As I was crossing the street holding a small gift for my bookkeeper I was thinking about why I was bringing a gift. It was a small gesture that cost only $5 and five minutes of my time, but I felt good about bringing it, and I was hoping it would brighten up their day. Then it occurred to me: if someone came to my office with this small gift, it would sure make me happy.
1. Do unto others as you would have them do unto you.
Like Jim Rohn, I am also an amateur on the Bible. But with a little help from Google and Wikipedia, I do know that inside there’s a verse called Matthew 7:12, and according to Wikipedia it goes something like this:
Therefore whatever you desire for men to do to you, you
shall also do to them; for this is the law and the prophets.
This is also known as “THE” golden rule. On this same track, Zig Ziglar used to say, “You can get whatever you want, if you help enough people get what they want.” Think about this for a second. Can you trace any of your frustrations to times when you were focusing on yourself? For example, in traffic? I know I can! When someone is not driving to my expectations (drives too slow, doesn’t signal before making a turn, etc.) I get frust… fascinated! You can integrate this thinking into your business, your relationship, or your happiness in general. As you shift your focus from yourself onto the person or client you care about, you will not only feel better, but also achieve greater success. No matter how much our society and the media wants to convince us we are only focused on ourselves, real fire inside of us starts only when you start to give. Tony Robbins sums it up very nicely: “The secret to living is giving.”
2. Men are developed the same way gold is mined.
As I kept walking from the garage towards my bookkeeper, I thought about this golden rule and remembered another golden rule I read a while back in a beautiful, timeless bestseller: How to Win Friends and Influence People. I read it for the first time five years ago, and then two years ago I listened to an audiobook. I would recommend this book to absolutely everyone, and especially to business owners, CEOs and leaders in the making. There are some incredible gems inside this book! One of them is golden.
“Men are developed the same way gold is mined. Several tons of dirt must be moved to get an ounce of gold. But you don’t go into the mine looking for dirt. You go in looking for gold.” – Dale Carnegie
This was an eye-opener for me personally, especially since every leader is keen on personal development. Meaning, the same practice for developing your team, you can use to develop yourself. Play on your strengths, mask your weaknesses, and find someone or something to replace your weakness. Find someone whose strength can replace your weakness. Compliment your team when they do great work, as that will inspire them to do more great work. When they make a mistake, help them learn from it so that you have someone in place who has already made this mistake.
Looking for the gold will turn on your “reticular activating system” (RAS) which will help you find more gold. If you don’t know what an RAS is, the best and easiest way to explain it is for you to remember that time when you bought a car, or shoes, or brand of sunglasses and then you started to notice them everywhere. Those things were always there, but now you are noticing them because your brain now looks for them. Same with business opportunities, the perfect soulmate, and your goal in life.
Oftentimes, myself included, we fall pray to negativity and depression after we fail at a task again and again. We start to see so much dirt that we even neglect the gold we find. We justify it with, “Oh yeah, we were lucky,” “That’s the norm,” or “That’s still worse than xyz.” I once heard Arnold Schwarzenegger, in a motivational speech, say: “Nothing can replace hard work.” I can relate to him saying that because body building is a great example where you have to put in the reps, training, proper diet and whatnot to get the results. There is no amount of reading, talking, or motivational videos that can bring you results. You have to remove a ton of dirt so that you can get an ounce of gold. There are no shortcuts.
Once I thought of these two golden rules, I figured that if I could find a third one, that might turn into a nice little blog post. I didn’t have to think much, because even before I could open the door of the building I had the third golden rule.
3. Buy gold when it’s cheap. Sell gold when it’s expensive.
“Buy low, sell high” while having “asymmetric risk-reward” and “opportunity cost” in mind. It took me a few years to learn these terms, so I’ll explain them here just in case you aren’t fluent in the language of the sophisticated investor.
Buy low, sell high is pretty simple, and the simplest of the three concepts. That’s also why so many people lose money on it. They think they are “buying low,” until they realize they are not, and by then it is already too late. It took me a while to realize I have always been in the business of buying low, selling high! Oftentimes people classify this as value-added service, reselling, or investing. You can also buy a book or a course, acquire some knowledge (buying low), and then provide value to the marketplace by offering solutions and get your return with a much higher dollar sign (selling high).
I’ve learned that this concept becomes especially fun and powerful when you mix it with the other two: asymmetric risk-reward and opportunity cost. If, like me, you are not an economics major, there’s a good chance you’ve never heard of these two terms. After I learned some people made millions of dollars on account of them, it took me five minutes to understand them. Now don’t get me wrong, understanding something and doing something on a daily basis are two completely different things. You don’t get paid for what you know. You get paid for what you do. So what I can do here for you is help you reach the first step, which is to understand these two very powerful concepts.
It is what you do that defines you.
