“You Can Do Anything You Put Your Mind To.”

“You Can Do Anything You Put Your Mind To.”

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Note: I’ve worked on this post off and on for more than two months since reading The Brain That Changes Itself in September.

Between the move across country and getting settled down in Tampa there’s been a lot of breaks.   But this concept is so important I knew I had to finish it, even if it took a long time.

I hope you enjoy the final article below and find the concept of neuroplasticity as useful, life changing, and necessary as I have.

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Not often in life do you come across something having the power to change your life for the better.  It’s even less often that you realize it as you’re reading.

For me it takes weeks, months, or sometimes years for lessons to sink in and become something that has the potential to change my life.

But as I read The Brain That Changes Itself in September I knew I was on to something life changing.

The premise of The Brain That Changes Itself is the brain changes every time we do anything.

Anytime we read, listen, watch TV, slug around the house, learn something new, or practice anything.  When we do things neurons in our brains improve the connections with whatever it is we’re doing.

The more you do something the easier it is.  And the more you’ll understand how to improve things.  But the inverse is also true.  The longer we continue bad habits the harder they are to break.

This brings to mind the following quote from Warren Buffett:

If you’ve ever tried to break a bad habit and change it to  a better one you know this process is difficult.  If you want any chance of success you need to put full focus into the new habit you’re trying to form.  Or the old habit will stay in place

For more information on the Power of Habit go to this post.

But before we go further we need to go back…

I came across neuroplasticity some time ago.  I’m not sure when.  But I do remember thinking its potential was great enough to change the world and fortunes of millions of people if they knew about it.

Have you ever heard someone you care about – or maybe even your own inner hater – saying I’m not smart or good enough to do something?  We all have.   And it pains me to hear people say this.

I’ve always thought if people are passionate enough they can change their lives.  Even if they have learning disabilities, they can change if they worked hard enough and spent enough time improving and learning.

Why did I think this?

  • Reason #1:  Because my parents raised me saying “You can do anything you put your mind too.”  How literal this has turned out to be over time.
  • And Reason #2: Because I’m proof it can happen.

My Extreme Dizziness

A couple years after my dizziness started I was at my worst physically.

I could do nothing but lay around watching TV because every time I moved my head even a tiny bit I felt terrible.  Just the act of getting up and going to the fridge for something to eat made me so dizzy and nauseous that I couldn’t do anything the rest of the day.

This lasted for three years or so…

No doctor I went to ever found anything on the dozens of tests run.  And most doctors were dismissive, treating me like I was faking.

At this point I had zero hope of getting better.  I was resigned to feeling terrible all day, every day, for the rest of my life…  And I was only 22 years old.

This didn’t change until my mom found an Occupational Therapist (OT) in Wyoming who gave me Vestibular Rehabilitation Exercises to do.  These helped start retraining my brain to get rid of the dizziness.

Even though the OT flat out told me “You’re never going to be able to do all the things you did before,” this visit gave me hope for the first time in years.  Hope that someday – in spite of her telling me I wouldn’t – that maybe I would get better.

Why?  Because I’m a stubborn and persistent person who doesn’t like to being told they can’t do anything.

This visit and the exercises she gave me were my first introduction to neuroplasticity and the possibility of retraining the brain.

What Is Neuroplasticity?

Below is the definition of this life altering concept from Wikipedia.

Also known as brain plasticity, is an umbrella term that encompasses both synaptic plasticity and non-synaptic plasticity—it refers to changes in neural pathways and synapses due to changes in behavior, environment, neural processes, thinking, and emotions – as well as to changes resulting from bodily injury.

So what does that mean?

Neuroplasticity is concept that the brain changes a little every time we read, write, listen, talk, or feel anything.  The more we repeat things in a dedicated fashion the easier they will become.  And the more we will know and understand what we’re doing.

The Science of Neuroplasticity

The wording in the video is important: “Repeated and Directed Change”.

This doesn’t mean multi tasking…  Reading a book while watching TV.  Or reading and searching the internet on your phone at the same time… Something my generation does a lot.

Repeated and directed change means intense and repeated focus on whatever it is you want to learn or do.  For an extended period of time.

One of the examples in The Brain That Changes Itself talks about how after severe strokes some people lose the ability to talk,  pick things up with one arm, or even move an arm altogether.

To retrain their brains some of these patients went through intense eight to ten hour days of forcible use of these abilities.  Even going so far as practicing picking things up over and over again for eight to ten hours a day three days a week.

Progress was slow but over time patients who went through these brain retraining programs spoke better.  They had better motor skills.  And they could use their affected limbs again better than the others who didn’t do the training.

This happened even after many were told by doctors they would never talk or use their affected limbs again.

But I thought the brain was fixed like a machine and didn’t change?  How is this possible?

The Brain Isn’t A Machine

I’m only 28 and even when I was going through school kids were separated by IQ tests that “proved” how smart someone was going to be their entire life.  Kids with low IQ’s and learning disabilities went to special classes to “help” them.

The curse of low expectations – and the vicious cycle of getting called dumb all the time – led many of these kids to hate school.  Some even dropped out.

The curse of high expectations went the other way too.  Getting called smart all the time led many of the kids with high IQ’s to slack off and rely on their “gifts.  Many didn’t work as hard as the “challenged” kids leading many of the “gifted” kids to not reach their potential.

Kids in the middle of the IQ range weren’t pushed to learn as much as possible.  And were often an afterthought.

Hell, I even get told a version of this on a regular basis by people who email me…

An email I get on a semi regular basis goes something like this.  “Even though I want to learn I’m not smart or young enough to learn about finance and investing.”

Well I’m here to prove to you today this isn’t true.

No matter what your IQ is.  No matter if you’ve been told you’re dumb or slow.  No matter how old you are.   You can learn anything you want…  If you’re willing to put enough time into it.

Even if you have only half a brain…

The Girl With Half A Brain

The Brain That Changes Itself wrote about a woman who was born with only half her brain.   I couldn’t find the original video of her.  I did find this article detailing here story here… But the video above shows similar results from the work of neuroplasticity.

Newer studies have confirmed that kids’ brains are more plastic – changing more and faster – than adults.  Yet if adults work hard, concentrate, and practice a lot using deliberate practice methods, adult brains can change a lot too.

Just take a look at the two videos below for more proof.

“They Don’t Dare To Dream”

The Woman With Multiple Learning Disabilities Changes Her Brain

For more information on Barbara Arrowsmith-Young go to her website here.

I got chills watching this video.

While at my worst I wasn’t as bad off as the woman in this video.  I still couldn’t do much for the last ten years without feeling terribly dizzy.  And when I was at my worst I did fall.

Why Do We Fall?

I wish I could have seen this before my dizziness came… Because when I fell I didn’t even try to get back up for several years.

This story is outside the scope of this article.  But my dizziness did get bad enough where I fell.

I was dumb enough to continue to work 20+ hours a week while going to school half the day during my senior year.  And still run track as well.  Like I told you, I’m stubborn and persistent.

Some people may even call what I was doing dumb – I was a moron then – because I harmed myself even more by pushing so hard.

I finally gave up and didn’t do anything for almost three years in my late teens and early 20s. That is until my mom found out about the occupational therapist mentioned before.

Over the last decade I saw dozens of doctors. They ran hundreds of tests.   And did many other things that helped further retrain my brain and balance centers that put me on the path towards full recovery.

I finally completed this after 10 long years in May 2014 when I found a new neurologist who gave me medication that allows me to do almost everything I want, outside of running, working out hard, and working myself to exhaustion.

So yes, while the occupational therapist was technically right in saying I wouldn’t ever be “normal” again, I can do almost everything I want.  And most important to me is I can now function as a working adult for my wife and daughters  And play with them as they grow.

This is neuroplasticity in action…  Although I didn’t even know what this was until about a year ago.

Without the brains potential to change and retrain itself I wouldn’t be doing anything I’m doing today.  And I may well have completed the dark thoughts I  talked about in 17 Things That Changed My Life – Some Saved It.

If I can become what I have so far with all the disadvantages I have, imagine what you can do with your college degrees.  Not to mention the time advantages you’ll have of not losing 10 years of your life.

You too can change your brain – and life – with the knowledge of neuroplasticity.  For further reading please read the information below.  And definitely read The Brain That Changed Itself linked throughout this article.

It turns out that my parents were right all along: “You really can become and do whatever you put your mind to.”  Even with only half a brain. So what’s your excuse to not work towards your goals now?

More In Depth Information

If you’d like more information on the power to change your brain go to the following places.

And last up are some Tweets I sent about The Brain That Changes Itself…

Jason Rivera ‏@Jmriv1986 Sep 7

From the book The Brain That Changes Itself #Neuroplasticity#ThePowerofHabit

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Jason Rivera ‏@Jmriv1986 Sep 6

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“The brain isn’t an inanimate vessel that we fill rather it’s more like a living creature with an appetite. One that can grow and (1/2)

Jason Rivera ‏@Jmriv1986 Sep 6

change itself with proper nourishment and exercise.” Michael Mezenich from The Brain That Changes Itself #Neuroplasticity (2/2)

Do you have any experience with the power of neuroplasticity?  If so please let me know in the comments below.

Until next time…  Keep Improving.

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*Repost* 17 Things That Changed My Life Some Saved It

*Repost* 17 Things That Changed My Life

Some Saved It

I’m moving my family across country and am unable to post anything new until settling down in the Tampa area.

For more information on how this will affect anything go here.

I hope you enjoy these older posts in the meantime.  And please feel free to contact me.  I’ll get back to you when I can.

To subscribe to the Value Investing Journey newsletter go here.

To subscribe to the Press On Research exclusive newsletter go here.

Thanks so much.

Jason

This post is something I’ve wanted to write for a while but haven’t been able due to lack of writing skill and fear.  I fixed the lack of writing skill working at the investment newsletter.  And fear only went away because of something I posted on Twitter a few weeks ago.

While reading on StumbleUpon I found a great post: 10 Business Books That Changed My Thinking linked below.  And reposted it on Twitter.

This repost went viral after Tim Ferriss retweeted it.  And then Tweeted to me directly.  This inspired me to write my post detailing the things that changed my life.

