In my post last week I wrote about taking time to review Q1, and having done that myself I’ve had the chance to review all the notes I’d taken in my best self journal. These notes are typically nuggets of wisdom from what I’ve read and listened to- distinctions, ah ha’s, quotes and more.
I always enjoy reviewing the notes I’d taken in a previous quarter, and what’s better- if I can share a thought or idea with someone who benefits from it. My wife and kids are generally bombarded with my recounting of what I’ve heard/read (bless them) but hopefully this particular perspective I’ve chosen to share will resonate with some of you reading.
This one comes from a poker analogy Darren Hardy was using to highlight a perspective we can choose to have in regards luck, skill and the compound effect (top book by the way, The Compound Effect). He referred to a professional poker player called Greg Reymer, nicknamed “Fossilman” (for his hobby of collecting fossils). Fossilman’s perspective was summarised along these lines:
“You have to be realistic about how much luck is involved in whatever you are doing and after that you kind of ignore it. You then have to ask yourself, what’s the smartest decision that I can make now? And ignore the results in the short term as they are irrelevant”.
So how does this translate to day-to-day life?
To further unpack the analogy of this poker player’s perspective with different life circumstances, here is my summary of what Darren was sharing.
We are all being dealt new hands of cards, not just the ones we were born with, our family etc, but also being dealt new cards everyday – ie things that happen in our businesses, things that people might say to us that unexpectedly has an emotive effect…it could be any number of things big or small, like the printer not working just when you need to print out an important form. These are all metaphorical ‘hands of cards’ you are being dealt – and the challenge as Darren puts it is not to get too emotional over what we can’t control it, it just is what it is. The only question is- Now what? – can we draw on our skill and make the most of the hand? If there is nothing we can do on the skill side to change the outcome, well that’s when in the game of poker we’d choose to fold, with no emotion. In other words, accept the fact the printer is not working, right now, there’s no point in getting hysterical and kicking it.
[I’m so conscious that summarising this that there will be certain ‘hands of cards’ dealt to some people in the last few weeks that have been horrendous and I know that these global challenges really test the mindset of “things happen for you not to you”. That’s a very difficult perspective to take at the moment but the unexpected positives and gifts are what we need to look for. The entire world is forging character right now, finding gratitude, becoming more resourceful and helpful.]
Back to the takeaways from the poker analogy – no matter the luck, skillful players will increase their odds over time by making better decisions with the cards they are dealt, and that ultimately gives them the upper hand.
Fossilman says, “there is luck and there isn’t – some things will be unlucky and the challenge is to ignore the results in the short term, they are irrelevant, but skill applied over time eliminates the luck. Over time, it’s only skill that matters.”
Darren then took this a level deeper, he said it has less to do with skill and everything to do with character, here’s what he meant – because skill needs the long time horizon to overcome any odds it will take the character of discipline and work ethic, and resolve applied consistently over time to ultimately succeed and then sustain that success. ‘It’s the compound effect of that applied skill that guarantees your becoming a winner.
To borrow Hardy’s words, “This should be good news to hear – it means your outcome is not determined by the cards you are dealt, you just need to keep applying the skill of making the right, even small, seemingly insignificant decisions consistently over time and it will compound and overwhelm any odds of bad luck.”
“The compound effect guarantees your success no matter your luck or lack of it – the key is consistency and that requires character.”
As challenging as this message is, I felt it carries a strong sense of perspective and resolve that may be helpful for some to read right now.
Most successful property investors look at the long term time horizon and enlist time as their ally, and now we are specifically focusing in on the decisions we make in the moment and the character we choose during these challenging times so that we can ignite the compound effect.
What resourceful and solution oriented decisions/actions have you made in the last couple of weeks?