How High-Leverage Thinking Elevates the Most Successful Investors and Thinkers Above the Rest

Think about Bill Gates. He doesn't have any more time in the world than anybody else. But if you look at Bill Gates, he's not producing 10x more value than me. He's producing millions of times more value. He can't possibly be working a million or a billion times harder than you or me. There's a reason that Bill Gates is producing so much more value, and he's not the only one. But he's just a great example. And the reason is because Bill Gates is more high leverage than you or me.

You're listening to Freedom Fast lane, presented by capitalism.com this is the show about building businesses and investing the profits so that you can live life on your terms. And now, your host, the future owner of the Cleveland Indians, Ryan Daniel Moran.

Hey, fastlaner Ryan here. Welcome to the show. Before we jump in, I wanted to personally invite you to join us at the capitalism conference this December 7th, 8th and 9th. This is made for physical product sellers, Amazon sellers, entrepreneurs with a big vision, people who are building something bigger than themselves. It's for entrepreneurial empire builders. If you are building something with at least a seven figure potential, probably have even bigger sites set than that. You understand the importance of dialing in your marketing and sales and you're investing in things that give you cash flow and things that produce wealth over the long term, then you need to be at the Capitalism Conference because you are going to be supported in each of those three areas. We brought in some of the best advisors in the world, including celebrity keynotes like Damon John, Russell Brunson, Kimbal Musk, the founder of the Honest Company, all those people that you want to hear from who can also come back and give you the playbook to getting the results that you want. Whether that is building a million dollar company, a billion dollar company, or just having an extra 10k a month in passive cash flow so that you can live the lifestyle that you want. They're all going to be there advising you at the Capitalism Conference. So I'm inviting you to join us this December 7th, 8th and 9th in Austin and you can grab your seat at TheCapitalismConference.com.

Hey fastlaners, Chris here from the capitalism.com team. How is it that billionaires and millionaires achieve so much when they have the same amount of hours in the day as everyone else? There's a little secret they employ that we could all learn and benefit from and that's high leverage thinking. It's the topic of today's podcast led by guest host Matt Bodnar. Now, Matt is the host of a podcast called the Science of Success, and he's interviewed a bunch of entrepreneurs about high leverage thinking. Listen in to the podcast to learn how to improve your ability to think and create at a higher level.

Hey, Freedom Fastlaners, this is Matt Bodnar, the host of the Science of Success podcast. Today we're going to discuss high leverage thinking. Thank you so much for joining me today. Now, I want to start off talking about something fundamental. There is a non linear relationship between time and value creation. What do I mean by that? Let's look at somebody like Bill Gates. Start with Bill Gates as an example. When you think about Bill Gates, he doesn't have any more time in the world than anybody else. In fact, we all have more or less the same amount of time. But if you look at Bill Gates, he's not producing 10x more value than me. He's not producing 100x more value. He's producing millions of times more value. He can't possibly be working a million or a billion times harder than you or me. So something has to be there. There is a difference. There's a reason that Bill Gates is producing so much more value. And he's not the only one, but he's just a great example. And the reason is quite simply because Bill Gates is more high leverage than you or me. And there's math behind that. The math of something you've probably heard about before, which is the 8020 principle. The 8020 principle governs everything from the amount of craters on the moon to the distribution of files on your hard drive, to rabbit populations, and most importantly, the distribution of wealth for both nations and individuals. In fact, I've studied deeply some of the most successful investors and thinkers in the world. Titans of industry, icons of capitalism, people like Warren Buffett, his business partner and billionaire Charlie Munger. Ray Dalio, the founder and owner of Bridgewater, one of the most successful hedge funds of all time. And even old school titans of industry like John D. Rockefeller and Andrew Carnegie. And looking across all of these incredibly successful people, billionaires, leaders, thinkers, and many more than I've studied, I've discovered some commonalities. There's a couple key principles that unify all of these thinkers, all of these incredible achievers, and it's because they're more high leverage. There are two specific principles that underpin high leverage thinking, and we're going to go deep on both of them today. And these are commonalities shared across all of these incredibly successful individuals. The first is to improve your decision making ability. And the second is to hire people and replace yourself. Those are the two key principles to high leverage thinking. Those are the two most important things that you need to be more high leverage. Now let's dig into improving your decision making ability.

