MI Rewind: Naval w/ Eric Jorgenson

24:34We talked about their good friends. He even wrote the foreword to the book. Tim obviously wrote the book on the four-hour workweek. I wonder if there's any influence there. Maybe. I wouldn't be surprised. I know they've been friends for a long time. I also think people of that mindset tend to flock together. So I don't know where it started. And I think Naval is probably not original in the thought that the 40-hour workweek may be an artificial construct of the industrial era and we may be beyond it. But that comes from a lot of different places. A lot of people bring their own experience or stories to that observation.

25:06And we may see that continue now that we got more remote work and more fractionalized employment. We might see that change a lot more than the variety of options available to us change. I liked a lot of things from the book, but I think one of the quotes that probably stuck with me the most is when an old boss warned, you'll never be rich since you're obviously smart and someone will offer you a job that's just good enough. Talk to us about this quote and what it means. I think that's a really interesting one. It's just so easy to stay comfortable. And especially when you're way more comfortable than most people are and have what feels like a very enviable position, right?

25:49Something uncomfortable about being accountable for your own work or starting a new business or taking a leap off that paycheck and just living on a runway until you can figure out how to make that runway longer. It's hard to do. And I think it tends to be that the longer you wait, the harder it gets. And smart people are very employable. Someone's always going to offer you a good gig and it's always going to look tempting when you're cut, bruised, and battered from being out there trying to figure it out for yourself along the way. I don't know. It's a good warning. It's a good sort of like, maybe you live forever with your cowardice kind of quote.

26:25If that's what's important to you to live in the arena, go do it. But know that you're always going to have an option of a soft, warm, protected bed. And you got to choose every day to get out of that and go back to the arena. Why is being a clear thinker more important than being smart? And how do we actually think clearly. I think this is such an underrated chapter. Everybody just wants to read the get rich chapter. This can help you get rich though. Totally. It tends to ignore the whole section after that about building the judgment that will give you the confidence to and clear thinking to help you on that path.

27:02Clear thinking is so interesting because it's really not taught. It's kind of like, especially in this sense, cobbled together and it's as much about subtraction as it is about adding, right? There's a lot of people, you know, there's like the rationalist community and the mental model sort of faithful of which I am one, right? Like I love reading about mental models and trying to combine different ways to look at problems and kind of different keys to different locks. Like that's fun for me. But some of the stuff that Naval talks about is also about like removing your ego and your identity from the way you approach problems, learning to fight that first instinct to leap to one solution and then start justifying it.

27:42We're much better justifiers than we are option listers by nature. And so we tend to find one and then start finding reasons why it's the answer instead of finding five different answers and then finding reasons why all five of those are good. That is a very unnatural act for us. Naval also talks about finding first principles, breaking down the problem as much as you can, figuring out what the root is, what's the real problem, and reframing things until you can be sure that you're striking at the root, not the branch, I guess, is the metaphor. You mentioned mental models. And I feel like that is a total buzzword recently.

28:22I feel like there's so many people saying mental models. And I'm not saying you shouldn't. I know it's being thrown around a lot. For a long time, I didn't even know what it meant. It would just be thrown around. And I'm like, I don't even know what a mental model is. So for somebody that's listening that had heard you say that and they're just like, I don't know what that is. Explain to us what a mental model is. I agree with you. It's not the world's greatest term. I deeply love Charlie Munger. I think he coined this, but it is not his best coinage. I will say it's better than heuristics, which is something else that people call it.

28:54Metaphors is not broad enough. Basically, tools for thought. It's a pattern. It's a method of problem solving, I guess you could say, where each mental model is like one key and a problem is unlocked by or solved by some combination of keys. So you have to read a fair number of these before you can kind of like see the power of them. And they are only really powerful when you combine a few of them. There's a few books that, or chunks of books that cover this really well. The Navalmanik has a chapter on mental models and they're pretty short. And it's just a few that Naval has mentioned over the years.