At last count 44,854 people viewed this.  Favorited it 143 times.  And retweeted it 39 times.

A couple weeks ago I asked the question, Who Do You Want To Become?  And at the end of it I told you I wanted to be great at everything I do.

And if you’ve followed this blog for a while you know I dealt with serious health issues in the past.

But I’ve never explained either of the above because I’ve been afraid and embarrassed.

For the first time I’m going to tell my full story.  What led me to where I am now.  And what my mindset is going forward.

Some of the things in this post only people who’ve known me for 15+ years know.  Some of the things I’ve only ever told my family.  And some I’ve told no one other than my wife.

What makes people tick has always fascinated me.  Why people do the things they do.  And how great people become great even in the face of adversity.

My hope writing this article is to help anyone who’s struggling realize that if I can overcome, so can you.

17 Things That Changed My Life

Some Saved It

Growing up I only wanted to do two things when I got older.  Travel.  And join the Air Force.

My dad spent 22 years in the Air Force so it was the only life I knew and I loved it.  We moved around a lot growing up which was hard but also exciting.  When you move to new places you get to try new things.  Meet new people.  And visit new areas.

To me moving is like an adventure.  So I wanted to travel when I got older to keep experiencing this.

I was born on Cannon Air Force Base in New Mexico.  Moved from there to Mountain Home Air Force Base in Idaho.  Spent a few years there and then moved to Tyndall Air Force Base in Florida.  And after a few more years moved to Ellsworth Air Force Base in South Dakota where I’ve been for the last 18 years.

Because everyone moves on military bases it’s easy to make new friends.  But what made these transitions even easier was playing sports.  And growing up I played everything: Football, baseball, basketball, wrestling, and track.

Like most kids, I didn’t worry about anything growing up other than when to hang out with my friends next.  And I didn’t spend any time thinking about what I wanted to do when I grew up because I already knew what I was going to do when old enough.

Join the Air Force and travel the world like my dad.

But my plans went awry when I woke up shaking and not able to breathe one night in the summer of 2000.  This is where my story begins on 17 Things That Changed My Life.

Night Of Terror

This night was the most terrifying of my life.  It was so bad that every detail’s etched into my mind, still 15 years later.

We’d just gotten back from visiting family in Idaho in July of 2000.  And after sitting in the car with my brother for 14 hours I needed to get outside.

This was before portable DVD players, Kindle Audiobooks, IPods, and cell phones.  And all my brother and I could do at the ages of 12 and 11 was stare at nothingness or listen to our CD players for 14 straight hours.

For those not old enough to know, CD players are ancient devices use to play music.

I was going crazy by the time we got home so I got hold of my friends as soon as I could.  And we met up and walked to the base gym to play basketball.

I don’t remember how many games we played but when we walked to the gym it was the middle of the day.  When we walked back home it was pitch black.  I was drenched in sweat.  And the hot summer wind wasn’t relieving my overheated exhaustion.

Even though exhaustion overwhelmed me, when I got home I needed to eat something so I didn’t wake up feeling terrible the next day.  I ate some food then collapsed into bed looking forward to the next day hanging out with friends again.

But that would have to wait…

That night I woke up with my whole body shaking uncontrollably.  Not able to breathe.  And barely able to walk.

I shuffled my way towards my parent’s room thinking I was dying.  Got half way and then felt myself falling to the floor.  But I was paralyzed.  I couldn’t move my arms to brace myself.  So I fell head first into the wood floor and blacked out.

The next thing I remember I woke up in a panic.  Thrashing at everything.  And not knowing where I was as the EMT’s loaded me onto the gurney.  All I remember seeing before blacking out again was my mom crying.

The next time I woke up I was in the hospital thrashing again.  Not knowing where I was.  Why I was there.  And in a ton of pain due to my head dive into the wood floor.

After I found out why I was there and what happened the doctors ran more medical tests on me than anyone at the age of 12 should ever have to go through..

After hearing the worst from the doctors that it could be a brain tumor.  We were all in a state of panic waiting for the test results.

Luckily it wasn’t a brain tumor.  But it was still serious…

I had a grand mal – tonic clonic -seizure.  And had Rolandic’s Epilepsy.  A form of epilepsy that’s hereditary and found in kids between the ages of 8 – 18.

I was on medicine for a few years to prevent me from having another seizure.  I never did.  And got off the medicine when I was 17 after retesting and finding out I no longer had to worry about seizures.

While the medicine kept me from having another seizure, there was one massive side effect I had to it.  It damaged my short-term memory, but we’ll get back to this later.

In the short-term I was still able to do everything I wanted to do.  Including playing football.  But this one seizure disqualified me from doing what I’d dreamt of ever since I was a little kid.

I found out I wasn’t able to join the Air Force during my junior year of high school because of this one seizure.  And going into my senior year I had no idea what else to do because that’s all I’d ever wanted to do.  But I had to figure out something to do with my life.

Hamstrung in High School

Having only one year left to figure out what I was going to do I started scrambling.

My first thought went to running track in college.  I loved it.  Was decent at it.  Went to state in a couple sprint relays at the end of my junior year.  And just missed going to state in the individual 100M dash the same year.

I immediately went to a few of my high school coaches who knew state university track coaches to get in contact with them to see what they thought of my chances to make their teams.

I heard back from the head coach of South Dakota State University who said with my times, the first year at school I would have to walk on to the team.  But if I continued to improve I would likely get a scholarship for my sophomore through senior years of college.

Even though this wasn’t my first choice.  I was still excited and my girlfriend and I started making plans to both attend the school.

But at my first race at the state track meet my junior year, disaster struck.

A couple days before this at practice I felt a little twinge in both of my hamstrings.  But since there was no sharp pain, no popping, and only minor soreness I didn’t think much about it.

When our team got to the state track meet my legs were still sore.  But nothing I’ve not run with before so I kept practicing, stretching, and running like I always did to prepare for a race.

This was my first time at state.  And my first race was the 4 X 200 meter relay where I was the third of four legs.

As I saw my teammate rounding the corner coming toward me to hand off the baton my adrenaline spiked.  And the soreness in my legs was gone.  But this didn’t last long.

Within 50 meters of grabbing the baton I knew something was wrong because my legs tightened fast.  At 100 meters I could feel slight popping in my legs and knew I should stop.  But didn’t want to let me teammates down so I kept running.

At 150 meters I felt a couple loud pops.  And at this point all I could do was hobble-run towards my teammate.  I’ve never wished the end of a race came faster than I did then.

At 175 meters I felt some pops in my lower leg that slowed me down even more.  And when I finally got to my teammate I was in last place, exhausted, and collapsed to the ground in pain.

I’d run track since 8th grade in middle school.  Done all different running events up to the one mile.  The 800 meter “dash” is the worst.  Even did long jump and triple jump.    And I’d never been that exhausted.  Or in that much pain after finishing any event.

My coach helped me hobble over to the trainer’s tent to check out my legs.  And while I knew something major was wrong I didn’t expect to hear what he told me.  Not only had I torn both of my hamstrings.  But I also tore both of my calves as well.

After taking some time to recover I spent the rest of the next year working to become stronger for next track season.  But even this didn’t help.

This time as the anchor leg of the 4 X 200 meter relay during the first race of my senior year track season I felt the same pops and pain I did at state the year before.  Ended up hobbling to the finish line.  Threw the baton down to the ground in frustration.  And hobbled to the trainer’s tent already knowing what he was going to tell me.

My body was giving out… I tore both of my hamstrings again.  My senior year track season was over.  And my plans to run track in college were also over.

Back to square one again.

The Nightmare Begins

I spent the summer after my junior year recovering from my hamstring and calf tears working out.  Hanging out with my girlfriend.  Working at Burger King.  And hanging out with friends.

It was a normal summer until late July.

I don’t remember what happened in a vivid way like I did with my seizure because this was a slow progression.  Not paralysis, thinking I was dying, collapsing, and blacking out one night.

I remember getting a cold that lasted a while and being a bit dizzy during the cold.  But nothing else spectacular.

This cold lasted for a couple weeks and at the end of it I noticed I was dizzy all the time.  Not dizzy as in vertigo or Meniere’s Disease. But I always felt like I was moving.  Even when I wasn’t.

I’ve always had trouble describing this feeling.  And this is the best way I’ve ever found to describe how I felt.

One day a couple years after this started I was driving downtown with my girlfriend and stopped at a red light.  All the sudden I felt the entire car moving as if I was pushing the gas so I slammed on the brakes.

I turned to my girlfriend and asked her if the car was moving and she said no.

After this I didn’t drive for several years.

At first I was dizzy all day, every day for three months.  Then all the sudden one day it would go away and I would feel great for three months.  This went on for my senior year of high school.  And then one day the dizziness came and stayed.  This time for 10 years.

But before we get to that we need to finish talking about high school.  Because a few more things happened in my junior and senior years of high school that changed my life forever.

Good Things Did Come Out Of High School

High school wasn’t all bad.

For most of high school I had fun with my friends.  Played football.  Ran track.  Had girlfriends.  And had fun like any other normal high school kid.

You may have noticed that I haven’t talked at all about the things I learned in high school changing my life.  And that’s because even though I had great teachers, nothing I learned changed my life the entire time I was in school.  Formal education teaches you nothing about life.  How to make decisions.  Or how to think for yourself.

The exception was one semester during my senior year.

When I was in school, every senior had a light load of classes unless they chose to take AP classes.  The only mandatory classes were English and a Government/Consumerism class split one each semester.

The Government class was interesting because I’ve always loved learning history.  English was where one of my teachers told me ” I hope you never want to become a writer, because you’re terrible at it.”  But Consumerism class is where I learned several life altering things.

My First Foray Into Stocks

What follows is an excerpt from my book describing this class.

I’ve always liked the thought of investing since learning the basics and the power of compounding during my senior year of high school in 2004/2005.  At my high school every senior had to take one semester of government and one semester of consumerism.

This is a hybrid class that taught about different subjects one of them being the basics of investing and the power of compound interest.

Which I did not comprehend at the time, basic investing ratios, what dividends were, and other entry level investing concepts.

