Why Your Feelings Are Killing Your Finances... Ep 123

Summary Notes


In this episode, the speaker highlights how emotional detachment is crucial for making sound business decisions. CEOs like Elon Musk and Warren Buffett exemplify this with their computer-like demeanor, which allows them to make logical choices unaffected by emotions. The speaker, reflecting on their own experiences, emphasizes the importance of neutrality, particularly when faced with emotionally charged decisions such as hiring or firing. They suggest using mathematical approaches to overcome emotional biases, ensuring decisions are based on data rather than feelings. The speaker also touches on the necessity of enduring short-term discomfort for long-term gain and the value of mastering basic, consistent actions over seeking novelty in entrepreneurship. The episode concludes with a call to action for listeners to share the podcast, highlighting the organic growth through word-of-mouth endorsements.

Summary Notes

Emotional Influence on Financial Decisions

  • Business decisions should be based on mathematical calculations within the context of human psychology.
  • Top CEOs like Elon Musk, Mark Zuckerberg, and Warren Buffett often communicate in a way that seems devoid of human emotion.
  • Some CEOs may naturally have less emotional affect, which helps them make more rational business decisions.
  • High-level decision-makers often make better business choices by detaching emotions from their decision-making process.
  • Emotions can hinder business owners when it comes to making critical decisions regarding hiring, firing, and other business operations.
  • The ability to remain non-reactive and neutral is crucial for business progression and consistency in leadership.

"Business is simply mathematical decisions made within the context of human psychology, which essentially means that you need to do arithmetic and division and algebra in order to make business decisions and then overlay that on the people that they're going to affect."

This quote emphasizes that business decisions are fundamentally about numbers and logic, but must also consider the human element.

"They sound like computers, like Bill Gates, they sound like robots. They sound devoid of any human emotion."

The speaker is highlighting the observation that successful CEOs often communicate in a manner that seems emotionless, which may contribute to their effective decision-making.

"The reason that they're able to achieve that is because they're able to make decisions devoid of human emotion."

This quote suggests that the ability to separate emotions from business decisions is a key factor in reaching high levels of success.

"There are a lot of decisions right now that you may or may not be making because you have emotional charge around them."

The speaker points out that emotions can interfere with the decision-making process, often leading to avoidance of necessary actions.

"I've become less and less reactive as we have gone higher and higher up in business, because you have to be."

Here, the speaker shares personal experience, indicating that becoming less emotionally reactive is essential for climbing the business ladder.

"You basically, in some ways, have to become like a robot and be able to show up neutral in all situations."

The speaker suggests that to succeed at the highest levels in business, one must be able to approach situations with neutrality, akin to a robot, to make logical decisions consistently.

Balancing Emotional Intelligence with Business Acumen

  • Effective sales, marketing, and positioning require soft skills, which are rooted in understanding human psychology and emotions.
  • Even though soft skills are necessary for certain aspects of business, they should not cloud judgment in areas like business model monetization and personnel decisions.
  • The speaker acknowledges the importance of emotional intelligence but maintains that it should not dominate the decision-making process.

"Within the context of human psychology, the second part of that sentence, a lot of times comes into play when you're talking about sales and marketing and positioning, because all of that is soft skills."

This quote recognizes that human psychology and emotional understanding are crucial in areas of business that involve interaction with people, such as sales and marketing.

The Reality of Business Outcomes

  • Business leaders must manage their expectations, as outcomes are often neither as good nor as bad as anticipated.
  • Maintaining a balanced perspective is important to avoid extreme emotional swings that can disrupt business operations and team morale.

"Because the reality is that usually it's in the middle, though, nothing. And this is just like one of the, I was going to make this thing for my birthday and then decided not to. But one of the lessons that I've learned has been that nothing is ever as good as you think it's going to be."

The speaker reflects on the reality that business outcomes typically fall somewhere in the middle of expectations, neither extremely good nor bad, and emphasizes the importance of keeping a balanced viewpoint.

Expectation vs. Reality

  • Perception of future events often does not align with outcomes.
  • Unexpected events can have greater impact, both positively and negatively.
  • Preconceived notions about the future can impair present-day functioning.

