Brian Gubernick explains Rule #9 of his investing principles: the difference between optimism (expecting the best) and confidence (knowing how to handle the worst). He argues confidence drives execution and offers a concrete method: ask what's the worst that could happen, then plan your response to convert uncertainty into certainty.
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Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. Earlier this week, I was talking about our No Days Off 10 rules on investing, and one of those rules was rule number 9, actually. It was that optimism means expecting the best, but confidence comes from knowing how you will handle the worst. Always ask, what is the worst possible thing that could happen in this situation? And then plan accordingly. So remember, this was in the context of my 10 rules on investing, and rule number 9 was understanding the difference between optimism and confidence. Well, I think that understanding this difference applies well beyond just your wealth-building career. I think it applies all throughout your life. Let's dig into this a little bit more. Okay, what got me thinking about optimism and confidence? Well, sure, investment, but I started seeing optimism versus confidence show up in coaching business people, or, or even in my own world when I was thinking about an approach to a conversation I was having, when I'm asking myself, am I simply optimistic or am I confident? I just start, you know, much like the RAS does to you, the second you see these words, they start showing up everywhere. And I think it's important we dig a little deeper into the difference between the two. So, optimism. What is optimism? Optimism from my perspective is just a positive outlook on the future. Optimism is this belief that things are going to get better or they're they're— you're going to have good outcomes, that they're likely, that challenges can be overcome. Optimists expect the best possible result, even in difficult situations. Optimists also have, in my opinion, a mindset of possibility. Optimism involves seeing opportunities in all of these difficulties and in believing that really setbacks are temporary. No is just a temporary obstacle. Optimism is based pretty heavily on hope, but confidence is a little bit different. Confidence is a belief in your abilities. Confidence is the certainty that you have, maybe in your own skills or that of your company or that of your family. Confidence in skills, confidence in knowledge, certainty in ability to achieve goals. It comes from competence. It comes from a track record. It comes from experience. So one would say they have confidence if they have a deep belief in their abilities. It also comes along with— I would say it's associated with trust in yourself. Confidence means that you have trust in yourself, or your family has trust in itself, or your company has a belief in that it could take the necessary actions and make the right decisions regardless of external circumstances. So optimism operates more on hope and a positive outlook. Confidence is more about belief in your abilities based on data, based on history, based on a track record. It's trust in yourself that can be tied back, that could be proven. We reason for that trust. Now, the key difference— there's many key differences, but I think one of the biggest differences here is that optimism tends to be future-oriented. Optimism is more about hope, more about your general attitude toward life in the future, believing that things are going to work out well. But confidence is ability-oriented. It's based on your belief in your capacity to perform specific tasks or to overcome challenges. It's rooted really in this, this self-knowledge, right? The self-awareness. I have a history, or we have a history, of succeeding, and we're confident in our ability to adapt, to overcome obstacles. Optimism gives you the motivation to pursue goals and see the positive side of challenges. Confidence provides the strength to take action and follow through on those goals. I'm going to say that one more time. Optimism gives you the motivation to pursue goals and to also see the positive side of challenges. This is necessary without question. If you're an entrepreneur, as most of our No Days Off Nation happens to be, you have got to have a degree of optimism such that you have the motivation to pursue goals and you could see the positive side of challenges. But confidence, confidence provides the strength to take action and follow through on those goals. Both are important, but confidence is more closely tied to your ability to execute and your ability to succeed. I firmly believe that understanding the difference between optimism and confidence can make a world of difference with respect to your success, success in wealth, success in business, but even success in relationships, success in health. It's one thing to have hope and belief in where you're going. It's a whole nother story to have confidence, to have, you know, this, this, this belief based on historical data, based on your track record, that you can in fact go out there and perform. So to bring this kind of full circle to where we started, I described Rule Number 9, which means— which says that optimism in investing— optimism means expecting the best, but confidence comes from knowing how you will handle the worst. I love that. I love that statement because when I think around how do I gain confidence, which is really the focusing question for today, if I know that the difference between optimism and confidence makes a world of a difference, or understanding that difference creates opportunity for success, I should be asking then, how do I grow my confidence? Aside from developing your skills, aside from just getting more experience and having success, a track record, building a track record of success, One thing that you can start doing today would be to be— would be to start asking yourself, what is the worst possible thing that can happen in this situation? And how would I handle that? How would I adjust? Now, that may sound pessimistic to some of you when you ask, what is the worst possible thing that can happen? I would say, yeah, I could see why you believe that, but it's also exactly how you develop confidence. See, confidence is developed when you have a higher degree of certainty as to an outcome. That's what leads to confidence. If someone says, I am confident when I go to bat right now in a baseball game, I'm gonna get a hit, or I'm confident that I could lift this particular weight, or that I could run this certain time. The only way you'd say you're confident is if you've done this sort of thing in the past, you've built some experience, and you've also evaluated how you would adapt in the event you needed to. How would you be able to hit that curveball? How would you be able to, to sprint at the very end? Like, how would you have that very last push, like, if necessary? That's what drives confidence in making those sorts of statements. So how do you gain more confidence in your world? What experience are you lacking? What track record may you be lacking? And maybe most importantly, What have you not evaluated with respect to what could go sideways and already addressed well ahead of, you know, well ahead of time so that you have the knowledge, the ability, the confidence to continue to follow through on those goals? That's all I have for you today, the No Days Off Podcast. Thank you so much for listening. And remember, every single day brings a new opportunity to get better. So let's get after it.
