Is Your Thinking Keeping You Poor? Article 53: How the rich transcend fallible emotion
by Douglas Kruger
The rich use numbers to transcend fallible emotional judgement
It’s a Tuesday morning and I’m psyched up. I’ve had my protein shake, loaded a high-energy playlist onto my iPhone, and I enter the gym on legs day to discover something wonderful: the weights section is almost entirely empty. The squats rack is available – a rare and glorious treat – and so, putting on my headphones, I head directly for it.
I line myself up beneath the barbell, ensure that my form is correct (thank you, Muscle & Fitness magazine), and slowly but steadily work through ten repetitions. Then I increase the weight and repeat the process. I know how much weight I can manage, and I work my way up to it. Eventually, I arrive at my heaviest weights.
One rep. Two reps. Three …
The sweat is beading on my brow. I’m breathing deeply and my jaw is clenched. I get up to six reps and I’m starting to feel the fatigue. Figuring that that’s about as much as I can do, I re-rack the barbell and let out a steam of pent-up breath, leaning against the rack.
As I catch my breath, I pull up the Notes file on my phone in which I keep track of all of my weightlifting numbers, and discover something alarming. Six repetitions on that weight is not my maximum. It turns out I can actually manage ten. Knowing this, I prepare myself for the next set. This time I don’t stop at six. I go all the way to ten, simply because I know I can. The numbers have told me so.
In any form of performance, numbers matter greatly. They matter because they do not lie, and they matter because they transcend emotion. They cut right through the mess in our minds and bring objective standards to anything. Numbers help us to overcome what we feel like on the day, because they are objective. In transcending the messy world of emotion, they give us guidance.
Many of our previously held, inherited thoughts and beliefs about work and wealth can easily return to trip us up. Using numbers, however, is an effective defence. They force you to escape the entanglements of past thinking and the detrimental psychology of what you feel like on the day.
Suppose your goal is to write a book. You have a deadline in only two months, and you need to produce some sixty thousand words. So, you break your goal down into numbers and discover that you should write about a thousand words per day, every day, consistently, to meet your goal.
If you are operating on emotion – just walking up to the squats rack and seeing how you feel at the time – you may not produce your thousand words on a given day. On some days, you may simply not feel like writing at all. Thus led by your feelings, you will miss your goal. But if you are led by numbers, you will achieve it. It’s that simple.
The pursuit of wealth is no different. In fact, if anything, numbers are even more important when it comes to wealth.
At the simplest level, here are the numbers you should be interested in: how much money enters your account each month, and how much leaves it? Most poor and middle-class people don’t know the answer to this question. They could give you a vague indication, but not an exact number: ‘I have about twenty grand in debit orders that go off. I then spend about two or three grand on entertainment.’ We are notoriously bad at such estimations. We fool ourselves. We do the proverbial six repetitions at the squats rack, believing that that’s about right.
Track the real numbers, and you find out that the debit orders going off each month are actually closer to thirty grand, not twenty. And that the money spent on entertainment hovers at around five or six. We could look at those actual numbers, as opposed to our assumed ones, and realise ‘That’s not sustainable. I’m not earning enough to keep that up. I’m getting poorer every month.’
Knowing our own numbers is incredibly important. It is empowering. It puts the control back in our hands, and wipes away our mythological beliefs, replacing them with actual data.
In a number of books (Thinking, fast and slow, Freakonomics: A rogue economist explores the hidden side of everything, David & Goliath: Underdogs, misfits, and the art of battling giants), authors cite studies that show us something interesting. When a layperson and an expert (in just about any sphere) compete with each other and attempt to guess the outcome of a series of events, the expert will tend to guess more accurately than the layperson. That is what we would expect. However, if the layperson is simply given a set of reliable parameters to use, the difference between the expert and the layperson all but disappears.
In other words, when we try to predict something using emotion, we are rarely correct. But when we add numbers, which transcend emotion, we can, in many ways, be as effective as the industry experts. Numbers give invaluable guidance to our thinking.
Wealthy people run their businesses and their lives with a thorough knowledge of their numbers. They are not guided by emotional mythology.
I mentioned earlier on that the super-rich are also partially in love with the idea of numbers. In a surprising number of studies, it was revealed that money had ceased to be important to such individuals. What they cared about was merely the game of making their numbers bigger. That could mean ‘amounts of money’, but equally, it could mean:
- number of units produced;
- number of products created;
- number of patents registered;
- number of new branches opened; or
- number of countries in which they operate, etc.
They found a metric that excited them, and drew deep satisfaction from watching it grow.
In a small way, I understand this. I draw satisfaction from daily word count in my writing, as well as the total number of books I’ve written. I imagine that at the highest levels of authorship, people like Stephen King, Dean Koontz, or J.K. Rowling must derive incredible satisfaction from the same thing. They have long since surpassed the need to work. Their unborn great-great-grandchildren can already retire. Yet they keep producing. They clearly love what they do, and I have no doubt that there is a rewarding ego boost in watching the numbers grow.
Which measurable numbers are a part of your world? Do you track them, and can you grow them? Numbers transcend fallible emotion, while simultaneously offering a meaningful reward.
Numbers can also indicate opportunity. For instance, if I examine the numbers of my online book sales and determine that they are small, I uncover a major opportunity, which I then need to grow and systematise. Had I not checked on the numbers, I may not have spotted this.
Poverty mindset: Numbers bore me. I just don’t have a head for them.
Wealth mindset: Numbers fascinate me. They show me where my strengths and weaknesses are. They guide me and help me to become better.
Douglas Kruger is a business author and professional speaker. See him in action, or read his articles, at www.douglaskruger.co.za. Douglas’s books, including ‘Is Your Thinking Keeping You Poor? 50 Ways the Rich Think Differently,’ are available at Exclusive Books, Estoril, CNA, and as ebooks from Amazon.com