At the end of the class there was a project where we got put into groups of three or four people and found companies to invest in with a fake money account.

The group whose portfolio went up the most in the few week experiment won the contest and got the highest grade for the project.

I ended up being the leader of my group because I was the only one who was interested in investing at all.

The first batch of companies we picked were ones that typical hormone fueled teenage boys might pick to buy: Playboy and Nike among others.

I don’t remember picking those companies for any reason other than we liked the products as they pertained to Nike.  And thought it would be cool to be Hugh Hefner and own Playboy… For the articles of course.

This was the depth of our analysis on the first batch of companies we bought.

As the weeks went on and the school year got closer to ending, being normal seniors, the interest of the other members of the group interest dropped even further.  And I was the only one still doing work on the project as the semester was getting ready to end.

Since I was left to do whatever I wanted I started doing research on a company that would be a fantastic investment.  Not only for the class project but over the long term.

The company was overtaking its competitors fast.  It had its IPO within a year or two of that time.  And it was becoming one of the most used and well known sites in the world.

Again, this was the depth of the analysis at that time.

But even then with my limited knowledge I recognized what I would later call a moat.

Since I was, and still am, ultra competitive and wanted to win.  I dumped all the other stocks in the portfolio that we bought and put the entire fake money portfolio into this one company that was selling somewhere between $60-$70 a share if memory serves me right.

The company’s stock didn’t end up going up enough for our group to win the contest but I was proven right over the long-term.

The company the entire fake money portfolio of $100,000 was put into sold for between $60-$70 a share at that time.

If I would’ve held those 1428-1666 shares of stock until this present writing with the company now selling for around $793 a share I would’ve turned that original $100K fake investment into $1,132,404-$1,321,138 in eight years.

That comes out to a compound annual growth rate (CAGR) of 35.44% and 38.08% respectively.

As an example of how phenomenal that is, Warren Buffett averaged a CAGR of 20% over 40 years to become one of the richest people in the world.

This potential result while phenomenal was all luck because of the lack of research.  But it taught me a valuable lesson that I still adhere to today.

If you buy stock into a company that has huge market share and a sustainable competitive advantage.  Over time you’ll do great investing.

For those who haven’t guessed the company that I would’ve made a killing on if it was a real money portfolio.  It’s the worldwide search engine leader.  One of the biggest and most innovative companies in the world.  Google, stock ticker (GOOG.)

These first lessons in competitive advantage, market share, compound interest, and opportunity cost helped changed my life.

But we have one more thing to talk about before leaving high school.

Finding Love

I don’t do anything half assed.

I hate wasting others time and hate having mine wasted so I either do things 100% or I don’t do it at all.

This applies to all aspects of my life including relationships.

Ever since I can remember, every relationship I had I knew within a few months whether it should continue or not.  And any time I went into a new relationship I went in with the mindset it was going to last a while.

Even with this mindset I didn’t expect my next girlfriend to also be my last at the age of 16.

But great things don’t come along often in life.  So no matter what age you are, when greatness is possible, go for it.  Whether in business, love, or life in general.

And it turns out I was lucky when I found her.

She’s stuck with me through all the dizziness.  Through me not being able to do anything outside the house for years at a time.  And through me spending thousands of hours without making any money to become the best investor I can.  So when I did get healthy I could provide for my family.

The picture above is of my wife, two daughters, and me from last summer.

We’ve just celebrated our 12 year anniversary.  Six of those we’ve been married.  And I can’t wait to see what the future holds for us.

But this isn’t the only great thing to come from our relationship.

Becoming A Dad

At the point we got married I’d been dizzy for five years.

I went to an occupational therapist who gave me some exercises that helped my dizziness get slowly better.  But I still felt awful 90% of the time.

The little time I felt decent I started trying to figure out what I wanted to do when I got healthy.  Since I wasn’t able to go to college because of the dizziness, I had limited options.  And I could only think of three things.

I came up with becoming a local politician.  A writer.  Or learning about the stock market.

I figured the world didn’t need any more scum bag politicians and I’m a terrible liar so I ruled that out.  I decided not to become a writer because of what my high school teacher said to me.  So by default I picked learning about stocks.

Not because I wanted to or was excited.  But what I remembered learning in high school, it was the only thing I could think of that I had even minor interest in.

I started learning but lacked focus.  And I continued to use my dizziness as an excuse to do nothing.

That is until the day my wife told me I was going to be a dad.

I was sitting on the couch playing FIFA Soccer on my Playstation 3 one day when my wife tells me that she was pregnant.  I said ok because what she said didn’t register to me and went back to playing.

After a couple seconds what she said finally registered.  And I asked her to repeat what she said and it was something like this:  “I’m pregnant and you’re going to be a dad.”

After this I learned as much as I could when I didn’t feel terrible.  But still lacked focus and direction so I wasn’t retaining anything I read.

Until a trip to Best Buy gave my life direction.

Life Lessons Learned In Best Buy

A few months after this the wife and I took a trip to our local Best Buy to look at dishwashers to install.

We walked around the store like we always did when going there.  And then went to the appliance section to find our dishwasher.  While we didn’t find a dishwasher that day.  We found something more valuable that altered our lives.

As soon as we walked into the appliance section a smiling, tall, older guy with graying hair greeted us wearing khaki’s.  And of course the famous blue Best Buy associate shirt.

I don’t remember how we got on the subject that I was learning about investing.  But when we did he told me about the book Rich Dad Poor Dad by Robert Kiyosaki.  Said I had to read it.  And it would change my life.

He was genuinely nice and for some reason seemed to care about what I told him about me.  So after we got out of the store my wife and I went to Borders down the road and bought the book.

I’m always wary when people say something will change my life but he was right.

The book lit my imagination on fire and I read the book in a few days.  I took a bunch of notes.  And looked up anything I didn’t understand online.

Rich Dad Poor Dad changed my life.  Gave me direction and focus.  And set me on the path that I’m still on today.

I’ve been in the local Best Buy a lot before and after this, but I’ve never seen that guy any other time.  But if I saw him today I would give him a hug and offer to buy him a beer.  Because without this chance meeting I wouldn’t be where I’m at today.

But this isn’t the only book I read early in my investing journey that still shapes how I do things today.

Thinking Like A Champion

After years of not being able to do anything due to extreme dizziness I had no confidence in myself.  I thought I was a leech on society and my wife and family.  And even if I did get healthy I didn’t have any skills of value to offer the world.

But learning about investing took my mind off this horrible mindset.  And gave me hope that one day I would be able to contribute in a meaningful way.

Hope will only take you so far if you think of yourself like I did at this point in my life.

I needed to change my entire mindset but up to this point I didn’t know how… Until I came across Think and Grow Rich by Napoleon Hill.  Only 99 cents on Kindle now.

If you lack confidence you need to read this book.  It will teach you that if you have the right mindset you can do anything and become anything.

I can’t recommend this book enough.  And without it and the next two people I wouldn’t be here today.

John Chew Saved My Life…

A year or so after Rich Dad Poor Dad, and Think and Grow Rich revitalized me, my momentum stalled.  And I hit rock bottom sometime in 2009 or 2010.

At this point I’d dealt with extreme dizziness for almost five years.  The exercises the occupational therapist gave me weren’t helping anymore.  No other doctor or specialist I saw helped.  Most of them even treated me like I was faking.  And worst of all my stock portfolio just lost 50% of it’s value in a few months.

I was tired of not being able to do anything.  I was tired of feeling terrible all the time.  I was tired of leeching off my wife, daughter, family, and society.  I was tired of failing.  And I was tired of continuing to hope with no progress and no end in sight.

One night my wife left to work her overnight shift as an RN at our local hospital.  My daughter was in bed for the night.  And there I was, a ~24 year old man playing a game on my Playstation 3 bawling like I never had before or since.

I’d given up.  And as I sat on the couch bawling I thought about killing myself so my wife and daughter could have a better life without me dragging them down anymore.

I’d never had these thoughts before and they scared the hell out of me.  But I was in such a deep state of depression that nothing helped.  And I continued to flounder until I found John Chew’s CSInvesting a few months later which restored hope in my life.

If you’ve never been to the above site you need to click on the link and go now.  It’s one of the best investment sites I’ve ever been to.  And it saved my life.

Finding CSInvesting is what I imagine a religious person coming across a religious epiphany might feel.  Energized, hope restored, dark clouds of despair lifting, etc.

The site is so great that I went back from the start of the blog and read and practiced everything that was on it then.  Asked questions on the blog.  And became fanatical about learning everything I could.

Not only did this take my mind off the deep despair I was in.  But it replaced the despair with hope and knowledge that if I worked and practiced a lot I would become a great value investor over time.

The books, case studies, investment analysis, videos, and everything talked about on the blog is so phenomenal it lifted me from my years long depression.  And I’ve not looked back since.

While I devoured everything on the site he recommended something else kept my momentum going so I didn’t slip back into depression like I had many times before.

… And So Did Aswath Damodaran

I learned so much about investing and how to think from CSInvesting. Was so energized.  And worked so hard that I made myself feel even worse all the time.

But I couldn’t stop…

I had a newborn daughter that I had to develop a valuable skill for so I could provide for my family when I got healthy.  But more important in the short-term was I didn’t want to slip back into depression.  And I was afraid that if I slowed down I would.

So when John recommended a free MBA level course from a world-renowned value investing teacher I jumped at the chance.

Aswath Damodaran is a professor at NYU Stern in New York.  Consults with Goldman Sachs to teach it’s analysts how to value businesses.  Writes a great blog talking about valuing businesses.  And releases his valuation course online for free.

I was a part of the first online class he released where he shared everything he knows about how to value businesses using DCF calculations.

If you’ve followed this blog for a while you know I never use DCF valuations when evaluating companies.  So why is this course one of the things that changed my life?

Because he shared something even more important than just valuing businesses.  He taught how to think about businesses when you’re evaluating them.  And introduced Charlie Munger and his teachings into my life.   We’ll get back to Mr. Munger later.

I won’t ruin any of the specifics of his course for you.  But if you want to learn about DCF valuations.  And want to learn how to become a better thinker and investor you need to take his course at the link above.

