Tag: Decisions

Premeditation of Evils: The Stoic’s Way of Expecting the Unexpected

The Stoic school of philosophy contains the phrase Premeditatio Malorum, literally translating to premeditation of evils. What this means is that the Stoics took time to imagine things that could go wrong in life and things taken away from us. They wanted to be as prepared as possible for things that could be unexpected so that they could behave with virtue when the time came.

In the modern day this still applies. Do you know what you would do if you suddenly lost your job? Or if your partner wanted to break up? Or if one of your loved ones received a terminal diagnosis? What if you became permanently disabled, or lost your speech, sight or hearing? What if you got sued for all of your money?

As painful as those scenarios are to imagine, the Stoics viewed this exercise as important. They believed that unlucky events fell heaviest on those who least expected them, those who were least prepared. In understanding the possibility for ill fortune, they experienced more gratitude for times of good fortune but also a readiness in the event that things changed.

The premeditation of evils can extend a little further too, for events that aren’t considered disastrous but could still be unexpected. If you are in a relationship, do you know what you would do if an attractive work colleague started seducing you? Do you know what you would do if you or your partner became pregnant? If you are single, do you know what you would do if the subject of your admiration started showing real interest? Do you know what you would do if the amount in your bank account suddenly contained a few extra zeroes in error? Do you know what you’d do if your best friend asked you to be their alibi in a criminal case?

Imagining these kind of scenarios gives us a chance to respond to these situations in line with our values, instead of being panicked or feeling reactive if and when these relatively unexpected, yet impactful events occur.

The Three Biggest Decisions of Your Life

Entrepreneur and angel investor Naval Ravikant advises that young people should be spending more time making the big decisions: where you live, who you’re with, and what you do.

These three things will pretty much determine the quality and trajectory of our lives. Sometimes we find ourselves going with the flow, entering relationships that we aren’t 100% sure of, spending a lot of time doing a job but spending so little time deciding which job would be best for us. And usually the place we decide to live in will determine who we meet and which jobs are mostly available too.

Once we decide these three things we can be much more intentional with our lives instead of being taken whichever way the wind is blowing.

Skin in the Game: The Fundamental Question To Ask Yourself Before You Take Advice

The world seems to always give us advice. Friends tell us which Netflix shows to watch, families tell us what job to take, self-help books tell us how to spend our mornings. We get given so much advice that we have to somehow figure out which advice is worth taking.

The main question to ask yourself is: “Does the person advising me have skin in the game?” That is, what kind of losses are exposed to the advisor if this goes wrong? If your friend is telling you to buy bitcoin, you should find out how much money they would lose if bitcoin lost its value – if the answer is zero, you should run in the other direction.

This is precisely what happened on Wall Street, where fund managers got bonuses for wins but paid no penalty if they lost. In turn, they ended up taking high risks with other people’s money, knowing that they had no skin in the game and that taxpayers could rescue any bad decisions.

In contrast, Warren Buffett owns about 16% of the multi-billion dollar fund he manages, so if the fund loses, he loses in a big way.

Nassim Nicholas Taleb, the author of Skin in the Game, suggests we should take note of people who stick up for a truth that makes them unpopular, or people who act in a way that risks ostracism. He writes simply, “Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.”

Want to know another stance on advice-taking? Click here.

How to Fail and Still Win Big

Like anyone else before starting a commission-only job in sales, I questioned whether it was the right decision to try it. I’d had a few months experience of a lead generation job, but I’d never made a sale in anything in my whole working career to date.

So I played through a few outcomes in my head. What if I didn’t do very well? What if I made no sales? What if I came out with less earnings than if I just stayed in my current job working at the front desk of a hotel?

I came to the conclusion that it was reasonable that I would find the job very difficult, and there was a chance that some of those outcomes could indeed come true.

But even if I did “fail”, and earn less than what I would have had I stayed in my job at the time, in what areas would I still win? I would probably at least make a few friends, I would have travelled to new parts of the country, I would have learned at least a few transferable skills, and I would surely have practiced overcoming objection. Even if I made the slightly less money than before but still achieved the other things, I would still have counted that as a big win. At the very worst, I would potentially learn to never do a sales job again.

In the end, I did find it even harder than I thought it would be. There were whole workweeks where I didn’t get paid a single cent for my time and effort. At one point in the year, I went 20 working days without making a single sale – not a single commission. But overall, I had some better periods and I ended up making about 1.5x what I would have if I stayed in my hotel job.

What’s even better, as is the nature of commission-sales, I ended up getting better and better over time, meaning in my second year doing the job I ended up earning just over double of what I would have in the hotel. In my third year, I ended up earning about 5x what I would have in the hotel – I doubt the hotel would have given me a 4% increase in my pay within that time, let alone 400%!

The idea of putting yourself out there to potentially “fail” in order to still win big is sort of related to Robert Kiyosaki’s rule of “working to learn, not to earn”, but also can be applied outside of decisions at work too. Failing to hit a 45 minute goal for a 10 km run still means that you completed the race faster than the average runner, and you still get to reap the rewards of the fitness built up through weeks or months of training. Failing in a relationship, but coming out of it learning more about who you are or what kind of partner would suit you the best is still winning big in the long-term.

Which life situations have you flirted with failure and still won big?