It’s All About Taking Losses (April 10, 2015)
you will lose your whole life; learning how to deal with them, and avoiding the large ones is crucial
Reading time: 23 minutes.
This is another classic. Bookmark.
Table of Contents
Small Scale “Losses”
Medium Scale Losses
Life-Changing Losses
While most people focus on hitting financial benchmarks, increasing the quality of their friends, and moving up in the game of life… to do so requires a lot of losses.
It would be great to be Money Mayweather. Undefeated.
But… What you don’t see are all of the “losses” he takes outside of the ring:
sacrificing family time
training at insane hours every single day
film study
self-study
etc
Since everyone will take losses we’ll attempt to outline:
how to deal with said losses
how to avoid “life changing losses”
Small Scale “Losses”
These losses deserve to be in quotes because a small loss is generally part of learning a new skill.
It can also be a loss attributed to temporary bad luck and a quick cost-benefit analysis.
Anyone who has spent some time in foreign countries has gotten burned for a few dollars at least once (okay, more like 10+ times).
The amount is always negligible.
Instead of getting *emotional* over the event, you have to take the loss and move on.
Reiteration…. “Take the L”.
Eventually, you will have a few trusted cab drivers and it won’t happen anymore. There is no point in arguing over the $2.75 gringo surcharge.
The negative energy generated by getting upset over the “gringo tax” just ain’t worth it.
Never will be worth it.
While you *should* be allergic to getting scammed - $3 is not an amount worth fighting over. It is not worth the headache.
Your time spent over arguing and your energy spent over the anger should cost north of 100x that amount.
Use this as motivation to find a good driver and a good set of acquaintances in the future.
Riz says
May 10, 2015 at 1:34 am
It is stunning how many people do not understand that creating negative energy is almost NEVER worth it. EVER.
Giving your ego a rest from time to time will do wonders for you in this regard.
Wall Street Playboys says
May 10, 2015 at 4:01 am
You can tell the size of a man by what makes him angry.
If a guy has his day ruined by a $10 loss… His life isn’t going anywhere.
These rejections are now hilarious.
For one reason or another, the girl looks at you and burns you within 0.17 seconds to increase her self-esteem. You know the answer.
*Genuine* laughter and onto the next.
The funny part about dating is that once you reach a certain level of value… none of these head-turn rejections impact you.
They also don’t register as you become desensitized to any rejection in general.
Naturally, these types of losses are also *most common* with lower-value men since they give off a push-over vibe.
In the rare instances that it does happen, simply “take the L” and laugh.
Game as Fun
<a reply to a loser>
Wall Street Playboys says
April 10, 2015 at 7:37 pm
In your case, you’re not working hard enough.
If you are actually working hard, you hit a “wall”.
You literally cannot work anymore. So you simply stop and go socialize to relax instead.
This is why the pickup community is a complete joke.
They view picking up girls as “work”. It is just entertainment.So you need to work harder until you hit your wall. If you can’t do school work or work an internship, try to start a small hobby business.
If you want to take your first baby step towards success… desensitize yourself to the word “No”.
Why?
You are going to hear this a lot if you work in *any* form of sales.
Every single time you hear the word “No” you’re one step closer to hearing the word “Yes”.
In fact, we’ll go further than that.
If you’re not hearing the word “No” on a daily basis, you are not improving. Take out your iPhone and set up a daily calendar notification: “I must get someone to say no to me at least once today”
Eventually, you won’t need the notification, but the point is clear…
If you’re not getting the word “No” on a daily basis… How can you possibly improve?
It is not possible.
Even if you’re much older and have a long list of clients, you should still spend at least *part* of your day building up future clients.
This is a great way to see if someone is full of it as well. If someone has *not* failed at anything they are, with certainty, not good at anything.
You should already know what we’re going to write here… look no further than old posts here or our previous design!
When you start something brand new you’re going to suck!
This is all part of a big learning process and you should be okay with being embarrassed *at least* once every three months.
Unlike the “awesome feeling of no”, embarrassment is usually a feeling of recognized incompetency.
The learning curve is always the same:
Incompetent
→ Knowledge of being Incompetent
→ Basic Competency
→ Unconscious Competency
→ Third Party acknowledgement of talents
When you recognize you’re incompetent (2) you usually feel embarrassed and it is your job to push through to basic competency.
This will keep you humble in real life.
When you are willing to be seen in a state of incompetence it is going to be very difficult to let your ego and narcissism get to you over the long-term.
How many time should you train until failure?