Thank you John and Aswath for sharing information.   Because without you two I wouldn’t be where I’m at as an investor today.  And I might not be here at all… Thanks for literally saving my life.

The Single Person I’ve Learned Most From

Charlie Munger

I’ve studied and learned more from Charlie Munger than any other single person about investing and life.  Yes, this includes Warren Buffett.

Charlie Munger is Buffett’s right hand man at Berkshire Hathaway.  Was a great investor in his own right before coming to Berkshire.  And is a philanthropist and great thinker.

I think so highly of Mr. Munger that if I had to choose who to have dinner with out of he or Buffett.  And I could never have dinner with the other.  I would choose Mr. Munger without hesitating.

Below is a partial reading list from and about Mr. Munger that have influenced not only how I approach investing and evaluating businesses.  But also how I think and do everything now.

Without Mr. Munger sharing everything he has I would be a much worse person, investor, entrepreneur, and thinker.

But there’s something that helped my business analysis skill level explode.

The Journey Begins

When I started learning about investing almost every site, book, video, or article I watched about getting better said you need to write your ideas and analysis down.  They all said this because if you write things down you’ll remember more.  Learn more.  And become a better investor faster.

But because of stubbornness and laziness I didn’t do this until years after starting to learn about investing.  And this stunted my growth.

How do I know this?  Because after I started the original version of Value Investing Journey, I improved faster in a few months than I did in the years before this.

Not only because of the reasons above.  But if you write things down it’s easier to spot gaps in your analysis because you can go back and see what you need to improve on.

But this wasn’t the biggest help.

The biggest help learning was the feedback I got from Whopper Investments.  Red from the Red Corner Blog.  Readers of this blog.  And many others who gave me constructive criticism on how to improve going forward.

Without help from these people, I wouldn’t be helping others today.

But I was still struggling health wise and needed to find a way to become more efficient with my time so I could be more productive.  Turns out there was a book that was helping people become more efficient.

“Man This Guy Is Full Of Shit.”

After getting out of the doldrums of deep depression I worked any minute I could towards learning about investing.  But because of the extreme dizziness I couldn’t work as much as I wanted.  And wasn’t learning as fast as I wanted to.

One day I was talking to Taylor from ValuePrax who told me about a book called: The Four Hour Work Week by Tim Ferriss – only $1.99 on Kindle.

I read the cover and back flap of the book and thought to myself man this guy is full of shit.  There’s no way Tim Ferriss does this, and there’s no way this book will help me become more efficient.

But because a friend I respect recommended it, I decided there must be something in the book I could learn so I went ahead and read it anyways.

And I’m glad I did…

Turns out the book isn’t about working only four hours a week.  It’s a guide to become more efficient.  Become a better thinker.  Travel more.  Find better people to work with.  And how to live the kind of life you dream of.

In short it’s a book that teaches you how to achieve your dreams.

The Four Hour Work Week changed my life more than any other book I’ve read.

Without the Four Hour Work Week by Tim Ferriss I wouldn’t be an author of the acclaimed value investment education book How To Value Invest.  I wouldn’t get hired at a prominent investment newsletter.  I wouldn’t be here helping as many people as I can with the blog, book, and other services.  I wouldn’t be giving to any charities.  And I wouldn’t still be working towards my goals today.

Without this book I would’ve given up again at some point of adversity.

If there is one thing everyone needs to read in this post it’s The Four Hour Work Week by Tim Ferriss.

But there are still three more books I need to tell you about that changed how I approach everything.

Need Help Developing? Read These Three Books

At this point I was more confident.  Developing good habits.  And starting to become a real thinker, investor, and writer.  But I needed help taking the next step because I was still procrastinating too much.  And was using my dizziness as an excuse not to work.

From The Four Hour Work Week to this point several years passed as I concentrated more on things other than learning and improving.

I learned a lot in this time.  But the three books below I’ve read in the last year after getting on some new medicine that’s gotten rid of my dizziness.  Mostly.  Effect everything I do now.  And will continue to help me going forward as I work toward success and helping as many people as possible.

I’ve combined talking about the three books below because the lessons taught in every book intertwine with each other.  And reading each helps understand lessons in the others.

Choose Yourself

If you want to work for yourself, build businesses, and be an entrepreneur you need to read this book.

It goes over Mr. Altucher’s own journey of making millions.  Losing millions.  Getting divorced.  Thinking about suicide.  And how he bounced back to become the huge success he is today.

One of the main topics the book talks about is how you can become creative over time if you train yourself to do so.

I’ve never been creative so this was of particular interest to me.  I always wanted to be better at generating ideas but never knew how.

The advice in the book helped train me to become more creative and come up with more ideas.  This in turn made me a better thinker, investor, and entrepreneur.

If you have Kindle Unlimited you can read this book for free.  Or you can buy it on Kindle for only 99 cents.

The Power Of Habit

Below is part of my post Car Wash Psychology, Mental Models, and The Power Of Habit where I talked about the amazing book The Power Of Habit.

The Power of Habit is an amazing book.  And I agree with Mr. Pink above.

It’s changed the way I think about how I parent.  My investment processes.  Psychology.  And how I do everything in my life.  In short I cannot recommend that you read this book enough.

Below is author Charles Duhigg explaining in a three-minute video how we develop habits.  And how to break bad habits.

Mindset

I came across this book of all places when I was on SportsIllustrated.com.

The article details how a young kid from the video editing department worked his way up to become a two-time NBA champion head coach of the Miami Heat.

Below is an excerpt from the above linked article:

The first time Miami fell in the Finals, to the Mavericks in 2011, Spoelstra installed an organizational “improvement program.” He ordered coaches to read books and attend clinics, then write reports about what they learned. One staffer was instructed to mine every Malcolm Gladwell article for relevant thoughts. Spoelstra, who listened to John Maxwell leadership CDs on the drive to work every day, was taking the equivalent of 30,000 jumpers again. He discovered a book by Carol S. Dweck called Mindset and became consumed with the distinction between a growth mind-set and fixed mind-set.

“When you subscribe to a growth mind-set, you challenge yourself to do things differently, and you actually produce a drug in your brain that allows you to work more creatively,” he says. “That’s when you’re most alive.” For someone naturally wary of change, the material was revelatory. Spoelstra and his assistants got into peak shape so they could carry lessons onto the practice court, where they devised the pace-and-space offense that yielded two championships, along with a 27-game winning streak in 2012–13. Love them or hate them, the Heat were the first superpower of the Information Age. They had to be seen, heard and tweeted about. They simultaneously bemoaned the scrutiny and fed off it.

As value investors we have to be autodidacts – learn and teach ourselves things all the time.  So we continue to improve all our processes.

Mindset by Dr. Carol Dweck should be mandatory reading for everyone who self learns.  Especially so you know how to get yourself back into the proper mindset when you reach adversity.

This is just one of many examples why you need to read everything and not just investment related content…  You never know when you will come across something that will change how you approach everything.

You Can Do It

As a kid I hated reading and writing.  And never did it unless I was forced.  Too bad I didn’t know then what I know now or I could be even farther toward achieving my goals.

Because not only does money and knowledge compound over time.  But so do the decisions you make.

But I know this now.  And will continue to compound knowledge well into the future with the habits and proper mindset I’ve built over the last several years.

Of course there are other great things I’ve learned from over the years.  And some of them not mentioned in this post are teachings by and from: Sanjay Bakshi. Dream Big – The Story of 3G Capital which you can read for free if you have Kindle Unlimited.  Moonwalking With Einstein which helped me realize I could train my memory and get back what I lost to the epilepsy medicine.  My memory is better now than it’s ever been. Joel Greenblatt’s You Can Be A Stock Market Genius.  Bruce Greenwald’s Competition Demystified and Value Investing: From Graham To Buffett and Beyond.  The Berkshire Hathaway Shareholder Letters, and Warren Buffett’s Partnership letters.  And much more.

But now that I’m finally healthy after a decade of extreme dizziness and deep depression.  And still only 28 I can’t wait to see what the rest of my life has in store.

Now that I’ve built the proper mental foundation, when I do come across major adversity again I’m positive I won’t slip back into deep depression.  And think the way I was then again.

But I didn’t write this post for me.  I wrote it for you.

If you know someone who is struggling or you’re struggling yourself.  My hope with this post is that there’s something in it that will help you recover and contribute to the world and your own well-being.

Because if I can do it with my long-term extreme health issues and lack of formal education.  So can you.

But most important, don’t give up, don’t ever give up.

P.S.  If you’re dealing with a major struggle/deep depression, talk to someone who you’re close with or get professional help.  While telling my wife didn’t get me out of depression right away.  It did lift a burden off my shoulders and helped me start the process of recovering.

P.P.S. Shitty writer, HA.

Reading Ease of 75.4 and an FK score of 6 for this 29 page 6,992 word post.

For more information on the above go here.

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On Failure and Purpose

On Failure and Purpose

Whether you love him or hate you have to admit that Steve Jobs is one of the most influential people of the last 30 years.

He started Apple and grew it to become a great company.  Got fired from the beloved company he founded.  Started Next and worked with Pixar.  And then got brought back to Apple to save the company.

But he didn’t just save it.  He changed the world as we know it with the products the company introduced.

So I thought it’d be great to learn from a super successful guy who failed a lot on the way.

Are you ready to do what’s necessary to be great.  And achieve your goals?

Just Ask

Stay Hungry, Stay Foolish

Do you love what you do?

“The ones who loved what they did persevered.  And the ones who didn’t love it quit because they’re sane.”  Steve Jobs

“If you haven’t found it yet don’t settle.  And keep looking” Steve Jobs

“If today were the last day of my life would I want to do what I’ about to do?” Steve Jobs

“Have the courage to follow your heart and intuition.  They somehow already know what you truly want to become.  Everything else is secondary.” Steve Jobs

What is your purpose?

“I recently read a shocking statistic. Did you know that most heart attacks happen on a Monday? It doesn’t matter where in the world you live, the highest occurrence of heart attacks seems to be between 8am-9am on Monday morning.