"The only things that will be worse than you ever imagined are things that you didn't expect to come, anything, that nothing is going to be better than you imagined, except for things that you didn't expect to have happen."

This quote emphasizes that often the most impactful events are those that are unforeseen, suggesting that our expectations can limit our understanding of future possibilities.

Importance of Adaptability in Business

  • Flexibility in business models can lead to success.
  • The speaker's personal experience with Gym Launch illustrates the benefits of adaptability.
  • Changing from a 'done for you' to a 'done with you' model was a pivotal decision.

"I did not expect gym launch to take off the way that it did because the original model that we had was not the model that we switched to."

The speaker reflects on the unexpected success following a significant change in their business approach, highlighting the importance of being adaptable in business strategies.

Emotional Stability in Leadership

  • Consistency and neutrality are key traits for effective leadership.
  • Emotional extremes can be perceived as instability.
  • Leaders benefit from showing up with a consistent demeanor.

"And a lot of times, whether it's good or bad, how you show up to the team in a positive way or a negative way, like, if you're somebody who's, like, really cold or really hot, if you're like, I always want to be positive, that also is not good because it just shows that you're not stable."

This quote discusses the importance of emotional stability in leadership and how extremes can undermine a leader's effectiveness.

The Dichotomy of Entrepreneurship

  • Entrepreneurs often start with high emotion and passion.
  • Successful entrepreneurship requires a shift to a more emotionless, data-driven approach.
  • The transition from emotional to logical decision-making is counterintuitive but necessary.

"And then the moment you start it, you have to be the opposite of who you are in order to succeed."

The speaker comments on the paradoxical nature of entrepreneurship, where the initial emotional drive to start a business must be balanced with a more rational, emotionless approach to sustain it.

Decision-Making Frameworks

  • Decisions should be based on logic and data, not feelings.
  • Using mathematical and data-driven approaches can help in making more objective decisions.
  • The speaker uses cost analysis as an example of applying data to decision-making.

"And the best way, at least in my experience, is to always break it down to math, right? Is to break it down to math and put as many decisions as I can through data and actually extrapolate out what this decision means data wise."

Here, the speaker advocates for a methodical, quantitative approach to decision-making, suggesting that reducing decisions to data and math can help remove emotional bias.

Cost Analysis in Decision-Making

  • Understanding the full cost implications of business decisions is crucial.
  • Cost analysis includes both 'hard' monetary costs and 'soft' costs related to performance and opportunity.
  • Leaders must consider the financial impact of keeping an unsuitable employee in a position.

"And then I start breaking down, okay, well, I have the cost that I'm actually paying, and that's the hard cost, right? And then I have the soft cost of the job that they're actually not doing."

The speaker outlines the process of evaluating the direct and indirect costs associated with an employee who is not performing well, demonstrating the comprehensive approach to cost analysis in business decisions.

Cost of Ineffective Team Members

  • Ineffective team members result in direct financial loss and decreased overall team effectiveness.
  • Leadership roles amplify the negative impact due to their influence on the team.
  • Quantifying these issues in numerical terms can help leaders make tough decisions.

So it's like there's money that's going out for them, right? And then there's the value that they're not added, which is actually a double burn.

This quote highlights the dual financial impact of ineffective team members, through both the cost of their salary and the lost potential value they fail to add.

And then if there's someone who's in leadership, then it's all of the downstream effects of the decreased effectiveness of the entire team, and then you have the hard costs for those members.

The speaker emphasizes the magnified negative impact when an ineffective team member is in a leadership position, affecting the whole team's performance and incurring additional costs.

Growth Through Word of Mouth

  • The podcast relies solely on word of mouth for growth, eschewing ads, sponsorships, and sales.
  • The host encourages listeners to share the podcast as a form of support and to generate good karma for entrepreneurs.

The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything.

This quote explains the podcast's growth strategy, which is entirely dependent on listeners sharing it with others.

My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast, that you do the exact same thing.

The speaker requests listeners to promote the podcast in the same way they discovered it, emphasizing the importance of community support for its success.