– Batman movie
Let’s start with the easier one, and the one you will need first: opportunity cost. If you don’t have any savings and are struggling financially, I am almost positive you don’t know what opportunity cost is. And even if you do, you are then ignoring this rule completely. I’ll explain by using an example of a smoker. I don’t have anything against smokers; I was a smoker for more than five years, and quit smoking almost 10 years ago. Why? My granddad died of lung cancer, and I was so broke that I couldn’t afford to buy my own cigarettes. I was sick and tired of being sick and tired. Cigarettes are a great example because most smokers buy them every single day. So hypothetically speaking, let’s say a pack of cigarettes that you would smoke that same day cost $4 where I am from. If you are in the US, this can go up to $6 or $7. But anyway, lets go easy, and say you would spend 30 times $4, a total of $120 that month on cigarettes. We both know that smokers don’t smoke for one month and then quit. Which is another reason why this is a great example for explaining opportunity cost. Let’s say a smoker smokes for 30 years (or 360 months). He would spend roughly $43,200 on cigarettes. And again, we both know that sometimes smokers buy more than one pack per day, AND that the price of cigarettes always goes up. If you used that money to start a business, acquire a client (with an ROI) or invest in the stock market, anything that could give you a return greater than $43,200, that’s opportunity cost: the cost of a missed opportunity. I think we can both agree that at only $4 per day, or $43,200, it’s pretty darn high!
If you are thinking, “Goran, that’s great, but I am so broke, I can’t afford cigarettes, or I am not buying cigarettes at all!” No problem. I was there; here’s what you do. Opportunity cost also applies to your time. For example, watching TV, playing video games, etc. Again, I was playing video games for 12 hours a day (if not longer), and watched so much TV as a teenager that it might be one of the main reasons why I dropped out of high school. So when I write this, don’t think I have anything against playing games or watching TV – I was there. Allow me to explain how opportunity cost applies to your time. Let’s say you are watching three hours of television every day. Or nowadays, people spend that amount of time on various social media channels, so you could use that as an example as well.
3 hours x 30 days x 12 months x 30 years = 32,400. That’s over 32,000 hours, and that’s IF you stop watching TV or browsing social media after 30 years. And that’s IF you only spend three hours doing it every day.
During that time you could learn several new skills, start a small business, become a better lover, make new friends, travel the world, plant a forest, help people in any kind of need, you name it. It is very hard to quantify and compare the return on investment from watching TV to that of becoming a brain surgeon (could you become a brain surgeon in 32,000 hours?) or a romantic lover, BUT it is a great philosophical question, and a great explanation of opportunity cost. I know I sound like a productivity junkie, and I am, but I am not saying you shouldn’t rest a minute in your day; rather, I am saying don’t spend over 60,000 hours watching TV during a 60-year period. I remember reading somewhere ( – and there is a heated discussion on who to attribute this quote to) – anyway, I think Gandhi said to his assistant that he would meditate today for 20 minutes. And then his assistant replied that he doesn’t have time in his very busy schedule for today! To which Gandhi replied, “Then I will have to meditate for an hour.”
Finally, the asymmetric risk reward. It sounds more complex than it really is. Since I am into search engine marketing, Google AdWords and conversion rate optimization, I’ll use that as an example. Let’s say your asymmetric risk reward is 1:10. In a nutshell, it means you risk 1 for the chance of getting back 10. For the sake of this explanation, let’s say, U.S. dollars are in question. For example, your cost per click on your AdWords campaign is $1 (I know, very low, haha), and you know that if that website visitor converts to a paid client you will get $10. (For the sake of this example, let’s ignore customer lifetime value.) But this is where many people get it wrong! They think that this is asymmetric risk reward. The truth is, sophisticated investors are 100 percent sure that 1 in 10 will convert! So they spend $1 knowing that in 10 clicks they will get back $10! It’s not an idea that, “If the website visitor converts, I will get it”; they know it will convert. Those are the types of opportunities they are looking for! If you spend $11 for 11 clicks, and only 1 person converts with a $10 return on investment, sooner or later, you are going to be out of business. Unless you cross-sell, up-sell, ask for referrals, sell subscriptions and “work hard and smart,” but then you are just increasing your asymmetric risk reward from 1:10 into 1:20. This is still asymmetric risk reward, but it’s not the same comparison. A great asymmetric risk reward is 1:100, where you risk 1 for the chance of getting 100. That way, you can miss 98 times, and still come through.
Rich people plan for three generations
Poor people plan for Saturday night
– Gloria Steinem
In conclusion, I really think that by living these three golden rules every day, you are going to be exponentially better than you were supposed to be a month from now, a year from now, a decade from now. I know it’s extremely hard to plan for the future and look decades away, but that’s one of the traits that separates the ultra-rich from the mediocre and the poor. Long-term thinking and delayed gratification go hand-in-hand when it comes to securing wealth for yourself and your family. Thinking long term also has a nice spin with opportunity cost. You shouldn’t think of your $100 phone plan as “just $100 a month.” Instead, see it as stealing $1,200 from you every year and $17,300 from you every decade. Jim Rohn used to say that it’s not what the TV will cost in dollars, it’s what it will cost in time spent watching it.