Community AMA September 2022
Chris Sparks answers ten of your questions in the first AMA he’s hosted in two years.
Questions:
(00:30): Your clients with the best outcomes, what do they have in common?
(03:55): What provides the most leverage in your life?
(09:50): How do I unlock compounding results?
(13:31): How do I stay humble enough to follow a process in real-time?
(19:56): What mistakes did you make in your self-improvement journey?
(27:37): What did you use to believe was true, but you changed your mind on?
(35:41): How do you recommend starting your day?
(42:14) What have you learned about investing?
(47:47): Why did you retire from poker?
(54:14): How do I become a better game player?
Watch the video above.
Audio recording, resources mentioned, and full transcript below.
Conversation Transcript:
Note: transcript is slightly edited for clarity.
Chris (00:05): Hey. This is Chris Sparks, and welcome to the September 2022 edition of AMA, Ask Me Anything. I've gotten some excellent questions from you guys, thank you for sending those. I've chosen ten which seem the most interesting. I've combined a couple questions together to try to cover the most ground that we have. And yeah, let's get to it. I'm gonna tackle these one by one.
So, the first question coming in:
"What do the people you work with who have the best outcomes have in common?"
I get asked this one a lot, and I think it's an interesting one, because, what can we do in order to have the best outcomes? I've been very fortunate to work with about a hundred people at this point. Entrepreneurs, executives, investors. And I definitely see common patterns. The first one I would say is self-awareness. I think all improvement is seeded with awareness. So this is a willingness to look. What is happening in your life? What is going on? And being objective about where you are at, this ability to take this outside view. So the first I would say is "awareness."
The second would be this willingness to experiment. Another way to think about this is exploring, iterating, trying things, seeing what works, doubling down on what works, course-correcting if things don't work. This is something where I say the speed limit is your willingness to experiment, where if you aren't trying things, if you aren't putting them into action, it's going to be difficult to build upon that foundation. So that's definitely a commonality that I see with clients who go on to have, you know, really big outcomes while we're working together, is that they're just willing to try things.
The third I would say is a clear vision for the future. And this isn't necessarily something that everyone knows up front, but they are trying to work towards "Why am I here? What is my purpose? What am I trying to create?" And this having a really strong "why" that's driving them forward obviously creates a lot of momentum and willingness to push through, but also being clear on what we want, we can go directly at it. Think of this as the most direct path. There are many paths towards what we want to achieve, but the clearer you are on what that is, the more directly you can go at that.
The last one I would say comes back to prioritization. And the way I think about prioritization is that the important things come first. And particularly, this means that the things that no one is asking you for happen before the things that are really urgent, that feel like they're catching on fire. That's a commonality amongst people I find that go on to great outcomes, is that they're able to find ways for the important things to move forward even when conditions are suboptimal, when they're busy, when they have a lot going on. So that prioritization, those order of operations, I find really critical. If the things that are most important to you are only happening when it's convenient or when you feel, you know, most relaxed, that means they're generally not going to move forward as much. So that's really the flywheel, is that the important things are coming first.
Question two:
"What provides the most leverage in your life?"
So, first, I would start by just talking about leverage. And I think of leverage as a multiplier, maximizing output per unit of input. And generally, this is going to take the form of a one-to-many, that you are doing something one time and it's affecting many occurrences in the future, or you're taking something that would affect one person and it affects many people, or you are improving something that's going to happen many times to make on improvement, but it compounds out into infinity.
So, you know, let's say the three commonalities, you know, they multiply output, they are recurring actions, and they have a sense of scale.
So, a few things that I've seen personally that I've tried to help clients with, you know, the first one is just creation of processes. So what we want to avoid is just reinventing the wheel every time that we do something. And by creating a really basic minimum viable version of a process for something that we do all the time, we automatically become attuned to ways to improve that process. I like to think of it as every time we touch it, it gets a little bit better. So that's what I'm trying to do, is just raise the bar little bit by little bit. Every time that I do something, I'm saying, "Well, hey, what's one thing I can do next time for this to go even better?"
One thing that we do all the time that I think we overlook is just making decisions. So I'm trying to get away from needing to make decisions on the spot by creating what I refer to as "policies," where I decide once, "Here's what I would like to do in this situation," and I commit to following that policy for a time period, and rather than every time that I face this type of decision having to rethink, "How am I going to do this," I just trust that policy, knowing that regularly I'm going to audit it.
So, you know, there's so many examples of this. A classic one that I give is, you know, there's a cookie sitting on a kitchen counter, and eating a cookie any given time doesn't really matter, but if I eat a cookie every time I see one, that's gonna matter a great deal. So I decide, "Hey, every time I see a cookie, I'm gonna put the cookie away." And I can change that policy later, but by making it one time I can just trust myself to follow it, rather than needing to, "Oh, I'm not gonna eat the cookie," or feeling bad about eating the cookie, that type of thing. When you start to pay attention to this, you'll see all the times you're making decisions on the spot where you could have a really good policy in place that you then improve over time.