According to a recent study, the risk of a heart attack increases by about 20 percent on Mondays for men and 15 percent for women.

Why do you think this is?

I believe it has a lot to do with the feeling of dread that overcomes us as we are getting ready to go to work. Because let’s face it; very few of us enjoy our jobs.

In fact, if you have a college education or higher the chances are that you hate what you do. You probably fell into a good corporate career in your twenties, lured by prospects and credentials rather than passion.

Years later you find yourself trapped.” Les Brown

So…  What is your purpose?  And are you working towards your goals?

Let me know in the comments below.

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*Repost* 17 Things That Changed My Life – Some Saved It

*Repost* 17 Things That Changed My Life

Some Saved It

This post is something I’ve wanted to write for a while but haven’t been able due to lack of writing skill and fear.  I fixed the lack of writing skill working at the investment newsletter.  And fear only went away because of something I posted on Twitter a few weeks ago.

While reading on StumbleUpon I found a great post: 10 Business Books That Changed My Thinking linked below.  And reposted it on Twitter.

This repost went viral after Tim Ferriss retweeted it.  And then Tweeted to me directly.  This inspired me to write my post detailing the things that changed my life.

At last count 44,854 people viewed this.  Favorited it 143 times.  And retweeted it 39 times.

A couple weeks ago I asked the question, Who Do You Want To Become?  And at the end of it I told you I wanted to be great at everything I do.

And if you’ve followed this blog for a while you know I dealt with serious health issues in the past.

But I’ve never explained either of the above because I’ve been afraid and embarrassed.

For the first time I’m going to tell my full story.  What led me to where I am now.  And what my mindset is going forward.

Some of the things in this post only people who’ve known me for 15+ years know.  Some of the things I’ve only ever told my family.  And some I’ve told no one other than my wife.

What makes people tick has always fascinated me.  Why people do the things they do.  And how great people become great even in the face of adversity.

My hope writing this article is to help anyone who’s struggling realize that if I can overcome, so can you.

17 Things That Changed My Life

Some Saved It

Growing up I only wanted to do two things when I got older.  Travel.  And join the Air Force.

My dad spent 22 years in the Air Force so it was the only life I knew and I loved it.  We moved around a lot growing up which was hard but also exciting.  When you move to new places you get to try new things.  Meet new people.  And visit new areas.

To me moving is like an adventure.  So I wanted to travel when I got older to keep experiencing this.

I was born on Cannon Air Force Base in New Mexico.  Moved from there to Mountain Home Air Force Base in Idaho.  Spent a few years there and then moved to Tyndall Air Force Base in Florida.  And after a few more years moved to Ellsworth Air Force Base in South Dakota where I’ve been for the last 18 years.

Because everyone moves on military bases it’s easy to make new friends.  But what made these transitions even easier was playing sports.  And growing up I played everything: Football, baseball, basketball, wrestling, and track.

Like most kids, I didn’t worry about anything growing up other than when to hang out with my friends next.  And I didn’t spend any time thinking about what I wanted to do when I grew up because I already knew what I was going to do when old enough.

Join the Air Force and travel the world like my dad.

But my plans went awry when I woke up shaking and not able to breathe one night in the summer of 2000.  This is where my story begins on 17 Things That Changed My Life.

Night Of Terror

This night was the most terrifying of my life.  It was so bad that every detail’s etched into my mind, still 15 years later.

We’d just gotten back from visiting family in Idaho in July of 2000.  And after sitting in the car with my brother for 14 hours I needed to get outside.

This was before portable DVD players, Kindle Audiobooks, IPods, and cell phones.  And all my brother and I could do at the ages of 12 and 11 was stare at nothingness or listen to our CD players for 14 straight hours.

For those not old enough to know, CD players are ancient devices use to play music.

I was going crazy by the time we got home so I got hold of my friends as soon as I could.  And we met up and walked to the base gym to play basketball.

I don’t remember how many games we played but when we walked to the gym it was the middle of the day.  When we walked back home it was pitch black.  I was drenched in sweat.  And the hot summer wind wasn’t relieving my overheated exhaustion.

Even though exhaustion overwhelmed me, when I got home I needed to eat something so I didn’t wake up feeling terrible the next day.  I ate some food then collapsed into bed looking forward to the next day hanging out with friends again.

But that would have to wait…

That night I woke up with my whole body shaking uncontrollably.  Not able to breathe.  And barely able to walk.

I shuffled my way towards my parent’s room thinking I was dying.  Got half way and then felt myself falling to the floor.  But I was paralyzed.  I couldn’t move my arms to brace myself.  So I fell head first into the wood floor and blacked out.

The next thing I remember I woke up in a panic.  Thrashing at everything.  And not knowing where I was as the EMT’s loaded me onto the gurney.  All I remember seeing before blacking out again was my mom crying.

The next time I woke up I was in the hospital thrashing again.  Not knowing where I was.  Why I was there.  And in a ton of pain due to my head dive into the wood floor.

After I found out why I was there and what happened the doctors ran more medical tests on me than anyone at the age of 12 should ever have to go through..

After hearing the worst from the doctors that it could be a brain tumor.  We were all in a state of panic waiting for the test results.

Luckily it wasn’t a brain tumor.  But it was still serious…

I had a grand mal – tonic clonic -seizure.  And had Rolandic’s Epilepsy.  A form of epilepsy that’s hereditary and found in kids between the ages of 8 – 18.

I was on medicine for a few years to prevent me from having another seizure.  I never did.  And got off the medicine when I was 17 after retesting and finding out I no longer had to worry about seizures.

While the medicine kept me from having another seizure, there was one massive side effect I had to it.  It damaged my short-term memory, but we’ll get back to this later.

In the short-term I was still able to do everything I wanted to do.  Including playing football.  But this one seizure disqualified me from doing what I’d dreamt of ever since I was a little kid.

I found out I wasn’t able to join the Air Force during my junior year of high school because of this one seizure.  And going into my senior year I had no idea what else to do because that’s all I’d ever wanted to do.  But I had to figure out something to do with my life.

Hamstrung in High School

Having only one year left to figure out what I was going to do I started scrambling.

My first thought went to running track in college.  I loved it.  Was decent at it.  Went to state in a couple sprint relays at the end of my junior year.  And just missed going to state in the individual 100M dash the same year.

I immediately went to a few of my high school coaches who knew state university track coaches to get in contact with them to see what they thought of my chances to make their teams.

I heard back from the head coach of South Dakota State University who said with my times, the first year at school I would have to walk on to the team.  But if I continued to improve I would likely get a scholarship for my sophomore through senior years of college.

Even though this wasn’t my first choice.  I was still excited and my girlfriend and I started making plans to both attend the school.

But at my first race at the state track meet my junior year, disaster struck.

A couple days before this at practice I felt a little twinge in both of my hamstrings.  But since there was no sharp pain, no popping, and only minor soreness I didn’t think much about it.

When our team got to the state track meet my legs were still sore.  But nothing I’ve not run with before so I kept practicing, stretching, and running like I always did to prepare for a race.

This was my first time at state.  And my first race was the 4 X 200 meter relay where I was the third of four legs.

As I saw my teammate rounding the corner coming toward me to hand off the baton my adrenaline spiked.  And the soreness in my legs was gone.  But this didn’t last long.

Within 50 meters of grabbing the baton I knew something was wrong because my legs tightened fast.  At 100 meters I could feel slight popping in my legs and knew I should stop.  But didn’t want to let me teammates down so I kept running.

At 150 meters I felt a couple loud pops.  And at this point all I could do was hobble-run towards my teammate.  I’ve never wished the end of a race came faster than I did then.

At 175 meters I felt some pops in my lower leg that slowed me down even more.  And when I finally got to my teammate I was in last place, exhausted, and collapsed to the ground in pain.

I’d run track since 8th grade in middle school.  Done all different running events up to the one mile.  The 800 meter “dash” is the worst.  Even did long jump and triple jump.    And I’d never been that exhausted.  Or in that much pain after finishing any event.

My coach helped me hobble over to the trainer’s tent to check out my legs.  And while I knew something major was wrong I didn’t expect to hear what he told me.  Not only had I torn both of my hamstrings.  But I also tore both of my calves as well.

After taking some time to recover I spent the rest of the next year working to become stronger for next track season.  But even this didn’t help.

This time as the anchor leg of the 4 X 200 meter relay during the first race of my senior year track season I felt the same pops and pain I did at state the year before.  Ended up hobbling to the finish line.  Threw the baton down to the ground in frustration.  And hobbled to the trainer’s tent already knowing what he was going to tell me.

My body was giving out… I tore both of my hamstrings again.  My senior year track season was over.  And my plans to run track in college were also over.

Back to square one again.

The Nightmare Begins

I spent the summer after my junior year recovering from my hamstring and calf tears working out.  Hanging out with my girlfriend.  Working at Burger King.  And hanging out with friends.

It was a normal summer until late July.

I don’t remember what happened in a vivid way like I did with my seizure because this was a slow progression.  Not paralysis, thinking I was dying, collapsing, and blacking out one night.

I remember getting a cold that lasted a while and being a bit dizzy during the cold.  But nothing else spectacular.

This cold lasted for a couple weeks and at the end of it I noticed I was dizzy all the time.  Not dizzy as in vertigo or Meniere’s Disease. But I always felt like I was moving.  Even when I wasn’t.

I’ve always had trouble describing this feeling.  And this is the best way I’ve ever found to describe how I felt.

One day a couple years after this started I was driving downtown with my girlfriend and stopped at a red light.  All the sudden I felt the entire car moving as if I was pushing the gas so I slammed on the brakes.

I turned to my girlfriend and asked her if the car was moving and she said no.

After this I didn’t drive for several years.

At first I was dizzy all day, every day for three months.  Then all the sudden one day it would go away and I would feel great for three months.  This went on for my senior year of high school.  And then one day the dizziness came and stayed.  This time for 10 years.

But before we get to that we need to finish talking about high school.  Because a few more things happened in my junior and senior years of high school that changed my life forever.

Good Things Did Come Out Of High School

High school wasn’t all bad.