We believe once a month is adequate to avoid injury.
One day every single month you should train until physical failure to understand that you are not invincible. Physically.
They are several ways to do this:
lose in fight – boxing, wrestling, MMA
train in the weight room until exhaustion – unable to do a single rep
take up an individual sport and get crushed – tennis, golf etc
We are sure there are many other examples (feel free to add them) but you should push your body physically to recognize that:
you are human.
there are always people better than you – physically.
Similar to learning something new and suffering embarrassment, recognition of physical limitations is also a humbling experience.
Small Scale Losses - Concluding Remarks
This piece is short and sweet.
The readers of our blog are self-motivated and don’t need a drill sergeant yelling at them to “get off their butts”.
Instead, after skimming the five items above, it would be smart to do a quick check to see if you’re lacking anywhere:
Are you easily angered by meaningless $2-3 events? If so, start practicing basic emotional control.
Are you easily rattled when a girl turns you down? If you’re over 22 years old… You have either lived a privileged life (need to fail at something life-changing) or you need to talk to at least 100 girls.
Are you upset by the word “No”? Get some form of sales experience… Starting… Yesterday!
Have you embarrassed yourself in the last three months? Either you are completely desensitized and realize you are human or you are unwilling to learn new things. Get out of your comfort zone.
When was the last time you pushed your body to the limit? No that is not meant to be a cooky motivational question. It means: “when is the last time you realized you’re not an amazing physical specimen”? Get out there and find someone better than you and realize there is always room to improve.
Assumptions and Workaholism
The Player says
April 10, 2015 at 7:28 am
Good Post. Two random comments:
1. If one thing that I have totally internalized from “How to Get Rich” is the phrase: **Assumption is the mother of all fuck-ups**.
Never assume, try it and see what happens.
Your mind will come up with loss scenarios.
Most of the things you describe above are learning experiences. If you are facing them, your mind blows them out of proportion. You just have to go through them and you will see that somehow you were able to adapt and improvise.
*Almost* nothing will kill you, but you will come off smarter and with a new lesson learned.
Never Assume. Just do it and see what happens.
2. I don’t read that much. I learned some time ago to filter garbage information out there.
But somehow, I ended up on this article: http://web.archive.org/web/20150324050516/https://jamesclear.com/professionals-and-amateurs.
It was a decent message:
build a system
follow it even if you don’t feel like it
and, to stop freaking yourself out, you need to look at just one week at a time
Now the funny part: I can see how targeting the masses dilutes the message.
Read his “DISCLAIMER” in the article:
Some people might think I’m promoting the benefits of being a workaholic. “Professionals work harder than everyone else and that’s why they’re great.” Actually, that’s not it at all.
WTF is wrong with being a workaholic?
I am putting in the hours to fix the mistakes I made in my past.
I am not his audience and I don’t need sugar-coating. But the masses do. And, they will not even read what you have to write because it will offend them.
So I don’t think you have to worry about them becoming regular readers. Good that you are trying to scare them off, too.
Wall Street Playboys says
April 10, 2015 at 1:57 pm
Solid comment sir:
assumptions go away when you work in sales long enough
agree it results in a lot of screw ups if you assume
being a “workaholic” is seen as bad only to those that hate their jobs. There is nothing more fun than growth.
Just don’t lose your personality in the process! That’s not worth it!
Do you get angry when a dog barks at you?
Zoloo says
April 10, 2015 at 11:24 am
Great post.
As an Asian living in Europe, I often bump on the street / communicate with weak prejudiced people with racist shouts towards me.
As Seneca wrote ”Do you get angry, when a dog barks at you?”
So what I do, is take a pass and it spills over me like walking in the rain.
Wall Street Playboys says
April 10, 2015 at 1:58 pm
Absolutely. No reason to get upset when someone else is a racist weirdo.
As you move up the chain it becomes hilarious. If you approach someone in an amicable way and they turn you down for no reason upon hello…
**Their loss**They just missed out on a huge opportunity because you are extremely valuable.
WSPArchive: The same applies to game. If a girl rejects you, it’s literally her loss and your win. - How often will she find someone like you?
- You wouldn’t want to spend time with a girl that can’t see value in front of her face?
Woman Rejection
b says
April 10, 2015 at 2:46 pm
Also — after you approach several thousand girls, you’re tall and good looking, and on track to make 1M by 30… Having a girl reject you literally makes you confused.
Unless your in a top LA or Miami club with guys who are literally rockstars (or some other super high value thing) it really confuses you.