Thinking about this in terms of business, a common thing that I see is, "How can your work be repurposed?" So, thinking about this, any sort of writing that you do, any creation of an artifact, can that be open-sourced amongst your team or amongst your audience? Something like, the things you're already doing, can you get more value from them?
I think the biggest source of leverage within an organization is vision and culture. So, defining what you are working towards and continually talking about that, finding things that you can be doing to move forward towards that. I think of culture as decision-making at scale. So every time there is a decision on the organization basis, thinking about "How would you like this decision to be made if you weren't in the room, any time that someone faces this without you?"
And this is really a big part of being a leader rather than a manager. So, I'm not big on management, I'm big on leadership. And the biggest component that I see is giving your team a sense of ownership, where they know what they're trying to achieve, they have the resources they need, and they have lots of latitude to work within those guidelines, so that you have empowered them, rather than the opposite being, "Hey, every time they need to do something, I need to pull you in." That's how you become the bottleneck.
So your conversations become more around, you know, "What are you prioritizing? What is coming first?" So, it's less of telling them what to do and more making sure that they're doing the most important things. This is a key part of what I refer to as self-organization. This is one of the biggest leverage points that you have within the system that's in your business, is that team members are automatically iterating and improving without you even being there. You can just remove obstacles from that process to maximize their growth rate. This is the classic, "Are you working on your business or in your business?" Trying to maximize the time that you spend doing things that unlock future opportunities, streamline efforts rather than just executing and doing one-time activities.
So, yeah, I'm always looking for ways to maximize leverage, because this is just unlocking more things in the future in terms of opportunities, and that's how I'm multiplying all of my efforts.
A good follow-on question to this, number three, is,
"How do I unlock compounding results?"
So first, just compounding is that you are reinvesting gains. So anything that comes out, think about interest. You're reinvesting that interest, so that the overall pile (in this case of money) is growing larger, so the percentage is of a larger base amount. And the way compounding works, because it is an exponential curve, is that it gets more and more interesting the longer your time scale, where in the beginning compounding isn't really something that you notice, but as you go out over years or a lifetime, it gets really, really interesting. I think the classic one is, you know, Warren Buffett, for example, has made 99% of his money after the age of fifty-five. And if you think about that, that's really crazy. And the thing is that he has just had a lifetime of compounding. So when I think about this on a personal level of creating a life that has continual compounding, I'm thinking about having a rising foundation and a higher ceiling. In investing we would call these "higher highs and higher lows."
A couple things that really apply here, first, is I'm always thinking about, "What are the habits and systems that I can install that continually create time for me?" So this is usually things that are planning, reflecting, or different types of architecture that allow me to perform better, to show up more in everything that I do. That if I install these and I commit to continually iterating on them, they will spit off time as this interest. And then I can go and reinvest this time into things that are very valuable, either into continuing to add new habits, new systems, or improve the habits and systems that I have, thus increasing that return on investment, or deploying that time to things that are very high-value. Right? Continually thinking about this raising foundation, is that the things that I do will have a higher average importance. That the average monetary value of my time is gonna go up over time as my opportunity set increases. As I become more capable, as I build my network, as I become more attuned to the things that are most aligned, the things that provide the most value. The average value of my time is going to increase, so as more time is created I'm investing that in places that are more and more value over time, which will then go to create greater and greater opportunities.
And so you can see this being a true flywheel, is that through this process of continual reinvestment, not only are we unlocking more time, but the opportunities that we have to redeploy this time become more and more valuable over time. So that's how we start to have compounding results, and that's how our graph, as a person, our trajectory, starts to go up and to the right. We become exponential.
Question four:
"How do I stay humble enough to follow a process in real-time?"
If I go back in time, say I'm writing a letter to a younger version of myself, the advice I would give myself would be to trust the process. And I think that the real key habit here is to separate your planning from your execution. So when I talk about the habit loop in Experiment Without Limits, it's that we have three stages in this loop. We're planning, we're executing, and we're reflecting. And where I see a lot of people go astray is that these stages become blended rather than being discreet transitions. So by separating planning where we decide what to do from the execution, from actually doing it, this allows us to trust the plan and to follow through with it, knowing that when we reflect we will identify ways to improve the plan. And just being able to trust the process and execute allows us to move faster with more conviction. We're not holding ourselves back, we're not doubting, we're not trying to figure things out in real-time, we're just doing the best we can with the resources that we have. This is the best information that we have right now.
So, what are a couple things in terms of mindset that I've found really helpful? Well, first you use the word "humble." So when I think about humility, I really come back to a sense of curiosity. So the phrase that I really like here is that knowing is the enemy of learning. That if I think I know what is best, that is gonna close me off to this sense of curiosity, of discovering what is to be learned. So by being curious, I feel that it's, you know, there's a magic that is happening in this moment. It doesn't matter if I've done this habit, this process a million times, that every time I do it it's going to be a little bit different. There's something that I can notice, something that I can learn, something that kinda can be uncovered about who I am or, you know, what's going on in this moment. And it's already happening, it's just up for me to notice it. So that comes back to being open to it, where I don't know what's happening, I don't know what's going on, but I'm observing, I'm being aware of being curious.
