According to Dr. Jeff Spencer, the default reaction of the human mindset is not satisfaction but instead a craving for more. We assume having more is the solution to everything. We spend more as we make more. We make more and then take on more risk. The consequence of more risk is that then we have volatility (sleepless nights, upset employees, upset vendors, and failed investments).
Instead of focusing more, we must get clear on what we want. Not what someone else wants. In my work, I coach people to play and rig their own games, not someone else’s. One of the ways I do that is by helping them blend the least amount of effort with the least amount of risk and the most options.
Getting clear on what you want can be anxiety-inducing. You will have to wrangle with your desire to default to “more.” That shows up in the desire to have everything now. It also shows up in the fallacy that there is a right and wrong to what you want.
You will also have to confront that when you define what success looks like, you’re also defining failure. If you don’t reach your definition of success, you may deem yourself a failure. Because of loss aversion, most are unwilling to define failure.
To compound matters, when we do attempt to define what we want, it often creates even more anxiety. That’s because what we’ve defined is a multi-variable equation. Sorry, here comes some math.
See, if you’ve ever tried to solve for x in an equation like x + y + z = 10, you know it’s impossible. That’s because this is a multi-variable equation.
This is the race we run against ourselves with the things we want. For example, if you say to your spouse, “I want to buy a car,” they might flatly say “no.” Without knowing your motivations for wanting to buy the car or theirs for saying “no,” it’s hard for either of you to solve this problem (in other words, make the right decision).
But let’s say instead, they humor you and request more information. When you simply requested to buy a car, you didn’t provide them with what I call a Solvable Problem™. At the simplest level, assuming you’re not Scrooge McDuck-wealthy, they don’t know if you can afford this car purchase yet.
Who knows, maybe you want a collectible that’ll cost $750,000. (I’m not a car person, so don’t push me on specifics.) They might ask things like:
● What kind of car?
● How much does it cost?
● When do you want to buy the car?
● What are the interest rates?
Then they might ask whether you’ll trade in your current car, put cash down, consider leasing, etc. In getting those answers, they have all the necessary inputs to do the math and solve whether the request is possible.
When wants aren’t clearly defined, we can’t solve our own equation. We can solve how much we need to fund our priorities with the necessary variables. And then, we must reckon with ourselves.
As quoted earlier in this piece, Dr. Jeff Spencer is an Olympian and coveted coach to athletes who’ve won Olympic, World, National, and Tour De France Gold Medals. He’s also counseled some of the business greats. Spencer’s number-one advice for high performers is a single word: restraint. He explains that “the keyword in the champion’s vocabulary is restraint. We have our best day, week, or month, and at that point, we are at the highest risk of pushing just a little too far and blowing ourselves up.”
All too often, an athlete, executive, or entrepreneur has their best week, month, or season ever, and instead of settling into the new level of play, they try to push just a little bit harder when the best move is to recognize the progress and ride the wave. It seems counterintuitive to “ride the wave” instead of push harder, but it’s often the difference between getting what you want and, as Dr. Spencer says, “blowing yourself up.”
Allow me to put this concept in terms of a trip using Google Maps. We all know how Maps works: You input where you are and where you want to go, and Google gets you there using real-time data on factors like traffic, closures, and accidents on your route.
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Here’s the problem with how business owners approach this idea: They aren’t clear on where they are. Nor do they have much more clarity about where they want to be. But they’re trying to go somewhere. Here’s a recent example of why this is so important:
A client came to me and said, “I need to make enough to pay someone else to do these tasks so I can get 10 hours a week back to think and spend with my family.”
We did a quick exercise to figure out how much more he would need: I asked many questions and found out that this person was willing to pay $10,000 a month extra for salary with a little wiggle room. I kept asking questions and discovered that this person drove 55 minutes each way, six days a week to the office.
This may seem unimportant, but watch how we turn this into a “closer” problem instead of a “more” problem: I told them, “Alright, an office space five minutes from your house is $2,500 a month. So there are 10 hours of your time back in just drive time. So now you have your time back and only $2,500 to cover.”
Boom.
Next, I suggested he go through his bank statements—business and personal—and cancel every recurring payment he could live without. I told him he could add them back in later if necessary.
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This approach is what I call the Two Oreo Principle. A few years back, I was self-reflecting on how I gained 10 pounds. What I realized was after moving to a new house, I started raiding my wife’s snack cabinet. That amounted to me adding, on average, two Oreos a day to my diet. See, day to day, I didn’t think much of eating two Oreos. I mean, it’s only two. However, each Double Stuf Oreo has 70 calories. And if you eat two a day for a year, that’s 51,100 calories or 14.6 pounds. There was the weight.
Our financials are littered with scenarios like this: small transactions that, on the surface, don’t seem like much but, over a longer time, add up to a lot. So really, the Two Oreo Principle is a fun way to describe compound interest.
I encourage my clients to at least review quarterly and look for their two Oreos.
For the person looking to get 10 hours back, the Two Oreo review resulted in the following:
● Gaining back 10 hours a week
● Eliminating $3,200+ in recurring expenses and subscriptions
● Getting time back without having to do more work or invest more time
This is the difference between focusing on “more” being the answer and getting “closer” to what actually matters to you.
Unless you run a massive corporation, your resources are limited, and driving around in circles is a waste of time, money, energy, bandwidth, and just about everything else.
To ensure your trip lands you somewhere you want to be, you’ll need to input an end destination. In non-metaphor speak, you need to get your priorities—what you really want out of business and life—set. After that, it’s a matter of ensuring every decision you make or course of action you follow gets you closer to those things.
About the Author
Dan Nicholson is the author of Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms, deemed a best-seller by USA Today and The Wall Street Journal, among others. In addition to founding the award-winning accounting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certified Certainty Advisor, a professional certification he runs through CertaintyU. Certainly is a program that teaches business owners methods for increasing financial certainty, minimizing risk, and engineering cash flow. Dan also developed the Certainty App, a financial tool built for entrepreneurs based on the ideologies he teaches. Dan also hosts the Rigging the Game podcast, a resource for entrepreneurs who want unconventional tips to win at business, and is a Consulting Producer for PBS’ Opportunity Knocks. You can learn more about Dan at https://riggingthegame.com.