For most of high school I had fun with my friends.  Played football.  Ran track.  Had girlfriends.  And had fun like any other normal high school kid.

You may have noticed that I haven’t talked at all about the things I learned in high school changing my life.  And that’s because even though I had great teachers, nothing I learned changed my life the entire time I was in school.  Formal education teaches you nothing about life.  How to make decisions.  Or how to think for yourself.

The exception was one semester during my senior year.

When I was in school, every senior had a light load of classes unless they chose to take AP classes.  The only mandatory classes were English and a Government/Consumerism class split one each semester.

The Government class was interesting because I’ve always loved learning history.  English was where one of my teachers told me ” I hope you never want to become a writer, because you’re terrible at it.”  But Consumerism class is where I learned several life altering things.

My First Foray Into Stocks

What follows is an excerpt from my book describing this class.

I’ve always liked the thought of investing since learning the basics and the power of compounding during my senior year of high school in 2004/2005.  At my high school every senior had to take one semester of government and one semester of consumerism.

This is a hybrid class that taught about different subjects one of them being the basics of investing and the power of compound interest.

Which I did not comprehend at the time, basic investing ratios, what dividends were, and other entry level investing concepts.

At the end of the class there was a project where we got put into groups of three or four people and found companies to invest in with a fake money account.

The group whose portfolio went up the most in the few week experiment won the contest and got the highest grade for the project.

I ended up being the leader of my group because I was the only one who was interested in investing at all.

The first batch of companies we picked were ones that typical hormone fueled teenage boys might pick to buy: Playboy and Nike among others.

I don’t remember picking those companies for any reason other than we liked the products as they pertained to Nike.  And thought it would be cool to be Hugh Hefner and own Playboy… For the articles of course.

This was the depth of our analysis on the first batch of companies we bought.

As the weeks went on and the school year got closer to ending, being normal seniors, the interest of the other members of the group interest dropped even further.  And I was the only one still doing work on the project as the semester was getting ready to end.

Since I was left to do whatever I wanted I started doing research on a company that would be a fantastic investment.  Not only for the class project but over the long term.

The company was overtaking its competitors fast.  It had its IPO within a year or two of that time.  And it was becoming one of the most used and well known sites in the world.

Again, this was the depth of the analysis at that time.

But even then with my limited knowledge I recognized what I would later call a moat.

Since I was, and still am, ultra competitive and wanted to win.  I dumped all the other stocks in the portfolio that we bought and put the entire fake money portfolio into this one company that was selling somewhere between $60-$70 a share if memory serves me right.

The company’s stock didn’t end up going up enough for our group to win the contest but I was proven right over the long-term.

The company the entire fake money portfolio of $100,000 was put into sold for between $60-$70 a share at that time.

If I would’ve held those 1428-1666 shares of stock until this present writing with the company now selling for around $793 a share I would’ve turned that original $100K fake investment into $1,132,404-$1,321,138 in eight years.

That comes out to a compound annual growth rate (CAGR) of 35.44% and 38.08% respectively.

As an example of how phenomenal that is, Warren Buffett averaged a CAGR of 20% over 40 years to become one of the richest people in the world.

This potential result while phenomenal was all luck because of the lack of research.  But it taught me a valuable lesson that I still adhere to today.

If you buy stock into a company that has huge market share and a sustainable competitive advantage.  Over time you’ll do great investing.

For those who haven’t guessed the company that I would’ve made a killing on if it was a real money portfolio.  It’s the worldwide search engine leader.  One of the biggest and most innovative companies in the world.  Google, stock ticker (GOOG.)

These first lessons in competitive advantage, market share, compound interest, and opportunity cost helped changed my life.

But we have one more thing to talk about before leaving high school.

Finding Love

I don’t do anything half assed.

I hate wasting others time and hate having mine wasted so I either do things 100% or I don’t do it at all.

This applies to all aspects of my life including relationships.

Ever since I can remember, every relationship I had I knew within a few months whether it should continue or not.  And any time I went into a new relationship I went in with the mindset it was going to last a while.

Even with this mindset I didn’t expect my next girlfriend to also be my last at the age of 16.

But great things don’t come along often in life.  So no matter what age you are, when greatness is possible, go for it.  Whether in business, love, or life in general.

And it turns out I was lucky when I found her.

She’s stuck with me through all the dizziness.  Through me not being able to do anything outside the house for years at a time.  And through me spending thousands of hours without making any money to become the best investor I can.  So when I did get healthy I could provide for my family.

The picture above is of my wife, two daughters, and me from last summer.

We’ve just celebrated our 12 year anniversary.  Six of those we’ve been married.  And I can’t wait to see what the future holds for us.

But this isn’t the only great thing to come from our relationship.

Becoming A Dad

At the point we got married I’d been dizzy for five years.

I went to an occupational therapist who gave me some exercises that helped my dizziness get slowly better.  But I still felt awful 90% of the time.

The little time I felt decent I started trying to figure out what I wanted to do when I got healthy.  Since I wasn’t able to go to college because of the dizziness, I had limited options.  And I could only think of three things.

I came up with becoming a local politician.  A writer.  Or learning about the stock market.

I figured the world didn’t need any more scum bag politicians and I’m a terrible liar so I ruled that out.  I decided not to become a writer because of what my high school teacher said to me.  So by default I picked learning about stocks.

Not because I wanted to or was excited.  But what I remembered learning in high school, it was the only thing I could think of that I had even minor interest in.

I started learning but lacked focus.  And I continued to use my dizziness as an excuse to do nothing.

That is until the day my wife told me I was going to be a dad.

I was sitting on the couch playing FIFA Soccer on my Playstation 3 one day when my wife tells me that she was pregnant.  I said ok because what she said didn’t register to me and went back to playing.

After a couple seconds what she said finally registered.  And I asked her to repeat what she said and it was something like this:  “I’m pregnant and you’re going to be a dad.”

After this I learned as much as I could when I didn’t feel terrible.  But still lacked focus and direction so I wasn’t retaining anything I read.

Until a trip to Best Buy gave my life direction.

Life Lessons Learned In Best Buy

A few months after this the wife and I took a trip to our local Best Buy to look at dishwashers to install.

We walked around the store like we always did when going there.  And then went to the appliance section to find our dishwasher.  While we didn’t find a dishwasher that day.  We found something more valuable that altered our lives.

As soon as we walked into the appliance section a smiling, tall, older guy with graying hair greeted us wearing khaki’s.  And of course the famous blue Best Buy associate shirt.

I don’t remember how we got on the subject that I was learning about investing.  But when we did he told me about the book Rich Dad Poor Dad by Robert Kiyosaki.  Said I had to read it.  And it would change my life.

He was genuinely nice and for some reason seemed to care about what I told him about me.  So after we got out of the store my wife and I went to Borders down the road and bought the book.

I’m always wary when people say something will change my life but he was right.

The book lit my imagination on fire and I read the book in a few days.  I took a bunch of notes.  And looked up anything I didn’t understand online.

Rich Dad Poor Dad changed my life.  Gave me direction and focus.  And set me on the path that I’m still on today.

I’ve been in the local Best Buy a lot before and after this, but I’ve never seen that guy any other time.  But if I saw him today I would give him a hug and offer to buy him a beer.  Because without this chance meeting I wouldn’t be where I’m at today.

But this isn’t the only book I read early in my investing journey that still shapes how I do things today.

Thinking Like A Champion

After years of not being able to do anything due to extreme dizziness I had no confidence in myself.  I thought I was a leech on society and my wife and family.  And even if I did get healthy I didn’t have any skills of value to offer the world.

But learning about investing took my mind off this horrible mindset.  And gave me hope that one day I would be able to contribute in a meaningful way.

Hope will only take you so far if you think of yourself like I did at this point in my life.

I needed to change my entire mindset but up to this point I didn’t know how… Until I came across Think and Grow Rich by Napoleon Hill.  Only 99 cents on Kindle now.

If you lack confidence you need to read this book.  It will teach you that if you have the right mindset you can do anything and become anything.

I can’t recommend this book enough.  And without it and the next two people I wouldn’t be here today.

John Chew Saved My Life…

A year or so after Rich Dad Poor Dad, and Think and Grow Rich revitalized me, my momentum stalled.  And I hit rock bottom sometime in 2009 or 2010.

At this point I’d dealt with extreme dizziness for almost five years.  The exercises the occupational therapist gave me weren’t helping anymore.  No other doctor or specialist I saw helped.  Most of them even treated me like I was faking.  And worst of all my stock portfolio just lost 50% of it’s value in a few months.

I was tired of not being able to do anything.  I was tired of feeling terrible all the time.  I was tired of leeching off my wife, daughter, family, and society.  I was tired of failing.  And I was tired of continuing to hope with no progress and no end in sight.

One night my wife left to work her overnight shift as an RN at our local hospital.  My daughter was in bed for the night.  And there I was, a ~24 year old man playing a game on my Playstation 3 bawling like I never had before or since.

I’d given up.  And as I sat on the couch bawling I thought about killing myself so my wife and daughter could have a better life without me dragging them down anymore.

I’d never had these thoughts before and they scared the hell out of me.  But I was in such a deep state of depression that nothing helped.  And I continued to flounder until I found John Chew’s CSInvesting a few months later which restored hope in my life.

If you’ve never been to the above site you need to click on the link and go now.  It’s one of the best investment sites I’ve ever been to.  And it saved my life.

Finding CSInvesting is what I imagine a religious person coming across a religious epiphany might feel.  Energized, hope restored, dark clouds of despair lifting, etc.

The site is so great that I went back from the start of the blog and read and practiced everything that was on it then.  Asked questions on the blog.  And became fanatical about learning everything I could.

Not only did this take my mind off the deep despair I was in.  But it replaced the despair with hope and knowledge that if I worked and practiced a lot I would become a great value investor over time.

The books, case studies, investment analysis, videos, and everything talked about on the blog is so phenomenal it lifted me from my years long depression.  And I’ve not looked back since.

While I devoured everything on the site he recommended something else kept my momentum going so I didn’t slip back into depression like I had many times before.