So that's what I think about in terms of being humble, is that I don't know, but I'm very interested in finding out. But maybe we can invert this, and maybe it's not a question of humility all the time. Think about this as confidence. Well, we look at leaders across time, and something that we see is that they understand what decisions matter and what decisions don't matter as much. The classic example of wearing a black t-shirt every day so you have one less decision about what to wear. And the idea here is that you are conserving your mental bandwidth for what matters most. That you already created this process was your best guess about the best way to do this. So, follow that process rather than trying to perfect it right now, and you can redeploy all of that thinking towards the things that you don't have a process for, that you aren't quite sure how to do. Like, knowing that you're gonna be able to improve this later, you can conserve that mental bandwidth.
Like the, you know, you have the RAM on your computer, and the more programs you have open, the more places your focus is diffuse. So by being able to close this process of "how do I do this, what I'm doing right now," just follow it. It allows you to be more focused, more present, more in tune with what's going on in terms of what signals you're receiving from your environment.
So this is the opposite of humility is, what you're doing is really important. That's why it's so important to trust that process.
Another thing mindset-wise is, think about this as a way to challenge yourself. One of my key life philosophies is that if I try my best I have no regrets. So a common form of self-sabotage is, "Well, if I would have done what I, you know, I know I could do, I would have performed better." And this is usually some sort of fear that, “Hey, if I try really hard and I fail, then I am a failure”. And really trying to get around this trauma, this fear, this Samskara of, "Hey, let's be curious about what happens if I really put all of myself into this thing. And if I have no excuses later, then I have no regrets. So this, by following this process even though I'm a little bit resistant to that routine, this is a challenge, let's see what I'm made of." And that this creates this learning fuel, that if I know that I solved for this variable of effort and follow-through, then that will allow me to zero in on this place for improvement best, but if I'm half-assing it, I don't really know why I failed. It's really hard to uncover that lesson.
So I think it's a blend, a superposition, if you will, of humility and total confidence and conviction. And I think a lot of wisdom is to have that confidence and conviction while you are following the process, but then the humility to go back later and reflect and say, "Hey, how can this be improved?" But the importance of separating that reflection, that planning, from the following process itself.
Question five:
"What are some mistakes that you made in your self-improvement journey?"
Well, I do have the benefit of some hindsight, and you know, sometimes things that I might think of as mistakes might've turned out to be great things to do, but I do think that I have learned some really valuable lessons along the way. Some of these, I think, would have been difficult to learn without experience. Others of these, I think I can certainly save you some time and effort.
So I think the first one that I am very confident on is the importance of having clear goals. I look back to my younger self and a lot of what I did felt like I was just collecting a pile of knowledge in pools, like a dragon hoarding all of this gold that I don't even want, I'm just driven to read more books, read more articles, listen to more podcasts, try more tools, try to like accumulate all these things that are gonna make me better, more capable, more productive. And a lot of times I didn't know why I was reading something, why I was learning something, why I was learning this tool. I thought I could just have it in case I needed it. And I think the much more effective approach is to work backwards from a desired outcome. And the great thing about working back from a desired outcome is that we can uncover what is most holding us back from being the person who can achieve what we want to achieve.
So, just to unpack that, there is one thing that is most holding you back, and to concentrate your self-improvement, your learning, your habits, your systems on removing that bottleneck so that you can become the person who can achieve that. So this is much less of a grazing approach and much more of a deliberate practice, like, direct-attack approach. It all starts with working backwards from a clear goal.
A few smaller but I think no less important lessons that I've learned about self-improvement is first that it's so important to have a team that you're doing this with, to have a sense of community, to not go it alone. I think I really placed a lot of emphasis on becoming a really productive person rather than, "What do I need to have in place in order to achieve what I want to achieve?" And I find that things can be much easier and much more fun if you have a team that you're doing things with. I like the line from the Tao Te Ching that the biggest winners don't compete. In my younger years, I think I was very competitive. I looked too often at what others who I saw were successful and I tried to copy what they were doing. I was really driven by this kind of internal fear of not realizing my full potential or anxiety that I'm not doing everything I could or feeling behind, and now I really come back to this sense of trying to have fun. That, hey, we're gonna be doing this for a long time, we might as well have fun with it, we might as well have this sense of curiosity.
And a lot of this comes from feeling like you're working with people, rather than competing against them. And the great thing about having people on your team is that they can point out your blind spots, they can show you where, you know, all the bodies are buried, in the sense of like there are holes that you're gonna trip and fall into on your journey, and you can say, "Hey," like, "Don't do that." Like, "When I did this, I actually learned that this was a better approach." So you can learn from others' mistakes, which is much better than needing to learn from your own experience.
And also, there's so many places in life where there's just these brick walls that you keep running into, but with the benefit of a community you realize that they're actually velvet ropes, and if you have friends that you can count on who you're working with, they can say, "Oh, sure, yeah, come on in, lemme just lift this velvet rope for you," rather than just continuing to run into this brick wall that you thought was there.