It’s like “Why would you reject me”?
Reply
Wall Street Playboys says
April 10, 2015 at 2:51 pm
The phrasing of this second comment was hilarious. Literally chuckled.
It’s 100% true. “You seriously won’t even give me 5 mins wtf? Damn you’re dumb!” Lol!
Testing Your Personality
WSPArchive: Getting “No” and awful embarrassments also mean that you’re testing yourself. A “failure” is nothing more than information that something didn’t work. You need that information about yourself so that you can further optimize yourself.
The Player says
April 12, 2015 at 9:22 am
When I say that it takes time to TRULY figure out your strengths, it is because you need to Split-Test your personality.
You might think that you are good at something but when you put it to test, you fail.
Yes, you can get better by trying and practicing. But if you try something else and get better results, that is a better return on time invested.You have to keep putting yourself in different situations and take an honest look at how you performed.
Depending on the industry or the niche you are in, there will be some things that you HAVE to do.
But don’t let the sunk-cost fallacy take the better of you. If you figure out that you can get a way better return with course-correction than sticking to what you are doing right now, change your course.Obviously, you have to put in REAL effort before you make such decision as there is risk/reward to everything and it takes some experience to correctly analyse that. And, you get experience by doing things. Just like this post recommends.
You will experience losses and failures, but they will make you smarter.
To put it in a more manly way – take pride in your battle scars. If you want to earn those scars, you will have to go to the battlefield.
Also – never forget to reward yourself for whatever victories you have.
On that note, it was a good week for me and Sunday calls for a good cigar.
WSPArchive: Another example that most small failures are simply funny. No need to stress them.
Medium Scale Losses
Now we’re onto the good stuff.
After many years of living, you’ll find that *everyone* suffers medium-scale losses.
These hurt *a lot* and we believe they are unavoidable.
We are going to try and outline some basic ones and how to limit the potential loss…
But the reality is that everyone is going to slip up. Get ready to “take the L”.
When you start making money off of your business, the pain you feel when you pay Uncle Sam is going to be immense.
Incredibly so… is an understatement.
The worst part? We’ll go ahead and wager that you’ll eventually make a tax mistake.
Form an S-corp not an LLC.
Honestly… practically everyone is going to go through the same growing pains.
They form an LLC because it is the easiest way to get your first business up and running…
Then… the pain comes.
You realize you paid 15% (or more!) in taxes – self-employment tax buddy!
If you generate $200K in income per year… That is $30,000 USD for nothing.
You are paying an extra $30,000 for public services you don’t use and meals for prisoners (no joke). If you have kids… we will go ahead and bet that you’ll send them to private school instead of the horrific public school system!
While we have highlighted the importance of an S-corp twice, here are some basic housekeeping tips:
Once you clear ~$75-150K in income, get an accountant
Keep every single receipt for your business, everything from that dinner bill to your cellphone bill… keep it *all*
Take 2-3 days out of the beginning of the year and read up on tax code changes.
No exceptions to any of these three rules.
6-question checklist
Nick says
April 10, 2015 at 6:04 am
Really enjoying the past few posts. Each one of these recent posts has shattered one of my previous beliefs.
Eg. “you should enjoy the feeling of no. it means you’re trying to improve in an area.”
Most people think of ‘no’ as something to avoid completely.
You’re teaching us to strive towards ‘no’. Brilliant.Btw, Ray Dalio has a good system for learning from mistakes (applicable for mistakes from medium scale losses?).
Could be useful for readers. It’s a 6 question checklist:
what went wrong
have you made a mistake like this before
what was the immediate cause of the problem
what was the root cause of the problem
what can you do to correct the problem in the short term
what can you do to prevent problems like this in the long term
Wall Street Playboys says
April 10, 2015 at 1:50 pm
Correct. If you’re not hearing the word no… You’re either not asking for enough or you are not getting out of your comfort zone.
As usual, regular people hate hearing the word no “do the opposite” – beating a dead horse we know.
Finally, that checklist is solid.
For medium-scale losses it usually means assigning the task away. Hence an accountant for tax issues.
If all of your income comes from a W-2… there is not much you can do.
We would say your best bet is to avoid *exchange taxes*.
Any time you move a large sum of money there is a high probability that someone is going to take a cut.
As an older mentor once said:
“Stay in the flow of money and you’ll get rich”.
It is true.
When large sums of money change hands, someone is usually picking up a fee.
The easiest example here is any sort of rollover.