… And So Did Aswath Damodaran

I learned so much about investing and how to think from CSInvesting. Was so energized.  And worked so hard that I made myself feel even worse all the time.

But I couldn’t stop…

I had a newborn daughter that I had to develop a valuable skill for so I could provide for my family when I got healthy.  But more important in the short-term was I didn’t want to slip back into depression.  And I was afraid that if I slowed down I would.

So when John recommended a free MBA level course from a world-renowned value investing teacher I jumped at the chance.

Aswath Damodaran is a professor at NYU Stern in New York.  Consults with Goldman Sachs to teach it’s analysts how to value businesses.  Writes a great blog talking about valuing businesses.  And releases his valuation course online for free.

I was a part of the first online class he released where he shared everything he knows about how to value businesses using DCF calculations.

If you’ve followed this blog for a while you know I never use DCF valuations when evaluating companies.  So why is this course one of the things that changed my life?

Because he shared something even more important than just valuing businesses.  He taught how to think about businesses when you’re evaluating them.  And introduced Charlie Munger and his teachings into my life.   We’ll get back to Mr. Munger later.

I won’t ruin any of the specifics of his course for you.  But if you want to learn about DCF valuations.  And want to learn how to become a better thinker and investor you need to take his course at the link above.

Thank you John and Aswath for sharing information.   Because without you two I wouldn’t be where I’m at as an investor today.  And I might not be here at all… Thanks for literally saving my life.

The Single Person I’ve Learned Most From

Charlie Munger

I’ve studied and learned more from Charlie Munger than any other single person about investing and life.  Yes, this includes Warren Buffett.

Charlie Munger is Buffett’s right hand man at Berkshire Hathaway.  Was a great investor in his own right before coming to Berkshire.  And is a philanthropist and great thinker.

I think so highly of Mr. Munger that if I had to choose who to have dinner with out of he or Buffett.  And I could never have dinner with the other.  I would choose Mr. Munger without hesitating.

Below is a partial reading list from and about Mr. Munger that have influenced not only how I approach investing and evaluating businesses.  But also how I think and do everything now.

Without Mr. Munger sharing everything he has I would be a much worse person, investor, entrepreneur, and thinker.

But there’s something that helped my business analysis skill level explode.

The Journey Begins

When I started learning about investing almost every site, book, video, or article I watched about getting better said you need to write your ideas and analysis down.  They all said this because if you write things down you’ll remember more.  Learn more.  And become a better investor faster.

But because of stubbornness and laziness I didn’t do this until years after starting to learn about investing.  And this stunted my growth.

How do I know this?  Because after I started the original version of Value Investing Journey, I improved faster in a few months than I did in the years before this.

Not only because of the reasons above.  But if you write things down it’s easier to spot gaps in your analysis because you can go back and see what you need to improve on.

But this wasn’t the biggest help.

The biggest help learning was the feedback I got from Whopper Investments.  Red from the Red Corner Blog.  Readers of this blog.  And many others who gave me constructive criticism on how to improve going forward.

Without help from these people, I wouldn’t be helping others today.

But I was still struggling health wise and needed to find a way to become more efficient with my time so I could be more productive.  Turns out there was a book that was helping people become more efficient.

“Man This Guy Is Full Of Shit.”

After getting out of the doldrums of deep depression I worked any minute I could towards learning about investing.  But because of the extreme dizziness I couldn’t work as much as I wanted.  And wasn’t learning as fast as I wanted to.

One day I was talking to Taylor from ValuePrax who told me about a book called: The Four Hour Work Week by Tim Ferriss – only $1.99 on Kindle.

I read the cover and back flap of the book and thought to myself man this guy is full of shit.  There’s no way Tim Ferriss does this, and there’s no way this book will help me become more efficient.

But because a friend I respect recommended it, I decided there must be something in the book I could learn so I went ahead and read it anyways.

And I’m glad I did…

Turns out the book isn’t about working only four hours a week.  It’s a guide to become more efficient.  Become a better thinker.  Travel more.  Find better people to work with.  And how to live the kind of life you dream of.

In short it’s a book that teaches you how to achieve your dreams.

The Four Hour Work Week changed my life more than any other book I’ve read.

Without the Four Hour Work Week by Tim Ferriss I wouldn’t be an author of the acclaimed value investment education book How To Value Invest.  I wouldn’t get hired at a prominent investment newsletter.  I wouldn’t be here helping as many people as I can with the blog, book, and other services.  I wouldn’t be giving to any charities.  And I wouldn’t still be working towards my goals today.

Without this book I would’ve given up again at some point of adversity.

If there is one thing everyone needs to read in this post it’s The Four Hour Work Week by Tim Ferriss.

But there are still three more books I need to tell you about that changed how I approach everything.

Need Help Developing? Read These Three Books

At this point I was more confident.  Developing good habits.  And starting to become a real thinker, investor, and writer.  But I needed help taking the next step because I was still procrastinating too much.  And was using my dizziness as an excuse not to work.

From The Four Hour Work Week to this point several years passed as I concentrated more on things other than learning and improving.

I learned a lot in this time.  But the three books below I’ve read in the last year after getting on some new medicine that’s gotten rid of my dizziness.  Mostly.  Effect everything I do now.  And will continue to help me going forward as I work toward success and helping as many people as possible.

I’ve combined talking about the three books below because the lessons taught in every book intertwine with each other.  And reading each helps understand lessons in the others.

Choose Yourself

If you want to work for yourself, build businesses, and be an entrepreneur you need to read this book.

It goes over Mr. Altucher’s own journey of making millions.  Losing millions.  Getting divorced.  Thinking about suicide.  And how he bounced back to become the huge success he is today.

One of the main topics the book talks about is how you can become creative over time if you train yourself to do so.

I’ve never been creative so this was of particular interest to me.  I always wanted to be better at generating ideas but never knew how.

The advice in the book helped train me to become more creative and come up with more ideas.  This in turn made me a better thinker, investor, and entrepreneur.

If you have Kindle Unlimited you can read this book for free.  Or you can buy it on Kindle for only 99 cents.

The Power Of Habit

Below is part of my post Car Wash Psychology, Mental Models, and The Power Of Habit where I talked about the amazing book The Power Of Habit.

The Power of Habit is an amazing book.  And I agree with Mr. Pink above.

It’s changed the way I think about how I parent.  My investment processes.  Psychology.  And how I do everything in my life.  In short I cannot recommend that you read this book enough.

Below is author Charles Duhigg explaining in a three-minute video how we develop habits.  And how to break bad habits.

Mindset

I came across this book of all places when I was on SportsIllustrated.com.

The article details how a young kid from the video editing department worked his way up to become a two-time NBA champion head coach of the Miami Heat.

Below is an excerpt from the above linked article:

The first time Miami fell in the Finals, to the Mavericks in 2011, Spoelstra installed an organizational “improvement program.” He ordered coaches to read books and attend clinics, then write reports about what they learned. One staffer was instructed to mine every Malcolm Gladwell article for relevant thoughts. Spoelstra, who listened to John Maxwell leadership CDs on the drive to work every day, was taking the equivalent of 30,000 jumpers again. He discovered a book by Carol S. Dweck called Mindset and became consumed with the distinction between a growth mind-set and fixed mind-set.

“When you subscribe to a growth mind-set, you challenge yourself to do things differently, and you actually produce a drug in your brain that allows you to work more creatively,” he says. “That’s when you’re most alive.” For someone naturally wary of change, the material was revelatory. Spoelstra and his assistants got into peak shape so they could carry lessons onto the practice court, where they devised the pace-and-space offense that yielded two championships, along with a 27-game winning streak in 2012–13. Love them or hate them, the Heat were the first superpower of the Information Age. They had to be seen, heard and tweeted about. They simultaneously bemoaned the scrutiny and fed off it.

As value investors we have to be autodidacts – learn and teach ourselves things all the time.  So we continue to improve all our processes.

Mindset by Dr. Carol Dweck should be mandatory reading for everyone who self learns.  Especially so you know how to get yourself back into the proper mindset when you reach adversity.

This is just one of many examples why you need to read everything and not just investment related content…  You never know when you will come across something that will change how you approach everything.

You Can Do It

As a kid I hated reading and writing.  And never did it unless I was forced.  Too bad I didn’t know then what I know now or I could be even farther toward achieving my goals.

Because not only does money and knowledge compound over time.  But so do the decisions you make.

But I know this now.  And will continue to compound knowledge well into the future with the habits and proper mindset I’ve built over the last several years.

Of course there are other great things I’ve learned from over the years.  And some of them not mentioned in this post are teachings by and from: Sanjay Bakshi. Dream Big – The Story of 3G Capital which you can read for free if you have Kindle Unlimited.  Moonwalking With Einstein which helped me realize I could train my memory and get back what I lost to the epilepsy medicine.  My memory is better now than it’s ever been. Joel Greenblatt’s You Can Be A Stock Market Genius.  Bruce Greenwald’s Competition Demystified and Value Investing: From Graham To Buffett and Beyond.  The Berkshire Hathaway Shareholder Letters, and Warren Buffett’s Partnership letters.  And much more.

But now that I’m finally healthy after a decade of extreme dizziness and deep depression.  And still only 28 I can’t wait to see what the rest of my life has in store.

Now that I’ve built the proper mental foundation, when I do come across major adversity again I’m positive I won’t slip back into deep depression.  And think the way I was then again.

But I didn’t write this post for me.  I wrote it for you.

If you know someone who is struggling or you’re struggling yourself.  My hope with this post is that there’s something in it that will help you recover and contribute to the world and your own well-being.

Because if I can do it with my long-term extreme health issues and lack of formal education.  So can you.

But most important, don’t give up, don’t ever give up.

P.S.  If you’re dealing with a major struggle/deep depression, talk to someone who you’re close with or get professional help.  While telling my wife didn’t get me out of depression right away.  It did lift a burden off my shoulders and helped me start the process of recovering.

P.P.S. Shitty writer, HA.

Reading Ease of 75.4 and an FK score of 6 for this 29 page 6,992 word post.

For more information on the above go here.