I mean, so many mistakes here. Another one, I think, with the benefit of hindsight, I think I placed too much emphasis on thinking and not enough on feeling. So that's been a real growth area the last few years is getting in touch with my feelings, getting in touch with my body, and really placing a premium on having a strong mental game, positive mental health. Being the type of person who can show up and be present day after day, and recognizing all of these places where I'm putting myself in a box, that I'm limiting myself based on not being in touch with what I want, or being motivated by fear rather than love, or running away from what I don't want rather than moving towards a vision that I do want.
So a lot of that comes back to practices to get in touch with myself, to be more self-aware, to be more present. And to be able to process the feelings that naturally come with doing hard things. So that's something—I thought I could think my way out of things, and I'm realizing that I under-developed my feelings just like, you know, the guy who goes to the gym and only does bis and tris, never works out his legs. So becoming more balanced, that's something that has been a real area of focus.
And the last thing is thinking of productivity as a problem to be solved. That I could become this mythological productive person and then ride off into the sunset. That, okay, I need to first finish, you know, figuring out productivity, and then I can do all the things that I want to do. And that's just a total—I don't wanna say "waste of time," but a total distraction. Because first, treating productivity as a problem is the wrong approach. Like, we're already doing things, this is an opportunity to do things better. First thinking, "Hey, what do I want to achieve and what are ways to move towards that more effectively?" And that's why I've really shifted to thinking about productivity in performance as a force multiplier. That it is just one part of the equation rather than the whole equation, and that I can improve moving towards what I want by getting a clearer picture of what I want and removing obstacles to moving towards what I want. That—Becoming more productive, right, it's just a multiplier, but if I'm not taking action, if I'm not clear on what I want, it's like I'm multiplying by zero.
So that's, with some maturity, a few things that I have learned. And man, I'm sure that I have many, many more, and a lot of that comes back to doing the regular reflection and willingness to look at the ways that things could be going better. Not that there's anything wrong with me, but that there are many opportunities, and I have the opportunity to decide which opportunity I want to go after.
Okay, halfway through. We've got five more questions.
Question number six:
“What did you use to believe was true but you changed your mind on?”
So, some quick hits here, and some of these will have some overlap over things that were mistakes, that I don't think I'm quite making that mistake as often. The first one is that I've learned that tools don't really matter all that much. I used to be obsessed about, "What is the best tool for doing _____?" "What is the best way to take notes?" "What is the best thing to use for planning my day?" "What's the perfect workout, or diet, or what's the perfect sleep environment?" And realizing that all of these things don't really matter. I'm much more tool-agnostic, and I think a lot of this is just productivity masquerading as entertainment.
So, a lot of these debates around, "Hey, how do I have the perfect _____ or what is the right _____" are just total wastes of time, and what really matters is, one, consistency, having something that you can stick to on a day-to-day basis, especially when things are crazy chaotic busy, and the second is to continually double down on what works and strip away what you're not getting value from.
So, there's a lot to unpack there, but it's like this iterative approach that's the most important thing, because, again, we're solving for a lifetime of compounding. So what perfection creates is maintenance costs as well as burnout. Like, we're likely to fall off. So if we keep things simple and we keep having small, iterative improvements on the things that are working, we will eventually come across something that works well for us. So I'm not trying to take something that someone else is doing off the shelf, but more thinking about, "Hey, what's working for me? What's one small tweak that I can make for things to work, maybe even better?"
And that's not to say that tracking is not important. I think tracking is underrated, if anything, because how do you know if what you're doing is working if you're not tracking it? Even just tracking things like completion eliminates the need to negotiate against yourself, because you have objective data, you're either doing it or you're not doing it.
So, yes. Definitely track what is working, but don't obsess about the perfect way of tracking. There's a subtlety there.
Another thing that I used to believe was true is that a lot of productivity and performance was driven by discipline and willpower, and I had this fantasy of becoming this person who was just incredibly disciplined and could always follow through. You know, this is like the samurai ethos or seeing all of those people who are on magazine covers and just managing to make it look effortless. But I realized again that this was all just a fantasy, and that willpower is not something that you can necessarily rely upon. Yes, you can become more disciplined, you can become someone who is able to follow through more often with the things that you want to do, but I think that process is less of an "effortful" and more of an "intentionful." That you are paying attention to what works for you, what are these conditions that allow you to show up, and then I think acting at that meta-level. How can you have these conditions occur more often?
If we're looking at it the other way, and it's just raising the floor. That when we inevitably fall off or have a bad day, that we're able to recover faster, that we don't fall as far. So my thinking has really shifted there.
Another way of approaching this is I'm less worried about who am I on my best day and more how am I on an average day, and how can I be at my best more often? Everyone thinks about trying to get to a ten, but they're not at that ten very often, and what really matters over the very long run is what is the average on all of your days? I'd rather be an eight every day than a ten followed by a two.