Let’s say you roll over money from one investment account to another.
If one is pre-tax and the new one is post-tax… Make sure you look up the rules on *timing*.
If you start your career in New York city and move to Texas…
Wait until you officially live in Texas before moving the assets.
Simplistically, if you move a 401K into a Roth, you are going to pay *both* state and federal taxes.
Texas has *NO* state tax!
This means you should not roll over a single cent until you are officially in Texas.
~7-9% in taxes saved!
(this may or may not have happened to one of our authors)
Wall Street recruiting usually consists of ~5-7 rounds of interviews, if you thought recruiting was brutal… wait until you are on the other end of the table!
If you hire the wrong person it is going to cost you *at least* $100K.
That is not an exaggeration.
Now you know why everyone is so intense and risk-averse.
Why does it cost so much?
Think about it. If it takes 1 month to find a new hire that is lost time.
Lost time is lost revenue.
In a competitive industry like Wall Street, an extra recruiting headache is worth *at least* $20-30K/month to you.
In addition, you have to train the person.
It takes six months to train a new hire!
Even if the new hire is experienced, the training period is still ~6 months.
Let’s add this up. $25K search cost + ~6 months of training (assuming base salary of $120K) = $85K
That is just the tip of the iceberg!
Let’s add on the additional cost of firing a new hire…
After 6 months, you have to use political capital to fire them and you look like a poor decision maker!
This is a hit to your reputation that is more costly than the $85K!
How do you avoid this at all costs? The answer is you probably won’t. But.
Here are a few tips to improve your hiring practices:
create an examination – make the examination extremely specific to what *you* want. If the person naturally thinks similar to you, it will save you a lot of headache;
have at least two junior people and two senior people give their opinions as well. Listen to them. Your team is going to see if you have any biases toward the candidate;
look for tenure. If someone does not move to a new position every year, chances are they are serious about the profession and your current opening.
Successful people have an extremely small set of people that they truly trust. This is for good reason. There are very few people worth calling friends and they are less than 1/1,000,000.
You are going to make at least 3-5 incorrect judgments with regard to character.
Some more bad news. If you have over 10 “friends” that you truly trust… We will bet every single penny that *at least* two of them are not really friends. You just haven’t given them an opportunity to show their true colors.
Once you get burned once - you need to move on.
There is no way to mend the situation.
Instead of harboring anger towards the person, you can be tolerant if you run into them in the future, but do not trust them with anything.
“Fool me once, shame on you; fool me twice, shame on me.”
Under no circumstances do you give them a chance to fool you again.
Let them live with the shame of being an untrustworthy individual. Move on.
By the time you reach the age of ~30, you will likely suffer from *at least* one physical injury. Hopefully, it is not as painful as Mike’s skin battle. But. Something will likely happen.
When you get hit by the event: broken leg, tendon tear, freak accident, sickness… Do not ignore the injury, embrace it.
There is a big difference. If you can ignore the injury it is not an injury. It is simply pain.
Take note of the injury and immediately go to the hospital if it is something clear (broken bone, tendon tear etc.). Then do your own research.
If you go through the process of personal research you are taking action and you are embracing the injury.
Do not sacrifice your body. Health is always the most important part of life.
Once you go through several hours of personal research you will likely find some “out of the box” cures for your ailments. Try them.
You will reap the rewards of being in tune with your body as you will sense your body responding in either a positive or negative fashion!
Now you’re much more educated on a new health topic and you have improved your recovery time.
Medium Scale Losses - Concluding Remarks
Medium-scale losses are painful and unavoidable.
Accept that you are not perfect starting right now and you will be well prepared for the pain.
Why is it unavoidable? Read between the lines.
All of these medium-scale problems are due to *missing details*. We really need to emphasize that point.
You will make medium-scale mistakes due to *missing details*.
You incorrectly lift.
You incorrectly judge a person’s character by avoiding details.
You breeze through an important piece of the interview process.
You focus too much on revenue generation and forget to look at the structure of your business…
It happens.
Any time you are *growing* at extremely rapid rates, you’re going to make at least one painful mistake.
This is 100% normal.
Most smart people pay *too much attention* to detail and miss the most important aspects.
Better to take the painful medium-scale losses here and there (in exchange for growth) and avoid the catastrophic Ls.
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Life-Changing Losses
Now we’re onto the more serious items.
Avoiding life-changing losses. AT ALL COSTS.
There are very few things that can ruin your life, but if you make the wrong choice it’s going to take years to recoup the losses.
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