rule #9: THE THREAT IS STRONGER THAN THE EXECUTION
Microsoft always announces software years before it’s done. This is called “vaporware” but nobody really knows whether or not there vaporware will become real or not so this often dissuades competitors.
H. Ross Perot used to buy up shares of a big company (for instance, GM) and start shouting how poorly the company was run and that he could do a better job. He wasn’t really going to take over the company but many people thought he was because of his “threats” and they would start buying up shares.
Then he would sell his shares after they had run up significantly (or a company like GM would pay him off in a process called “greenmail”) and he would make a lot of money.
Rule #10: THE 1% RULE
Nothing is going to change for you tomorrow.
Diets don’t work tomorrow. But every diet works.
Habits don’t change in a day. But 1% a day makes every habit work. Every. The reason is: they work if you do a little each day. If you relax and give yourself permission to only improve a little each day, then a good habit works. It’s permission to improve. It’s also permission to fail. Because when you first start something, you’re on day one.
Improve a little each day. It compounds. When 1% compounds every day, it doubles every 72 days, not every 100 days. Compounding tiny excellence is what creates big excellence. You can’t be a master in one day. You have to improve a little every day. Picasso created 2 works of art a day. That’s 50,000 in a lifetime. It adds up.
Rule #11: IDEAS ARE THE CURRENCY OF THE 21ST CENTURY
Ideas and skills will propel you to vision and purpose…to success and freedom.
- Write ten ideas a day to exercise idea muscle (it doesn’t matter that I’ve said it before. It’s how I remind myself to do it every day.) When I haven’t done this, I’ve lost my life, when I do this, I help everyone around me. It’s that simple
- Always learn from everything. Everyone I speak to. Everything I read. Everything I do. I try to remember and write down ten things I’ve learned.
They don’t add up. They multiply. Because ideas have sex with each other and make thousands of new ideas.
Because things you learn, connect the dots with other things you learn and spit out unique ideas nobody has ever thought of. This is how the universe has grown ever since the Big Bang.
Rule #12: FIND YOUR PLUS, MINUS, & EQUAL
PLUS: Coaches know the latest learning techniques. So a student can learn much faster with a coach.
They give feedback. This is the only case where repetition is good. You do something, you get feedback, you do again.
EQUAL: Find people about equal to you to challenge you.
To get better at tennis, you can’t just play your coach. You have to play people who are also trying to achieve mastery, who are at about your level.
You will constantly find new ways to improve over each other to be better. You will challenge each other. This will result in the entire group being better.
MINUS: You get better when you teach what you’ve been learning. It helps you remember and solidify the teachings.
Students often ask questions with beginner’s mind that helps you learn more subtleties of your craft.
In Zen, it’s a common adage to keep getting back to “beginner’s mind” so you keep relearning and understanding at a deeper level the subtleties of what you love.
Rule #13: THE 5/25 RULE
Warren Buffett taught me this one. The benefit of studying history and virtual mentors.
List the 25 things you love the most
Put the top 5 on the left, put the bottom 20 on the right.
NEVER EVER EVER AGAIN NEVER LOOK AT THE BOTTOM 20.
How come? Because you love the bottom 20. They are in your top 25. Of course you love them.
But every time you look at them, you won’t put your full energy into them (because, after all, they are not in your top 5), and you will sacrifice energy you could’ve put into your top 5.
Rule #14: MASTERY SEX
Scott Adams has written about what he calls a “talent stack.”
He said, “I’m not the funniest guy in the world. But I’m ok. And I’m not the best illustrator in the world. But I’m ok.” He started drawing about his experiences in the corporate world. The hypocrisy of it. It caught on with the other 100,000,000 people who work in cubicles.
His cartoon, Dilbert, is now syndicated in 2000 newspapers. He has over a dozen books. He’s sitting on top of a $100,000,000 cartoon empire.
Rule #15: THE POWER OF NO AND YES
Over years I’ve made my life so I can make as many “success” choices a day as possible.
I say “no” to almost all social media. I say “no” to almost all coffees or meals except with close friends.I never buy anything new. I don’t collect anything. I don’t like to travel. I don’t rent.
BUT, I do say “yes” to adventures I think will add to my life.
When you say “NO” to 99% of things, you leave room for a good “YES” that can add to the things you want to master.
You only have one life. Say “NO” to everything except the things you love. You can’t always do this. But try.
Rule #16: MASTER WHAT FASCINATES YOU
I was talking to Brian Koppelman. He and his partner, David Levien, wrote the script for “Rounders” and one of my favorite movies, “A Solitary Man”. They also write the show “Billions”, which has become a breakout hit.
He told me, “Don’t write what you know”. Which is funny because that is ALWAYS the advice about writing.
He said, “Write what fascinates you”.
Dan Carlin, host of the successful podcast “Hardcore History” is not a professional historian. He has no degree in it. But he does the work and now has the most successful podcast about history. More people will get their history educations from Dan than from school.
Fascination opens up the imagination. The imagination is what creates action. Action creates the future. And suddenly what once fascinated you, has become reality. And you are the master.
Rule #17: THREE HOURS A DAY
People confuse hours for productivity.
Someone asked Anatoly Karpov, how much time do you spend studying chess every day. He was world chess champion from 1975 until 1985, and stayed in the top 10 for another 15 years.
“Three hours a day,” he said.
Ever since he said that, I view that as a maximum on how much time I can spend on my #1 thing I love.
The rest of the time is devoted to refueling my energy, practicing my creativity, saying yes to adventures, spending time with people I love, and finding things on youtube I can laugh at.
Rule #18: THE UMBRELLA RULE
Louis CK started doing standup comedy in the late 80s.
- He went on the road and performed 10–15 times a week for years.
- He performed at every festival.
- He made his own show for HBO. “Lucky Louie.” He wrote a script for CBS. He made a show for FX “Louie.”
- He rewrites his material every year so no joke is repeated. He learned this from George Carlin.
- He learned Internet commerce and sells his specials online.
- He’s acted serious roles in movies ranging from “American Hustle” to Blue Jasmine”.
- He’s developed and produced five other shows that are on the air right now.
- He made from scratch the movie “Pootie Tang” starring, among others, Chris Rock and JB Smoove.
This is the umbrella. For 30 years he did EVERYTHING under the comedy umbrella. And he became #1. The #1 ever.
I swept the chess pieces to the floor and ran out. The pieces were still popping around on the ground like popcorn when…www.jamesaltucher.com
She kept throwing food at me. I was 19 and bought two tuna bagel sandwiches for myself for breakfast. That was the way…www.jamesaltucher.com
Mike Tyson woke up and nudged me. "WTF?" I said and tried to stay asleep. "James, someone on Quora is asking for the…www.jamesaltucher.com
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