I hinted at one of these in terms of mistakes: that I just consumed way too much information. There were a few years there that I was tracking every book and article that I was reading, and I thought, "Man, I'm reading a hundred books a year, I'm reading two thousand articles a year, I am just gonna know everything and I'm just gonna ride off into the sunset again." And I think that a lot of this was totally wasted, because again it was just an accumulation of things that I don't actually use, that I wasn't able to retain. So my days right now look a lot more of rereading things that I found very useful or resurfacing notes that I had in the past, this belief that the best thing for me to read is something I've already read, like, kind of let that sink in for a second, that you are a different person from the first time you encounter this idea, and perhaps it's something that will, you know, be very useful for you today. A little bit more exploit rather than explore.
And days that are a little bit quieter, so more reflection, more long walks, more just sitting in silent contemplation. I find that we just fill our heads with noise and distraction. I couldn't go anywhere without needing to play a podcast at 2x speed, and I really almost feel bad for myself. I think that there was this over-compensation of feeling like I wasn't enough, and that I needed to accumulate all of these facts and be on top of what's happening in the world right now, and so much of that is noise. And I really think that a lot of what we do in terms of consumption is wasted.
A good question that I ask myself is, "If this is going to be relevant in one year, great. If it's not going to be relevant in one year, it's not relevant now." So, creating more space for thinking about the things that I'm learning, applying them, rather than just shoving more things into my skull.
The final thing that I used to believe was true is that I could just create this perfect schedule that I could follow every day. I had this fantasy of, "Okay, from 8:00 to 9:00 I'm gonna do this, and from 9:00 to 9:15 I'm gonna do this, and from 9:15 to 9:30—” And that this impulse to just control my environment by controlling my schedule had a lot of, you know, the reverse or reactionary effects. Particularly anything that involves other people resists scheduling. So now I focus on scheduling the first two hours of my day and the last two hours of my day, and I leave a lot of space for creativity in the middle, of being aware of these emergent priorities and needing to act on them, particularly creating space to prioritize other people and being there for them, being present. It's really hard to be present with someone when you're constantly looking at your watch and saying, "Hey, I have ten minutes before my next meeting."
So it was something that was a really hard thing for me to learn, that I can't just create, like, perfect time segments in my day and have everything else fall into line. That I actually needed to be a little bit more flexible. But what I can control is generally how I start and how I end my day.
So this is a good transition into question seven:
"How do you recommend starting your day?"
You know, first I'll talk about the principles, and then I'll talk about the things that I do. So, key principles. One, you win the first hour, you win the day. Enough said. Second, if you start the day perfectly, it has the possibility of ending perfectly. So treat the day as important, and important things will happen. The third is that there's a compounding effect of the results of your actions. That you start your habits early in the day, and you can harvest the benefits throughout the day. If you do the things that allow you to be focused and present, you'll be more focused and present throughout the day. If you generate energy throughout the day, you'll be able to carry that energy through. On the other side, entropy accumulates throughout the day, which is just a way of saying that the day gets more complicated as it goes. So if you have a really important habit or if you have a really important thing that you want to finish today, it's going to be easier to do it earlier and harder as the day goes on, 'cause you'll have more things competing for your time, energy, and attention.
So, I like to talk about "Monk Mode," which is—When you think about how to start your day, imagine how a monk starts their day. Well, a monk certainly isn't hopping on Instagram or email to start the day. A monk starts rather than going out into the world, by going into the world. The proverbial, "I'm going to sit and reflect, think about what's important, and put my place mentally and physically in a place to have a great day." I just saw this statistic the other day that ninety-four percent of people check their phone within the first two hours. That actually, over fifty-percent of people checked their phone within the first ten minutes of being awake. So, if you can go the first two hours being stimuli-free, of not letting all of the noise of the external world in, you're already ahead of ninety-four percent of people. That's a great way to distance yourself. And it's something that I've found very commonly, is that the amount that we get done is reverse-portioned to how early we check our email.
So, someone comes to me to say, "How can I get more done," I say, "Check your email later." Personally, I don't check my email until noon. Sometimes people can't go that long, but experiment with that. Try it. See how long you can go.
There are four commonalities of a morning routine that I find really work well. The first is movement. So, this is just a "motion creates a motion" type of thing. Get your body moving, do some exercise, do some stretching, start to build some energy. And really getting outside. A real key part that people don't realize about, you know, maintaining a positive effect, particularly in the winter, but also maintaining a consistent sleep schedule, is getting some sunshine in your face to start the day. So you start to move and build momentum, that what's happening in your body starts to cross over into what's happening in your mind.
The second component is some form of reflection. For me, this is morning page journaling. Free writing, just getting all of the stuff out of my head and onto the page to maximize the mental bandwidth I have for new ideas. This could take the form of gratitude, creating, you know, a positive feeling, looking for the positive, but just some form of reflecting on what's going on, taking the time to process what is happening.
The third category, I would say, is focus or presence. For me, this is silent meditation every morning. Other people find it really powerful to have some form of affirmation or to review their goals or to look at a vision board. Something that allows you to be more present. And I think of this as, like, quiet. Trying to have this moment of being still. And that you'll have the ability to carry this throughout your day. So, you know, what can you do to have this carry-over of focus and presence to everything that you do for the rest of your day?