29:32The kind of Bible of mental models is poor Charlie's Almanac, which is like an enormous book, or you can go find his speech, Psychology of Human Misjudgment covers like different mental models. So an example of one is like inversion. Always invert. Always invert. Yeah. This is like a thing that Munger uses. It says it's one of the like very core mental models that solves, he would say it carries a lot of freight, right? Like it applies to a lot of problems and it comes from algebra where in order to solve the problem, you have to reverse the problem. You move the X to the other side, divide by it, and then all of a sudden, it's really clear.

30:06If you're trying to work forwards, not backwards, it seems like an impossible problem to solve. So the inversion is rather than asking, how do I solve this problem? Asking, how do I prevent this problem? And you may not be able to solve the current situation, but if you can prevent it from happening again in the future, then all of a sudden, the problem will resolve itself over time. And it went from an impossibility to a relatively simple solution. Another might be a sample size, right? So understanding what's a statistically valid sample size and when you're getting persuaded by something that's more of a story than it is a data set.

30:43So this list has been expanded by a lot of people. The Farnam Street blog does an amazing job with it. George Mack writes some incredible stuff on it. And he's got podcasts with Chris Williamson where they talk through a bunch of different mental models and have great examples. If you search around, you'll find some really cool stuff, but it's definitely like, it's a renegade academia. It's just like a bunch of smart people collecting methods for problem solving and trying to share them with each other. What I like about it is it's very cross-disciplinary. There's mental models from biology, from chemistry, from physics, from engineering, from math.

31:15The Lattice work is another amazing resource. It's a community I'm a member of. And Blas Moros has collected and written really, really well about different mental models. There's probably 150 on there, but you can go through the core eight and be a smarter person tomorrow if you just read that website tonight. I'm glad that you mentioned Charlie because I was going to ask you if, given the name of the book, I was wondering if you had been influenced from Charlie's Almanac. oh yeah this is like a direct homage i picked up poor charlie dominac from my dad's bookshelf when i was 19 and it changed my life like it felt like i could see the matrix all of a sudden and then i went on to like read all the stuff that he recommended so like it wasn't just that that book changed my life but that he said okay now go read like isaacson's biography of benjamin franklin i was like sir yes sir like went and read it i was like okay now go read influenced by Sildini.

32:13He's like, okay, go read that. Okay. So Daisy chaining these books of like, I found this brilliant guy who's thinking patterns I really admire and whose wit I think is hilarious. And I started listening to his talks. He's got some commencement speeches. I read the books that he read. I went to the Omaha and I heard him speak at the meetings and stuff. So I just admired him and learned a lot from him and think there's a lot to gain from having a hero like that and a few heroes like that so that you kind of get a little bit of depth, but trying to learn what they learned in the way that they learned it.

32:48It'll change who you are. Munger is probably one of the biggest influences on me. Trey Lockerbie Let's take a quick break and hear from today's sponsors.

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36:18All right, back to the show. So for anyone listening that hasn't heard the interview that I had a couple of weeks ago now, maybe a month or two with Cialdini, I highly recommend you go back out because Cialdini was on the show and he told us a story about how his book Influence and Persuasion impacted Warren Buffett and Charlie Munger so much that they gifted him a share of Berkshire Hathaway because the book made such an impact on him. So it's a really cool conversation if you guys want to go learn more. Eric, what I like about your book, I didn't like Poor Charlie Almanac's format. And I don't know if they have different formats, but the one I have is super wide.

36:55It's kind of like a cartoon book almost with a ton of pictures and stuff. And I just wasn't a huge fan of it, but I really liked the structure that you did in your book. I appreciate that. It's definitely a little bit of an inaccessible format. Poor Charlie Almanac, one, it's like 60 bucks, two, it's a coffee table size book. And there's a lot of non sequiturs in there. It's a big book. It is comprehensive, but it's not a super tight, well-curated, tight read that is insight-rich with Charlie's work. It's just not comfortable to sit down and read. That's what I just genuinely don't like about it the most.

37:30No, it's like wearing a blanket. It's heavy. I understand that. The way around that is just go read his speeches online or print them out. The speeches is where the real value is, I think. That's his mode, usually. And you can find him on YouTube and listen to him and stuff. Not only did I really want Naval to enjoy this book, but I also... Once I hit upon the idea of calling it The Almanac, there's very few things I respect as much as I respect Charlie Munger and Poor Charlie's Almanac. It meant a lot to me to put that on the front of the book and make this the title. And I feel like I owe so much to that lineage.