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Now let's dig into improving your decision making ability. I think of decision making as compound interest for your mind. If you get 1% better at making decisions, at thinking as a meta skill, it cascades through everything in your Life. If you're 1% better at understanding reality, at thinking more deeply, at making the best possible decisions, that's going to impact how you purchase a house, how you buy a car, how you interact with your spouse, how you grow a company, everything in your life is improved and enriched by that 1% improvement in your ability to think. But it's a snowball and it keeps growing. You know, Einstein called compound interest the eighth wonder of the world and compounding is incredibly powerful phenomenon. If you can just get 1% better, the next 1% improvement is stacked on top of that 1%. It's not incremental. So every little improvement in your decision making ability flows through everything in your life. That's the power of leverage. And that's why focusing on your ability to think and make better decisions has a huge impact across everything that you're doing. But just like compounding, just like compound interest, that impact isn't noticeable at first. These small little incremental 1% improvements in your ability to think more effectively, you can't really see that big of an impact initially. But eventually they stack and stack and stack and you wind up way ahead of people who've never invested in the ability to think and make better decisions. One of the core principles of improving your ability to make decisions, to become a more high leverage thinker, is to study things that never change over time. You want to study strategy, you want to study meta principles. If you understand the strategy fundamentally, you can always create and build the tactics if you understand the fundamental principles that govern reality, the pillars of human knowledge, things like psychology, biology, history, economics, mathematics, physics, et cetera. If you really grasp these fundamental principles, you can create the tactics that you need. But if you spend your time studying the five strategies that will improve your email opt in rates by 2% or mastering these nuances of digital marketing, these things change extremely rapidly with time. That knowledge, all the time you invested in building it, is thrown out the door as soon as there's a change in Facebook's algorithm, or the markets get more competitive, or the strategy just stops working. We've all seen online marketing strategies continue to deteriorate. You have to pivot and move into something new. But it's not just online marketing. Any knowledge that doesn't change over time is knowledge you want to be investing in and knowledge that changes very rapidly. Or as I call them, tactics, little implements, things that you can do right away. That's not the kind of knowledge you want to be investing in your mind. You want to build a toolkit of what Charlie Munger and Ray Dalio and many of these thinkers call mental models. Now, you might have heard that word thrown around a little bit and we'll dig into and describe exactly what those are. But if you build a toolkit of mental models of these models that govern reality and explain what happens in the world, you're much better off than somebody who spends all their time studying only the tactics that change very rapidly because it harnesses the same power of compounding. Once again, if you master knowledge that doesn't change over time, you're going to be benefiting and stacking that knowledge on top of itself so that in three, five, ten years you have an immense framework of understanding that dwarfs someone else's limited understanding of the tactics and only surface level things that are going on. You know Charlie Munger, we talked about him a little bit. He's Warren Buffett's business partner, he's a billionaire and he calls this the path of worldly wisdom. Building a toolkit of mental models. If you read about this and you search around about this, and I'm going to give you some awesome resources to do some more homework on this. But if you look at many of the most successful people, thinkers, billionaires around the world, they often toss around this term. What is a mental model? Most simply, it's a conceptual idea that explains the way something works in the world. I'm going to give you a couple examples of mental models from psychology. You have the six principles of influence from the book Influence by Robert Cialdini, things like confirmation bias, anchoring and social proof. If you look at economics mental models like one of the ones we discussed earlier, the 80:20 principle, the time value of money and the power of compounding. From mathematics, you can pull things like expected value and base rates from game theory, the prisoner's dilemma, the concept of natural selection from biology, or the concept of breakpoints and critical thresholds from physics and chemistry. There's dozens of mental models and it's beyond the scope of our conversation today to go too deep into any one mental model. But the idea here is that you want to take the 101 course from every major academic discipline, history, economics, physics, biology, etc. And you want to master the top ideas from each of those. You don't have to go super deep because again, the 8020 principle mean that a few core ideas from each of these disciplines will carry most of the weight in building your framework and your understanding. You want to take the core ideas from each of these disciplines and integrate them into a lattice work of mental models, a coherent structure of mental models that can help you better understand human behavior, systems, how things react, how to create the results that you want in the world. Now, this might sound very high level and it might sound somewhat difficult to achieve, but again, this is the path that the most successful investors and billionaires on the planet have walked. This path of becoming more high leverage. If you build a toolkit of mental models that don't change over time, your decision making ability, the way that you think about the world will improve dramatically. You'll be able to see things more clearly. You'll be able to see how the puzzle pieces fit together, see one step ahead of people. And it doesn't have to start with mastery of all these ideas. It's a lot of stuff. And I'm going to give you at the end of this conversation a great starting point and a toolkit that you can use to begin building your own toolbox of mental models. But once you start building this lattice work and you can use tools like checklists at first to put together these different components into a map that helps better explain what's going on in the world, you're marching down the path of being