And the fourth and final category, I would say, is ideas. So this could be reading, this could be listening, but in general, I find this is going back to something that you have already encountered before. Again, that the best idea for you is the one that you've already had. So for me, this means reading one chapter in one of my favorite books. I prefer something hardcover or paperback in the morning. This could be going back to some of my old ideas, things that I've highlighted from what I've read, but just kinda planting some seeds and looking for opportunities to apply these ideas throughout the day.
And then after this first hour of my morning is my first hour of work, however you define that. And I call this a "power hour," which is that my first hour every day is spent on my top priority. So just create the conditions for that to succeed. I review my plan, think about it, visualize, "How is this hour going to go? What do I want to complete by the end of this hour, and then what can I do to make my environment supportive of this, to make sure I make the most of this time?" And you will find that, hey, if you start your day in this way, one hour of doing the things that allow your best self to show up, and one hour of working on your top priority, everything else the rest of the day is a total bonus. That alone will allow you to start to make so much more progress on everything that you're doing, because again, that first hour working on your first priority is gonna be more important than everything else you work on the rest of the day combined, so treat it that way.
So, yeah. I come back to the way that I started, is that if you start your day perfectly, you create the opportunity for it to end perfectly. So treat your days as important. Start to build momentum right away.
Question number eight:
“What have you learned about investing?”
And we talked about humility before. I think humility is the biggest thing that I've tried to learn about investing, is that it can be really, really tough. So, understand where you are playing, who you are competing against, and assume that most of your results are noise. Everyone sees when they're doing well, they assume that that's some sort of skill that they have, or when things aren't going well, that, "Hey, that's just the market, that's poor luck." And usually, it's a huge, huge, huge amount of noise. So the only way that you can decouple your skill from your luck is to externalize your thought process. So any time you make an investment, having an objective record, literally writing down, "Why am I making this investment? If this investment goes really well, here's why. If this investment goes poorly, here are some reasons why. How do I think it's going to be in this time period?" And when you externalize your thought process, you can go back later after you've had some time, collected some data, you can see how things are going, and you see, "Hey, what did I miss? What did I think was really important here that wasn't all that important? What did I think wasn't important that ended up being really important?"
And the thing you're trying to solve for is improving your thought process—how you approach your investing. And without that objective record, you're constantly going to be playing the hindsight bias of, "Oh, I knew that was going to happen." Okay. Why didn't you act upon it? Why didn't you bet more? Why didn't you bet larger? Right? Thinking about bet sizing as a really underrated part of investing, I think that's something that I've really learned. I used to size all of my bets the same, rather than sizing them proportional to my edge, to my conviction. And I think that's a really key one as well, is knowing where your edge is. There are so many different places to play within investing. So, thinking about where do you have an informational advantage? Where do you have an access advantage in terms of having better deal-flow? And most things for you personally are uninvestable, meaning that you don't have an edge here. That is true of the vast majority of places you might think about investing, so be humble. Like, be very clear on where your edge is and size accordingly. If you don't think you have an edge, you're probably best just taking the one beta of you know, lifetime compounding.
In general, a rebalanced portfolio of stocks is going to do very well. As you start to become more active, thinking about anti-correlated bets. Bets that when one goes up, the other ones don't necessarily go up, or when one goes down the other ones don't necessarily go down. That way it starts to even out your volatility over time, allowing you to stay invested when things aren't going well. You can be a little bit anti-cyclical. But where a lot of people get into trouble is that they tend to invest more when they're feeling liquid and prices are high, and when prices are low they don't have cash on hand and they're needing to sell at the low point. So this is allowing you to buy more when things are cheap and to sell when things are expensive, and it just comes down to rebalancing, that you have desired allocations of where you want to be, and as you start doing really well in one area, you sell some of that to buy something that's not doing well, assuming on average that things are going to progress to the mean.
And man, something that I really appreciate, especially as we go through cycles, is that you know, liquidity really plays a large role. If we can have things that are doing extremely well, but only on paper, and thus we can't redeploy that income. So I think a lot more about portfolio turnover and cash flow, is, "When am I going to be able to get my money back so I can redeploy it?" And having a much higher illiquidity premium than I'm used to, that I place more value on having access to my money and being able to place it in the spots that I think have the highest return based on current conditions, which are continually shifting.
A lot of investing is trade-offs amongst eating well and sleeping well and knowing where you stand on that. If you want to be completely passive and hands-off and, you know, generally just sleeping better, you're gonna have to accept a lower return. You just aren't going to be able to compete well against people who are in there eating, sleeping, breathing this stuff.
And on the other side, if you want higher returns, it's gonna require being more active. Generally what comes with that is more stress, more noise, more anxiety, and knowing to that extent how much you're willing to pay that price. You know, what is the area that you are willing to obsess about that you actually have an edge, and what are the places you're going to ignore and just take the baseline return?
So, those are a few things that I've learned about investing.
Question nine:
"Why did you retire from poker?"