38:07And with all humility, hope that this is a reasonable contribution to that pattern that started with Ben Franklin and continued with Port Charlie. And I hope that this is worthy of being in that conversation and helps people the way that Almanac helped me become who I am. You should send a copy of your book to Berkshire Hathaway. Attention to Charlie, if you haven't already. I should. Yeah. And Peter, who's the person who compiled the Port Charlie's Almanac. Yeah. You should send them both a copy. That's a good idea. Yeah. Robert Leonard He might get a kick out of it. You never know. I mean, there's a chance he throws it in the trash, but there's a chance he really likes it.

38:49Robert Leonard Oh, that's a great idea. I'll do it. Robert Leonard As someone who has spent so much time studying Naval in the past and also continuously, what do you think has been the most important thing that you've learned from him? Robert Leonard It is almost certainly just a mindset around... around... I mean, all of the wealth and judgment stuff has changed a little bit about how I think about my business and how I think about investing my time. It definitely dialed up my opportunity cost of my time. It made me way more sensitive to wasting time or doing things that I thought would be either not enjoyable or low value to myself or others.

39:27And it also changed... I was a little bit bent in this direction already because... Obviously, I chose to write a book about this guy whose ideas I tended to mostly agree with, but it definitely pushed me farther in the direction of this internal locus of control and the stoic kind of happiness where you're just like, choose to accept what exists and understand that your internal monologue is way more malleable than the outside world. And so some of the best investments you can make of your effort are around training yourself to have a positive perspective and charitable outlook on the whole rest of the world.

40:04And just as my friend and mentor says, choose your attitude. You are in control of that voice in your head. And you don't think you are, but understanding that you are, whether it's not in every instant, but over the short and medium and long-term, you can train and control that. That's not to trivialize it. It's not to say it's easy, but it is worth the effort. At the end of each episode, we have a segment called The Action Plan. And I like to ask every guess three questions that give the listeners three things to go do when they're done with this episode. I think too many people just consume, consume, consume content and don't actually take action on it.

40:42So that's why I created this segment called The Action Plan. So people don't just go to their next episode in their play or pick up the next book, actually take action on everything we've talked about. So - Brilliant. Love it. Thank you. For the first question, what is a habit or principle that either you follow in your life or that Naval has preached that has had a big impact on success that not enough people do, but they should? I mean, habits and principles are very different things. Either one. A habit that I have is making a to-do list every morning that has two spots for high priority things and infinite spots for low priority things.

41:21And I work very hard to make sure that those high priority things get done every day and everything else can fall off. And I will be fine with that. But just choosing, having that discipline of what matters in the long run and being damn sure that the most important thing that day gets done. I think as a principle, if I can have one of each as a principle, thinking long-term, being really intentional about where you want to go and understand, being able to connect the dots going forward. It doesn't mean it all has to be master planned. It shouldn't be, but it should be better than yesterday, better than yesterday, better than yesterday, so that your steps compound on each other.

41:55I think I might know the answer to this next question, but what has been the most influential book in your life? It doesn't have to necessarily be your favorite because I think there could be a difference between favorite and influential. What has been the most impactful on you? I mean, Portrait of the Almanac is probably it for my adult life. I think the starting conditions of the universe, books are actually more impactful the earlier you read them in your life because they're a larger sample of what you've taken in. And so I think from that perspective, I read basically every strip of Calvin and Hobbes as a kid multiple times, and that probably contributed too much to my personality today.

42:33So definitely those books were very high impact on me also, in part just because of when they got incepted into my head. What is one action that somebody listening to the show should take after this podcast that can help improve their life, career, or business? I think they should build one small lever, which is to take one intentional step to do work that gets more work done later. Whether that's start an automated investing, set up an automation so that money's pulled from your paycheck and goes into the stock market index every month or every paycheck. Whether it's buy a tool that makes you meaningfully more effective, whether it's buy some crypto and stake it that you've been meaning to do forever, whether it's write down your personal principles and stick them to your bathroom mirror in the morning that makes you more of who you are every day.

