November 23, 2023

Episode 280: Shane Parrish: Clear Thinking in Everyday Life

November 23, 2023

Shane Parrish is an Entrepreneur, New York Times bestselling author, speaker, and advisor. His free weekly newsletter, Brain Food, is one of the most popular in the world. Each edition offers practical insights you can use in daily life and work (give it a try @ fs.blog/newsletter). He also hosts one of the most popular podcasts in the world called The Knowledge Project (listen and learn @ fs.blog/podcast). Previous guests include Kat Cole, Bill Ackman, Esther Perel, Daniel Kahneman, and many others.

In this episode, we delve into the complexity of navigating life's challenges, taking risks, fostering self-confidence, and honing problem-solving skills. Joining us is Shane Parrish, a best-selling author, to help us unpack this nuanced topic through the lens of his new book, Clear Thinking. His latest publication is a roadmap for recognizing pivotal moments for clear thought and exposing how our defaults often drive us. He aims to empower readers to intervene, harness reasoning, and apply cognitive tools for better decision-making. Shane is also the founder of the website blog Farnam Street and the venture capitalist firm Syrus Partners. In our conversation, we explore the steps to becoming a clear thinker and how the mantra can be applied to our daily lives. We discuss how ordinary moments influence our decisions, the definition of true goals, and how to build self-confidence. We also unpack the barriers that hinder clear thinking, the difference between playing on hard and playing on easy, the value of continual growth, and much more. Tune in and discover how to master risk, confidence, and problem-solving with Shane Parrish!

Key Points From This Episode:

(0:00:19) Background about Shane Parrish and his new best-selling book, Clear Thinking.

(0:03:19) The significance of ordinary moments and the benefits of becoming a clear thinker.

(0:06:32) Examples of how ordinary moments can multiply bigger decisions to zero.

(0:08:20) Defining true goals, and why regularly reassessing them ensures personal growth.

(0:11:07) Clear thinking's role in reaching goals and how it helps evaluate your objectives.

(0:12:19) Discover the defaults that hinder clear thinking and strategies to overcome them.

(0:25:22) Best practices as a decision-making tool and the value of unconventional paths.

(0:26:51) Explore the role of self-confidence in clear thinking and taking the first step.

(0:33:03) Learn about the importance of good habits in developing clear thinking.

(0:36:23) Making your own rules, sticking to them, and how they can help in social situations.

(0:44:17) Characterizing the problem before starting the problem-solving process.

(0:48:52) Shane shares why he values time over money.

(0:53:24) Steps for curating your mental environment and Shane’s definition of success.

Read The Transcript:

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix and Cameron Passmore, portfolio managers at PWL Capital.

Cameron Passmore: Welcome to Episode 280. In fact, Ben, this week, it's from three Canadians. In fact, three people from the Ottawa area. This week, we welcome Shane Parrish, who I'm sure many listeners know. Shane was actually our guest back on Episode 19, almost five years ago to the day, if you can believe it, Ben. One of our very early guests.

Ben Felix: I mean, thank you to Shane for coming under a podcast at Episode 19. That was very nice of him to do. That's pretty early on.

Cameron Passmore: Sure is. Shane has become a friend of ours, make it safe to say. He's a great guy, nice guy. He recently released a book called Clear Thinking: Turning Ordinary Moments into Extraordinary Results. In fact, this morning, we're recording this on the 12th of October this morning. Shane's book became a New York Times best-seller, so shout out to Shane. The book is fantastic, highly recommended.

Shane's the founder of Farnam Street, which is a website blog, and a weekly email service dedicated to helping us master the best of what other people have already figured out. It is a wildly, wildly popular podcast, as well called The Knowledge Project. He's also the author of the trilogy series, The Great Mental Models, which is a beautiful series of hardcover books. We've reviewed them on the pod before. Great conversation. I think you'd agree, Ben.

Ben Felix: Yes, the book is about clear thinking, and this conversation was all about clear thinking. I think he said at the end of the conversation that this conversation made the book better, which I think is true. It's an incredible – Shane, he's brilliant, first of all. He talks about what he's done. None of these are his ideas. What he's done is synthesize them and communicated them in a way that people can digest. What he's done is absolutely incredible. The amount of wisdom and thinking that has gone into his writing is unbelievable. His ability to communicate that in this conversation was also incredible.

Cameron Passmore: I told him before we started recording that, I thought this book is very applicable to pretty much anyone from teenagers on up. It's a widely applicable book. Very well written, very easy to read. I flew through it. It's a terrific project. Shout out to Shane, and congratulations to him. He deserves all the success that comes from this book for sure.

Ben Felix: Yes, that is a great episode. I hope people listen to it, and I think that people who do listen to it are going to come away from it being incrementally better than they were before, and I truly believe that.

Cameron Passmore: All right. With that, let's go to our conversation with Shane Parrish.

***

Cameron Passmore: Shane, welcome back to the Rational Reminder Podcast.