This is a—I would say everything comes down to a combination of personal and practical reasons, and for me, that's certainly true. The first time that I retired from poker was after the event we call "Black Friday." That was in 2011, when poker got shut down in the U.S. I've talked about this in some of the lessons and a few different podcasts, if you wanna check that out, but in essence, I woke up and I wasn't sure about what the future of my profession was. You know, about seventy percent of the poker market was in the U.S., and U.S. players were no longer able to play. About half of my net worth was seized. And I kind of took this as a sign for, "Hey, maybe this is time to start doing something else." My life had completely revolved around poker at this time. I say, you know, all my dreams were poker dreams, all my friends were poker friends, and I saw this as an opportunity to explore some other interests for a while, to travel the world for fun rather than for poker tournaments. And to start doing things that I saw having you know, a greater impact on the world.
I started getting involved in entrepreneurial activities and supporting founders and really being more there for my network of friends. I think that it allowed me to take a step back and say, "What are the areas of my life that I've been under-invested in, and where do I want to have a little bit more sense of balance?" And I actually went five years, until the year 2016, of not playing a single hand of poker. And that allowed me to be a lot more intentional about, "Hey, what do I need to see in order to get back into this thing that I find so—I'm so passionate about, I get so much value from?" And I had a lot of my identity tied to it, at least until retiring and being able to diversify. The sources of my identity allowed me to say, "Hey, 2016, I think I'm able to come at this from a healthier place."
And there was a real big, you know, thinking practically, there was a real big opportunity, and I saw within the U.S. where it had been impossible to play within the U.S. and it had become possible again, and people hadn't caught onto that, so I was able to start playing again in 2016 and being just as successful as I was you know, five years ago at my career peak, but not having played for five years and not putting all of myself into it. The risk/reward equation was just much more aligned, and I played a lot of poker again for the next five years. It wasn't quite eighty hours a week, it usually was like twenty or thirty hours a week. And around 2021 I started to see clearly that I was hitting diminishing returns. My hourly rate was declining, there were a lot more really good players who I was competing against, and it was clear they were putting a lot more time into the game than I was. So I was going to need to commit increasing amounts of study and work on my game just to maintain my level standing within the poker world.
At the same time, the upside was declining. The average stake of the game that I was able to play was getting lower and lower, and the average number of games I had to choose from was less and less. And so I saw a little bit of a negative spiral, in that it was becoming more competitive and there were less new recreational players playing.
At the same time, I just wasn't enjoying poker to the extent that I once was. So I decided to retire again, take a step back. I started playing a little bit in person for fun, particularly in Austin. I had a lot of fun with the stream game environment where you play in a studio and they broadcast it with a thirty-minute delay so you could watch it back, have some fun with everyone who knows what you had. And there's just a really good community of players. I actually enjoyed the camaraderie of the people I was playing with at the table, so I was able to approach things a little bit more, you know, recreationally. I was still pretty successful and doing well, but it wasn't a full-time obsession.
I found that I was getting a little bit too successful for a while. I started Forcing Function in 2016, and I found that I was continually using poker as a way to procrastinate on my mission. That, you know, for lack of a better way of putting it, the money was just too damn good. Like, how do you justify sitting down and writing or doing lots of things that didn't have any immediate financial return when you're able to make hundreds of dollars an hour playing a game? There's just—it was just I was always able to justify playing poker, and I found that this ease of making money and doing something that came very naturally to me was a really good excuse to postpone pursuing my dream, I think what I see as my purpose of being here, which is teaching others how to win at their games, to realize their full potential, to perform at their peak. So I needed to pull the plug and to remove poker as an option, particularly as something that I would do during the day, so that I would have the opportunity to give my best to Forcing Function and have the opportunity to actually fail at it rather than the excuse of, "Oh, if I actually put all I had into it." Well, that excuse was removed, and I've been putting all I have into it now, and very happy that I have been doing so.
So, yeah. I still love poker, I still play on occasion, it's still one of the places that I draw from the most for how to do things, how to perform, how to show up in the world, but I no longer have it as a sole source of income or identity, and I think I'm much better for it.
Final question, number ten.
“How do I become a better games player?”
Yeah, this is fun. I'd love to share some principles that I think expand beyond poker to becoming better at all games, and I think it's important to note that I'm not talking about just you know, board games or sports or card games, that I think many things that we do in life have game mechanics, and that if we approach them like a game, if we gamify them, we will not only have better results, but we will also be aware, "Hey, what are the rules we are subjecting ourselves to without realizing it?" So yeah, I'll come back to that question later. Game theory is something that I've been really passionate about of late. But thinking about how do I become a better player of games in general?
First, just assume most of the ways you are playing are wrong. Again, knowing is the enemy of learning, and I see anyone who plateaus at a game, they are very, very good at justifying why what they're doing is correct. So always any time you do something, and say, "Hey, what if the opposite was right? Can I make some arguments for doing that?" And imagine, hey, what if the way of doing things that was correct in this spot is the exact opposite of what I'm doing? Well, that at least opens you up to alternatives, in that there's so many ways to play. A lot of games are very situational, so the more tools that you have in your belt, the more approaches you feel comfortable with, the more you're able to adjust to these changing conditions.
