The Choice | How To Improve Decision Making Skills

What's going on, everyone? Last night I was speaking, I was one of the speakers in Clubhouse. It's a new app. You can follow me there. It's Hormozi. But anyways, I was one of the speakers at this app and they were asking questions like, if you had to start all over, you know, what would you do? What's the biggest mistakes you've made? And things like that. And one of the things that came up in my mind is one of the hardest things about being an entrepreneur, which is the disconnect between the right decision and the right outcome. And so let me explain if you've listened to any of my stuff. I talk about repeating successful actions, find something that works and keep doing it over and over again. But the thing is, your decision making process is ultimately the most valuable thing that you have, right? It's what makes you. It's your picker, right? It makes you decide what way to go, who you're going to marry, what business opportunity you're going to pursue, how you're going to price, how you're going to start marketing, what you're going to learn first, who you're going to, you know, get mentoring from all of these things, who you're going to become friends with. Like, all of these are decisions, right? And, you know, you can take the money away from a billionaire and then they can recreate it again. Elon Musk, you know, lost it and then gained it all back, right? And so like, the thing is, the decision making is what ultimately fuels all these things. And the hardest part about entrepreneurship, and really, I mean, I think almost life in general, is that you can make the right decision and have the wrong outcome. And let me give you a couple examples of this. For example, you may say, you know what, I listen to Warren Buffett. I think he's a good investor. And so he says, I wouldn't touch Bitcoin, right? And I hear that and I'm like, man. Well, he knows a little bit more about it than I do. But his argument was simple. It is speculative, which means I'm buying it not because it has intrinsic value, but only because I believe that someone else will buy it for more later. That's all it is. He only believes in investing in things that have intrinsic value and also produce so they actually have production. So like a business you buy, you still own the business at the end, and then it spits out production, which would be profit or crops or whatever, right? That's the basic difference. And so the thing is that you can make the right decision. So, for example, I chose not to buy Bitcoin two years ago or whatever, and now the amount of money that it would have been worth is a lot more. Was the decision wrong or was it that the outcome did not match the quality of the decision? And so let me explain, let me like unpack this. If you are going to change the way you make decisions, because a decision that you made in the past that was probably a good decision ended up bad, you have to apply the same decision making context or framework to everything else. So let me explain. So if I say I'm now going to be a speculator, right? I'm going to be someone who buys things with the hopes of selling them later for more, even though the thing itself doesn't have more value, right? If I choose to start making those types of decisions, then I have to think about all the other investments I would have made and lost money on as a result of that decision making framework. And the place that I heard this from first was Ray Dalio in principle. So he's one of the richest men in the world, investor as well. He said one of the hardest things is passing up on an opportunity and then seeing it do really, really well. But the thing is, I have to think to myself, if I were to use the decision making framework that would have made that deal a winner, then I have to apply that same framework to all of these other businesses or situations that would have been losers. And my net net of having that different decision making framework would ultimately cause me to lose. And so this has been one of the most powerful concepts for me as an entrepreneur because what it does is it allows me to separate the outcome from the quality of the decision. Why was it that I did these things right? And I can't even tell you, like, so, for example, you know, actually I won't even give that one. But like, there are decisions that I made when I was younger that ended up being poor later. But when I thought back about why I made the decision, I would make the same decision today. So it's not fair for me to say, well, I wouldn't have made the same call now. But you can't use the information that you have today to make the decision that you would have made in the past because then it means that you were a different person because you're not using information that you have access to, right? And so claiming that this decision that I did in the past that didn't end up, well, working out in my favor was the wrong call, can just Be really poisonous and it may not be true. Now, if you make a mistake because you had poor calculations and you repeat the same mistake over and over again, then you should consider looking at your decision making calculus and see if you need to tweak some things, right? But for me, this has been one of the hardest learned lessons and emotionally one of the most trying is looking at decisions I've made, looking at the outcome and being able to separate. Was this a good decision independent of the outcome? And I'll wrap this up with just a quick example to show you. If you had a perfect baseball swing, right, you're just an amazing batter, right? If someone gets up there and they're the best batter in the world and you strike out, is it because their swing is horrible? Is it because they don't have the right decision making about how they swing at pitches or how they pick the pitches? Probably not. He's probably a really good battery, right? Because I just said he's the best. But it still means he's going to strike out and it still means he's going to get out and hit pop flies and all that kind of stuff. But he's going to be an amazing batter with a.350 average or whatever and still two out of three times he's going to strike out or not get on base, get out. And so when I think about that, you can be the best at this thing and still only be right a certain percentage of the time. And so rather than that batter striking out once and saying, I need to change my swing and then getting back up there and striking out again and be like, I need to change my swing and always resetting the baseline instead being like, I understand that if I apply this swing to enough at bats, quite literally, I will get the opportunity to knock it out of the park. And me knocking out of the park on one of these right decisions will ultimately outweigh the negatives of the wrongs that I have done, right? And so for me, obviously with, in the context of your own life, like I talk about decision making in other videos, but you want to make sure that you never bet the farm and you don't put everything on black when you cannot afford to lose, right? Like, don't bet everything. But I mean, sometimes, you know, things get crazy, but for the most part, don't bet everything. The point being, just like a big ball player, you're going to have these decisions that you have to make and not changing your decision calculus, your decision maker, your picker, every single time is going to ultimately allow you to judge the quality of your decisions based on these principles. And so that is one of the hardest things that I've had to learn. And I hope that the illustration with baseball made sense to you. If it did, drop a comment. Otherwise, keep being awesome and I'll catch you guys in the next vid. Bye.