a high leverage thinker. You're marching 1% better every day and improving your ability to think and better understand reality. The next strategy that high leverage thinkers use is hiring people and replacing yourself. Now, I'm going to share with you two specific quotes from some of the most successful people of all time. The first is from a book about Andrew Carnegie. When A.B. farquhar, a Pennsylvania businessman, boasted that he was in his office every morning by seven in the morning and was the last one to leave in the evening, Carnegie laughed at him. You must be a lazy man if it takes you 10 hours to do a day's work. What I do is to get good men and I never give them orders. My directions seldom go beyond suggestions. Here in the morning I get reports from them. Within an hour I have disposed of everything, sent out all of my suggestions, and the day's work is done and I am ready to go out and enjoy myself. Now here's another quote from John D. Rockefeller when he was speaking to a young recruit at Standard Oil. Has anyone given you the law of these offices? No. It is this. Nobody does anything if he can get anybody else to do it. As soon as you can get someone whom you can rely on, train them in the work. Sit down, cock up your heels, and think of some way for the Standard Oil to make some money. Now let's think about that for a second. Andrew Carnegie, John D. Rockefeller, two of the wealthiest and most successful people in history. In fact, inflation adjusted in modern era, John D. Rockefeller is the wealthiest person ever of all time. They're both echoing a very similar sentiment. This idea that one of the most important things that you can do to be more high leverage, to achieve more results with the same amount of time invested, is to hire great people, give them the freedom and replace yourself. So many Entrepreneurs get stuck in the trap of thinking they need to do everything and thinking that they need to be in every system or every process. In many instances, you become the bottleneck and one of the hard. One of the most important things with hiring people and replacing yourself is actually getting out of your own way. It's letting go of the need to do everything, of being the person that has to touch and approve every little piece of the puzzle. You have to let go of the perfectionism of wanting to control every single piece of your business. And you have to focus on being able to hire people who are better than you to execute the core components of what needs to be done. I use this strategy relentlessly in my own life. I'm constantly trying to replace myself, build systems and processes that I can plug someone else into. In fact, I often think of myself as a rather lazy person. But what's enabled me to be so successful in my life is because I've channeled that laziness into being relentlessly high leverage and constantly thinking, hey, if I'm doing this work, how can I systematize this? How can I get someone else into this? So that I can free myself up to focus at the 30,000 foot view? So that I can free myself up to focus on strategy and focus on the most important, most high leverage things that I can possibly do. In fact, one of the most powerful things that you can focus on, one of the most powerful skill sets that you can build is the ability to recognize and hire talented people. Don't be afraid to hire people who are smarter than you. There's an incredible book called the who Method that goes in detail on how to do this. Again, it's beyond the scope of our conversation, but I'm going to give you at the end of this talk an incredible resource that's going to help you down this path. You want to hire people smarter than you. You want to hire incredible people and you want to give them responsibility. Think back to what Carnegie said. He seldom gives them anything other than suggestions because he knows if he's built an incredible team, they can focus on the execution. You want to constantly be replacing yourself. In fact, one of the things that has been an incredibly successful strategy for me in my business is a relentless focus on always replacing myself. When you're replacing yourself, especially from the things that you're not good at and the low leverage bottlenecks within your business, it frees you up to do something. It frees you up to focus on your area of strength. If you're not incredible at something. If you don't excel at it, get somebody else to do it. In fact, it's your duty to get someone else to do it. Someone else can and should be doing everything in your business except what you're exceptional at. Accept what your true area of strength is. That is how you become more high leverage. You focus on your strengths, you replace people in your organization in all of the roles that you can't or don't want to serve in, and you design a system and let your team execute it. Now to recap, we've discussed the two key principles to high leverage thinking. The first is improving your decision making ability, harnessing the power of compounding, mastering things that don't change over time, and building a toolkit of mental models so that you can better understand reality. The second is hiring people to replace yourself, build a system, focus on your strengths and relentlessly replace yourself. Cultivate the ability to get out of your own way and put people in place so that you can focus on being as high leverage as possible. If you want to embark down the path of becoming a more high leverage thinker and harness the incredible power of improving your ability to make better decisions, I've created a completely free guide just for freedom fast lane listeners like you. It's called the four Steps to Making Better Decisions. It goes much deeper, explains in depth, gives lots of resources to explore, and more on how to become a high leverage thinker and improve your ability to make better decisions. And you can get it completely for free by going to scienceofsuccess Co Better that's scienceofsuccess Co B E T T E are all you have to do is go to that page and you can get this incredible resource that goes much deeper on how to build mental models, how to become a high leverage thinker, and how to make better decisions. Again, my name is Matt Bodner. I'm the host of the Science of Success podcast. Thanks for joining me today. Back to you Ryan.

Thanks for listening to today's episode with guest host Matt Bodnar. So many entrepreneurs get stuck in the trap of thinking they need to do everything. Those who find success are able to break through that trap and by doing so lay the groundwork for building their empire. Are you at the point where you want to start scaling your business? Then check out capitalism.com and our solutions for entrepreneurs like you. Find the links in the show notes for more information. Until next time.