When I did a lot of coaching of really, really good poker players, but poker players who I thought you know, weren't realizing their full potential, the annoying question I would ask is, "Why?" So, any time you're doing something, ask, "Why am I doing what I am doing?" The important part is to improve your thought process. And a lot of things can be correct or incorrect. You don't really know unless you know what you're trying to accomplish. So when you're playing a game, thinking about, "What is my goal here? What is the best thing I can do to accomplish that goal?" And if you do any sort of study, which is probably the fast track to improvement—Say you're reading a book about the game or you're watching a training video about that game, rather than taking a lean-back, passive approach, any time there's a decision point, pause. Say, "Okay, what would I do here? Why would I do that?" And then unpause, and see what they do, and see what they recommend.
This is a way of excavating your invalidated assumptions. Of seeing, "Hey, how is my approach different from someone else's approach?" And if you're watching an expert video, for example, assume they know what they're doing, and say, "Well, lemme understand why they're doing what they're doing. At least I can acquire some nuance to my own approach." But the way a lot of people go about it is passively, and they're watching, say, "Oh, yeah, that makes sense. Yeah, I would do that." And they're completely giving up all of these learning opportunities.
At the same time, when you are playing when you are in a game situation, treat your opponents as smart. Don't think, "Oh, that's so dumb, what they're doing." Don't be in this judgmental framework. Like, try to understand their thought process. Even if you don't think what they're doing is rational, there is rationale to what they're doing. That a lot of being a great games player is actually cultivating this sense of empathy. You can understand what your opponents are trying to accomplish. You can often thwart those plans by anticipating them. But if you assume they're just making mistakes and blunders, then you're going to just be kinda stuck in your own head and be like tunnel vision on what you're trying to do, rather than, "How can I accomplish my goals while making their goals harder to achieve?" Adding friction. This is where that relative advantage comes from.
As has been a common theme throughout this AMA, I think improvement in anything, games included, comes down to tightening your feedback loops. So this means any time that you play a game, set aside at least a few minutes afterwards for a post-mortem. If you were unsure what the right play was, go back and see, "Hey, if I had done the opposite thing, how would this have gone differently?" So that there's something to be learned from every mistake that you make. And this is how you stop repeating the same mistakes. Go back through your games and try to learn from them and think, "Hey, when I'm in this situation, what am I going to do differently next time?" Remember, you're thinking through things at the policy level. Like, "How do I wanna make this decision all the time, each time it will happen?" Rather than having only this singular instance.
When you're actually playing, I find it really helpful to zoom in. So, each game has a particular focus. So let's say I was playing in poker, I would think about, "All right, I'm really gonna focus on how to play in position when I'm reraised." Or if I'm playing live, I'm gonna really focus on their hands. Let's see what I can pick up on their hands. Or maybe their posture. But having a really particular focus. And this allows you to be more present by zooming in and having a direct learning outcome that you're optimizing for. So pick one aspect of your game and really try to deliberately practice it every time.
Within your game, there's always gonna be a meta-game. Mechanics that are under-appreciated or unacknowledged. They're not discretely in the rules, but ways that you can accumulate advantage. So thinking about, "Hey, what are the things that people are under-appreciating?" I'll give an example. I like to play Settlers of Catan, and Settlers of Catan there's the ability to block your opponents where they can't collect resources. And so a really unappreciated part of the meta-game is how can you divert attention to other players so that other players are blocked instead of you, so you can continue to develop? And a lot of this is like a social dynamic, and being aware of this, playing politics. But it's not actually in the rule book, it's something that you need to develop this intuitive sense for. And all games have this meta-game, these second-order aspects of the game that are underappreciated, can be large sources of advantage.
And a real way to uncover this meta-game, to continue to develop, is just play against tougher competition, and ask lots of questions. Again, assume that they know something that you don't. If any time you're in a room and you feel like you're the best in the room, you're in the wrong room. Like, we should be feeling dumb, like, thinking about, "Hey, there's so many things I can learn. I don't understand what's going on, but I can start to understand." That's just how we get better, is by continuing to play against tough competition. So I think of this as game selection. "Hey, I'd like to win by choosing the games that I feel like I can win in, that I'm aligned with." There's this founder-market alignment. But also, I'm continually finding ways to expose myself to competing against people who are better at me, at least in one dimension or one area, and this allows me to continue to sharpen myself.
So, ask questions. Zoom in. Think about how you can improve. And for whatever you're doing, try to think about your thought process and how you can improve your process over time.
Those are all ten questions for today. I have so much fun doing these AMAs. Thank you guys for asking these questions.
If this is something that you'd like to see more of, it's been two years since the last time I've done this. Can you believe that? If you wanna see more of this, please let me know. I have a lot of fun, and I'd love to do it again.
If you have any questions, my door is always open. You can reach me by email. That's hello@forcingfunction.com. I'm the founder of Forcing Function. We work with twelve founders and executives at a time to improve your performance. If that's of interest, check out forcingfunction.com. You can also reach out to me on Twitter. My handle is @SparksRemarks. Thanks for tuning in today. I'll see you guys next time.