43:28Just set aside a few hours to figure out a thing that's going to be a high leverage solution. If you only get one, do one way better than nothing. If you can build that into a habit and do one of those things every day, your efforts will compound and you'll find yourself massively more effective in a year or in five years than you are today. And just getting more work done around you, even though you are not working harder every single day. And the last thing before we wrap up the show is I like to turn the tables and let the guests ask me a question. So what question do you have for me? I feel like we could do a whole another hour on you because I'm very curious.

44:11But a question I like to ask people is, what is your single highest conviction belief. That fitness has a bigger impact on your life and business and success. I guess I would say success. Fitness has a bigger impact on your success than more people think. And I just think that that's so overlooked in so many different facets. And you don't have to be a bodybuilder. You don't have to be an Olympic weightlifter. You don't have to be something like that. I don't want people to take this wrong. Just doing something that makes you sweat every day, I think is something that is so overlooked. And it's a conviction that I believe in.

44:46I like that a lot. I feel like, I don't know where it comes from. I don't know if it's a high school thing or a generational thing, but I felt like fitness and success were at odds with each other. If you look at a lot of the really successful guys, I'm not being rude or crude, but a lot of them were larger guys, healthy and things. It may have just been that the FDA put like jello in the food pyramid for a minute. And like, we lost sight of that. Like, I don't know where that comes from, but definitely like, I'm frustrated by the false sort of duality of the, like, you're either a geek or a jock.

45:20And like every move you make to live a fitter, healthier life is sacrificing your intellectual life or your success in some other domain. And I think it's clear to like me and most of the people I hang out with now at the stage of life, I feel like those are very symbiotic and feed each other and compound on each other rather than take from each other. I totally agree with you. I wish more people understood that. And I think they'd live better lives if they did. I joke and say that I'm the nerdiest jock or the most athletic nerd that you've ever met because I feel the same way. They're not two separate things.

45:54You can be both. And I think for me, when I think back to where maybe the disconnect was, is that I think it has to do with time and how much people worked. If you look decades ago, these people that were super successful, they were working the 60, 70, 80, 100-hour work weeks because that's, I guess, what they thought it took. And now if you look at Naval, Naval looks like he's a pretty healthy, in-shape guy. And he's the one that's saying, hey, don't work a 40-hour work week. Don't work too much. So I think it's just a mindset shift in terms of how much you have to work. Because if you're working that much, the reality is you probably can't exercise that much.

46:29You can't eat healthy food. You got to order into the office. You got to get takeout. And that's not going to lead to a healthy lifestyle. Yeah. I mean, there are two things on that. So the one of all has a really helpful construct through me that I almost opened the book with this because I thought it was so good and so important. Of all of the priorities in my life, health is the number one. Because if my health falls apart, I can't take care of my family. My relationships don't matter if I'm not a healthy person. All of a sudden, I'm just like, that totally flips. My financial means do not matter if I am not a healthy person.

47:02Nothing else matters. My workout comes before... Unless my house is on fire, I am working out before I'm doing anything else that day. And I thought that was so interesting and helpful framing because it's the conventional wisdom that we all ignore. And the other is realizing... I have some friends who are deeply, deeply intellectual people. And the thing that matters to them the most in their life is how smart they are and how good their decisions are. and how well their brain works and their returns or their investments or their writing. And some of them don't always see that a healthy body makes a healthy brain.

47:40You cannot have the healthiest brain on earth and the highest functioning without taking care of your brain container, which is the whole rest of your body. Well, that's the beast for me. The health is so important. I think more people need the health component. But even that aside is when I don't exercise, I can't think clearly. I lack motivation, et cetera. So if you want to just push the health piece aside, just look at business and being successful in your career or whatever it is. If you just exercise and have a little bit of fitness, you're probably going to be more motivated. You get more stuff done that leads to more success.