The Entrepreneurial Journey and Emotional Resilience

  • Successful entrepreneurs often exhibit deliberate communication and thick skin as a result of overcoming challenges.
  • Emotional resilience is necessary to face accusations and lawsuits, as seen in high-profile cases like Elon Musk's.
  • Entrepreneurs must manage their emotional reactions to make clear-headed decisions.

And so your skin gets thicker. And a lot of times, if you look at some of these interviews like I was referencing, if you watch these CEOs, these super high level entrepreneurs, they're very deliberate with how they speak and what they say because they've done it so many times, it becomes second nature.

This quote suggests that repeated exposure to business challenges leads to the development of a thick skin and deliberate communication, which are hallmarks of experienced entrepreneurs.

Elon Musk was on a podcast the other day, and he's like, he has like 25 lawsuits ongoing at any time.

The speaker uses Elon Musk as an example of a high-profile entrepreneur who faces constant legal challenges, illustrating the need for emotional resilience in business.

And so it does require this sort of deadening of your emotional reactions.

The quote emphasizes the necessity of controlling emotional reactions to navigate the difficulties of entrepreneurship effectively.

Decision-Making in Business

  • Emotional charges can hinder decision-making in business.
  • Decisions should be based on logical analysis rather than emotions.
  • Making tough choices is essential, even if they are unpopular, to prevent the market from making those choices for you.

And so my urging to you is, right now, there probably are some decisions that you are not making because they're emotionally charged.

The speaker suggests that emotional involvement may be preventing listeners from making important business decisions.

And what you need to do is look at it within the context of math and say, does this make sense?

This quote advises listeners to approach decision-making from an analytical standpoint, using math as a basis for clarity.

And you have to make the hard choice. And a lot of times, the hard choice is not the popular one.

The speaker stresses the importance of making difficult decisions, acknowledging that they may not always be well-received but are necessary for the success of the business.

Sacrificing Short-Term Comfort for Long-Term Benefit

  • Life often requires sacrificing immediate pleasures or comforts to gain long-term advantages.
  • This concept is applicable to various aspects of life, including fitness, sleep, and business decisions.
  • Making sacrifices can be challenging, but it is essential for success.

"Life a lot of times is sacrificing your short term comfort for your long term benefit."

This quote emphasizes the importance of forgoing short-term gratification in favor of achieving greater rewards in the future. It's a principle that applies broadly across different life scenarios.

Dealing with Unproductive Relationships

  • Letting go of people who are unlikely to change is necessary, even though it might be a difficult decision.
  • This principle applies to personal relationships as well as professional ones, such as with clients who drain your attention.

"I want to keep this person on because maybe they'll turn around, but they probably won't. You already know that if you had to bet on it, you probably wouldn't bet on it, right?"

The quote suggests that holding onto relationships with little potential for improvement is a common mistake, and it's often better to make the tough choice to move on.

The Importance of Mastering the Basics

  • Success in entrepreneurship, and by extension in many areas, is about consistently doing the basics well, rather than seeking advanced strategies.
  • Mastery comes from repetition and consistency, which can be monotonous but is crucial for success.
  • Entrepreneurs often seek excitement, but business success requires consistency and doing things that may not come naturally.

"The advanced people don't do anything advanced. They just never don't do the basics."

This quote underlines that those who are successful do not necessarily engage in complex strategies; instead, they consistently execute the basic, foundational tasks effectively.

Decision-Making Strategies

  • When faced with decisions, removing emotion and looking at the pure numbers can clarify the best course of action.
  • Imagining what a significantly smarter version of oneself or the smartest person would do can lead to higher quality decisions.

"Take the math out, look at it from pure numbers, and make the decision as though it were someone else's company."

The quote suggests an objective approach to decision-making, focusing on data and numbers to guide choices rather than personal attachment or subjective feelings.

Upcoming Content and Engagement

  • The speaker hints at sharing exciting future content about recent events and experiences, such as the Arnold and a charity event.
  • They express a desire for audience engagement through likes and comments, showing appreciation for their audience's interaction.

"I've got some amazing stuff I'm going to talk about from the Arnold this weekend and from the charity event that we sponsored."

This quote previews upcoming content that the speaker plans to share, indicating that there will be discussions on interesting topics and personal experiences.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon

© 2024 Deciphr

Terms and ConditionsPrivacy Policy