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*Repost* Car Wash Psychology, Mental Models, And The Power Of Habit

*Repost* Car Wash Psychology, Mental Models, And The Power Of Habit

Getting back from a 33 hour drive across the country left me exhausted.  But I had one thing left to do before resting.

I had to wash my truck…

From the salty and sticky humidity of South Florida.  Through the rain, snow, and ice of Tennessee and Kentucky.  Then the dry wind of Iowa and South Dakota.  And all the bugs and dirt between.  My truck was a disaster after a 33 hour drive through nine states.

Why did I have to wash my truck when I got home?

Because several weeks before this I’d read a psychology and marketing case study about car washes. And I wanted to see if it was true or not.

Exhausted from the three-day drive across country. I waited at the car wash and marveled at the surprising beautiful March day in Western South Dakota.

Instead of negative wind chills. High wind. And blizzards that are common at that time of year here. I came home to a cloudless sunny sky. And 70 degree temperatures.

It was a perfect day to wash my truck. But after getting it into the car wash bay I worried that I’d made a mistake.

Why?

Because of marketing, psychology, and habit.

But we will get back to this later…

Building Worldly Wisdom and A Latticework of Mental Models

Why am I talking about marketing, psychology, and habit on a value investing blog?

As a contrarian deep value investor, I’m always looking for ways to gain legal advantages over other investors.  Most of the time this involves working hard.  But sometimes it also requires the ability to think well.

To think better I study a lot of topics.  And follow Charlie Munger’s teachings about gaining Worldly Wisdom.  And building a latticework of mental models.

One of the areas I’ve spent a huge amount of time studying is human psychology. Trying to figure out  why we do what we do.  And what makes us tick to become a better investor.

How To Get People To Buy Things

I know a lot about how to analyze businesses for potential investment.  So when I got hired by the investment newsletter I was not only excited to write an investment newsletter.  But I also looked forward to learning about the investment newsletter business.  And everything associated with it including psychology and marketing.

If I wasn’t at work.  At the beach.  Sleeping.  Or working at home.  I was reading anything I could about marketing and how to improve my writing.  But for this post I want to talk about some of the things I learned about marketing…

Marketers Rule The World

Did you know that shampoo doesn’t have to foam to clean your hair?  What was Listerine used for before marketers got involved?  Did you know that Febreze was a failure until marketers used psychology and habit to market it?  And does your car get cleaner when you upgrade to the “Super Wash.”

I will answer these questions below.  And also answer how marketers use psychology to get us to develop habits.  And buy products.

Shampoo

Below is a marketing case study from Procter & Gamble brand Herbal Essences.  Which before marketers revamped it was floundering.  Emphasis is mine.

I also changed some of the wording to shorten things.  For the full transcript go to this link.

When Procter & Gamble acquired hair-care company Clairol in 2001, it inherited a floundering shampoo brand. By 2004, Herbal Essences was in a “long-term decline,” reports Chairman and CEO A.G. Lafley.

Marketed to all women the line had gone stale, with little distinction from the many competitors it shared on the drugstore shelf.

By 2006, Lafley and P&G’s beauty business chief, Susan Arnold, knew something had to be done with the tired brand.

To find the right new, smaller target market for the brand, Arnold and her team turned to marketers.

There, the team came up with a new target audience for the brand—Generation Y. “In the case of Gen Y, there really wasn’t another hair-care brand that was really meeting their needs,” says Lafley. “The question was: ‘Can Herbal do it?'”

Arnold’s team bet yes. They redesigned the packaging of the product to “fit” this more tailored market: The shampoo and conditioner bottles are curved so that they literally fit together on the shelf. The nesting shape not only helped Herbal Essences stand out from others on the shelf but also encouraged more young women to buy both products, driving up conditioner sales.

To appeal to Millennials, the team also updated the language on the packaging. The ho-hum “dandruff” reference gave way to “no flaking away.” Names for different hair styles were changed to more youthful phrases such as “totally twisted” or “drama clean.” “We totally reframed the proposition,” says Lafley.

P&G made Herbal Essences more relaxed and more quirky, all in the language of young women.

Marketers used psychology and habit to turn this floundering line into a billion dollar plus brand.  And Herbal Essences parent Clariol now controls an estimated 39% of the entire hair care market.

For further information on the revival of Herbal Essences look at this infographic.

Oh and to answer the above question…  The chemical sodium lauryl sulfate was added to shampoo to foam and bubble.  It’s not necessary in shampoo.  And it doesn’t affect how well the shampoo cleans your hair.

Shampoo makers added the foaming agent for marketing and psychology purposes. To help sell product and build habit.

I will explain this more later.

Oh and the foaming ingredient is also what irritates your skin and eyes.  So thank marketers for your dry skin.  And eye pain when washing your hair.

Listerine The Antiseptic

Did you know Listerine was a deodorant and after shave.  A brand of cigarettes.  And used to treat gonorrhea and cuts before becoming a mouth wash?

Below is one of the ads used to promote Listerine after it launched..

But by focusing on cuts, scratches, and gonorrhea Listerine was a failure.

Then marketers got involved.  Made bad breath a terrible thing.  And launched a $317 million brand as of 2013

Until that time, bad breath was not conventionally considered such a catastrophe. But Listerine changed that. As the advertising scholar James B. Twitchell writes, “Listerine did not make mouthwash as much as it made halitosis.” In just seven years, the company’s revenues rose from $115,000 to more than $8 million. From Wikipedia

Instead of saying Listerine will help keep your cuts from becoming infected.  Marketers found out that Listerine also helped get rid of bad breath.  And they used the second ad above to illustrate the point.

Listerine marketers made having bad breath a terrible thing.  Up to that point this wasn’t awful.

In the second ad above marketers said that if you have bad breath you won’t get married.  But if you use Listerine on a regular basis – making it a habit – not only will you get rid of bad breath.  But it will also help you get the guy or girl of your dreams.

So marketers used psychology and habit to help get rid of smelly hair and breath.  What other smells have marketers helped us get rid of?

Febreze The Failure

The below quoted area is from Wikipedia.  Emphasis is mine.

The product, initially marketed as a way to get rid of unpleasant smells, sold poorly until P&G realised that people become accustomed to smells in their own homes, and stop noticing them even when they are overpowering (like the smell of several cats in a single household).

The marketing then switched to linking it to pleasant smells and good cleaning habits instead, which resulted in a massive increase in sales.

Only after the product became well established in the marketplace did the marketing go back to emphasising odor elimination properties as well.

They have advertised it so that people use it for cleaning, and for designing the house air.

Febreze was a failure when it launched.  Even after Procter and Gamble – one of the best product launch companies in the world – spent millions of dollars to promote it.

Febreze didn’t become the huge success it is until P&G figured out how to market it to us.  And they’ve done a great job… Febreze is now a billion dollar plus brand.

For more information on how marketers used psychology and habit to change Febreze from a flop to a billion dollar brand go here.

Now let’s get back to the story at the beginning of this post…

Car Wash Psychology

So why was I so eager to get my car washed when I got home from my 33 hour cross-country trip.  And how did marketers make me think I’d made a mistake when selecting my car wash?

A few weeks before my trip I was reading about marketing and psychology to improve my knowledge in those areas.  And came across a case study about the car wash industry.

The case study detailed how car washes get us to upgrade to the higher end washes so they make more money.  But the thing that struck me like a brick was that the different color bubbles in the car wash don’t do anything to clean or wax your car.

The colored bubbles only make us think they wash better

The car washes add colors to the bubbles of the higher end washes to make us think they are doing something.  It’s a clever way marketers – in this case the car wash – affects our psychology to get us to upgrade.  But it also builds habits as well.  And habits are what marketers use to get us to buy stuff.

The Power Of Habit

The Power of Habit is an amazing book.  And I agree with Mr. Pink above.

It’s changed the way I think about how I parent.  My investment processes.  Psychology.  And how I do everything in my life.  In short I cannot recommend that you read this book enough.

Below is author Charles Duhigg explaining in a three-minute video how we develop habits.  And how to break bad habits.

The Combined Power of Psychology, Marketing, and Habit

So now let’s get back to why I worried at the beginning of this story.

After my trip I decided to do a little experiment to see if the car wash case study I read was full of crap.  Or if it was right and car washes were using psychology and habit to get us to upgrade to stuff we didn’t need.

When I got to the car wash I picked the basic wash without the colored bubbles to see if the case study was right.  But when I got into the wash I started to worry that I’d wasted my money.

Ever since I was little everyone always told me to upgrade to the “better” car washes.  If I didn’t my car wouldn’t get clean and I would have to wash my car again.

So even though I knew that the upgraded car washes weren’t necessary after reading the case study.  And doing further research to confirm the findings.  As I sat in the car wash bay with the water and soap running over my truck.  I began to worry that I’d wasted my money when I didn’t see the colored bubbles washing my truck.

Marketers have incredible power when they combine psychology and habit when selling stuff…

Even though I knew the colored bubbles were a marketing tactic.  I still worried that I was wasting money.

So the longer I sat there the more anxious I got to see if the basic wash worked…

After I got through the air dryer I got out of my truck to see if I wasted my money or not.

With the water still beading off my red Dodge Ram 1500 I saw that the basic wash got all the salt, dirt, bugs, snow and rain water spots off my truck.  And my truck was as clean and shiny as the day I bought it.

Seeing this brought a smile to my face knowing that I learned some powerful lessons about marketing, psychology, and habit.  Built my latticework of mental models and worldly wisdom up.  And got a bit closer to achieving my goals as an investor, teacher, and entrepreneur.

Still smiling knowing I learned something valuable, I drove my clean truck home and slept for the next 16 hours.

And I’ve shared this story in the hopes that it will help you in some way too.

What quirky mental models, worldly wisdom, or aspects of psychology have you learned that blew your mind when you first saw them?

Please share below in the comments.

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Want more information on how marketers use psychology to get us to buy stuff…  Go here.  It looks like an entire college level course about marketing and consumer market psychology.

And if you want to read more about Mr. Munger’s thoughts on psychology and how to think better, read his speech Psychology of Human Misjudgment.

Or watch the 76 minute talk below from YouTube.

This is the best thing I’ve ever read about psychology.  And how to become a better thinker.

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