48:13So if you don't believe in necessarily the health piece of it, I at least believe that it could help you in motivation and determination and those types of things. Yeah. I was talking to my closest friend here in Kansas City about that. And he's like, we realized the most successful chapter of our careers was when we were the most focused on our health and basically ignoring our careers. Naval has seen a similar pattern. We're just on this crazy bodybuilding program where we're weighing all our food and recording every lift and everything. And we were just obsessed with it for a few months. And we looked up at the end of the months and we're like, wow, we did great work, even though we weren't even really thinking about it.

48:53It was such a distant priority to what we were trying to get done in the gym and the kitchen. Pretty interesting. That's too funny because I literally had the exact same thought before because I went for a year and a half, two years trained for a bodybuilding show. And I was doing the same thing. Two days, twice a day in the gym, weighing every single food I ate. And then I look back on it now and I'm like, I think that was some of my most productive time. I don't know if it's been my most successful time because of when it was in my life. I was a college student, but I was so productive. And I look back on how much work I did back then versus what I'm able to do now.

49:29And I'm just like, it's just so much more when I had that fitness really in check. I don't know if you had this experience, but for me, just going through that program, even for a little bit, I did not become a bodybuilder. I still don't live that way. But I learned so much in that few months of optimizing that I just now feel like I totally grok and I'm in control of my measurements and my nutrition and my body fat percentage and all of this stuff that just felt like a mysterious, impossible thing before. And I think it's still a lot of people... It just totally puts very, very clear inputs and outputs on things that people, I think, really struggle to understand sometimes.

50:12And mental toughness. Huge discipline. Yeah, huge discipline. Whether you're being a bodybuilder or you're just going for a walk every day. It takes discipline because there's going to be days where you don't want to do that and you just have to do it anyway. And that teaches you a lot and it makes your brain a lot tougher and stronger and that'll help you in business. And the other piece too, I think that sometimes goes overlooked is a difference between the number of hours you're working versus your efficiency. And I think like, let's just say you have two hours to work. You could not exercise in that two hours and just work for two hours straight.

50:45But let's say you're not that efficient, But instead, you take 45 minutes of that two hours, go exercise, and now the remaining hour and 15 minutes, you're so efficient. You actually do more in an hour and 15 minutes than you did in the two hours when you didn't exercise. And I kind of relate this to... I forget who the quote came from, but it's like, if I had 10 hours, I'd spend the first nine hours sharpening the axe, and then the one hour cutting down the tree. It's kind of the same idea. Yeah. The Lincoln quote, I mean, Tim Ferriss talks about as being the... I think that's feel like the Pareto thing, the 80-20, right?

51:16When you arrive to work sharp and amped up and having had time to consider what the most important thing to do is, and you have to do it, the task will fill the time that you allot it. And so if you give yourself an hour to work and an hour to work out, you will probably get pretty close to the same amount done in an hour as you would two. If it's a really important thing and it's a well-defined task and you got to get it done and you're prepared, you can get a lot done in an hour. Yeah. That's Parkinson's law for you. Trey Lockerbie Parkinson's law. Yeah. Thank you. So you were pulling each other across the finish line.

51:47Yeah. Well, hey, Eric, where can everybody go to find you? Where can they go to pick up the book? I highly recommend it. I was telling Eric before I have the physical copy. I have electronic, audio book. I have everything. So I really enjoy it. I think you guys should go check it out. Where's the best place to find the book and connect with you? So everything for the book is on nivolmanac.com with a CK. And you can get the free digital version there. You can buy it on Amazon. The audio book is available for free on my podcast. So if you search Jorgensen's soundbox, the first six episodes are the audio book, and then you'll get to interviews and stuff that I've done.

52:24My online home is ejorgensen.com. So I write a ton of essays. If you like the Naval book or all of the stuff that we just rambled through, essays and stuff on there are pretty cool. And I'm on Twitter way too much. So if you want to just send me a message or whatever, I got open DMs. All right. I will put a link to all those different resources in the show notes below for anybody interested. Eric, thanks so much for joining me. Dude, thanks for having me on. This is awesome, Robert. I appreciate it. All right, guys. That's all I had for this week's episode of Millennial Investing. I'll see you again next week.

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