Shane Parrish: Thanks, guys. I'm a big fan. Glad to be back.

Cameron Passmore: It's awesome to have you, and it's been almost five years since the last time you were on, which is pretty cool.

Shane Parrish: It's been a long, five years.

Cameron Passmore: I must say, congratulations on making the New York Times list. I think it was today you made it, right?

Shane Parrish: Yes. I found it last night around eight o'clock.

Cameron Passmore: So let's jump right into it. Read the book, loved it. I'm curious, why does the title of your book refer to ordinary moments?

Shane Parrish: You know, we tell people if they just get these big decisions, that everything will be okay. That's not really how the world works when you think about it. We focus on choosing the right career, choosing the right partner, and picking the right city to live in. In those moments, we know we're making a choice. We generally tend to be fairly rational. I mean, we might not get it perfect, but we're directionally correct. Because we're thinking, "I'm going to be with this person, I need to be conscious of this decision. I need to think through the implications of it." But all of those decisions get multiplied by zero if you don't put work into your relationship. Or you might have the best career opportunity in the world, but if you don't show up and work your butt off every single day, it just goes away.

Those are the moments that we don't tend to think about things, and yet they have the power to multiply all of our progress by zero. I think it's important to just step back a little second and say, "Hey, there's these other moments that really dictate whether you're playing life on easy mode or hard mode, and maybe we should think about them too."

Ben Felix: Can you talk about why it's important to become a clear thinker?

Shane Parrish: I think now more than ever, I mean, we're just thrown out information all over the place. We tend to be edgier than we normally are. I mean, emotions are high. Everybody seems on edge. We end up in these narrow circles that just reaffirm what we already think. I think it's important to be able to step back and get a little perspective on things, and make conscious decisions about not only how we get what we want, but do we really want the right things in life. I think that so often, we don't take time to think about that, and we end up in these little loops and these loops, they just consume us. We follow or we play by other people's scorecards.

There's an example I given the book at the end about, who do we know that became the most successful, richest, most well-known person in their community. These are the things that we're told to want. We want these things because society tells us to want them. Ebenezer Scrooge is one of them. At the end, what did he want, he just wanted to do over. Why? Because none of that mattered. It didn't matter to him at the end, and he pursued those things. This is another thing. He pursued all of those things in a way that was, me first, egocentric, and win at all costs. That's mutually exclusive from what most people consider meaningful in life.

This is about stepping back and saying, "Hey, it's not just enough to know how to get what I want, but I really want to want the right things." Those things change when you're 20. You might want something different than when you're 40, and that's okay. But too often, we don't think about these things.

Ben Felix: I want to come back to ordinary moments. You talked about some of the big decisions that people might be rational or more thoughtful about. Can you talk about the types of things that would be an ordinary moment that could multiply bigger decisions to zero if you get them wrong?

Shane Parrish: A typical domestic argument that happens is like loading the dishwasher. It's Friday night, you both had a long week. You're both tired, you're both stressed, you're both a little emotional. One of you wants to load it one way or the other one obviously has a better plan. This little passive-aggressive remark all of a sudden gets escalated. You just respond without reasoning. We've all been there, I've done this, I'm sure you guys have done this too. It doesn't have to be the dishwasher. It could just be anything. This little thing, that is nothing.

If I were to tap you on the shoulder in that moment, Ben, and be like, "Hey, you're about to put water or gas on this situation." You feel like, "Oh my God. What am I doing? I definitely want to choose water." I don't have to tell you what to choose. I just have to get you out of that moment. What happens is, you do that on a Friday. Well, that your whole weekend is derailed. If you do that enough, your whole relationship gets derailed.

You have to take these moments seriously. That's not to say that we're perfect at them, but there's ways around them and ways to get out of them. There's things that we can do to improve those moments. What that really does is just put us in a better position. If you imagine with your partner, with anybody in your life, there's – Peter Kaufman gave me this analogy. Imagine there's a patch of grass between you and everybody in your life, your kids, your customers, your suppliers, your partner, everybody, and that patch of grass needs to be watered. If you water it, and you put a spark on it, what's going to happen? Nothing. But if you don't water it, you take it for granted, you're not engaging in win-win relationships. The grass dries out. What happens when the grass dries out? Well, this little spark all of a sudden lights it on fire. I feel like that's true in life.

Cameron Passmore: You mentioned wanting the right things. How important is defining your true goals?

Shane Parrish: Well, if you don't define them, what are you working towards? So often, we just want things because other people want them. I mean, how many people have I seen with a Rolex, and I'm like, "You don't even wear watches." But somebody else had a Rolex, so all of a sudden, they have a Rolex. Maybe that's cool, maybe it's not. That's not to judge anybody else for how they're living their life. It's just about how do we become conscious about the things we want. Often, we're not conscious about it. We just want it because somebody else has it, or somebody told us to want it. There is a flip side to this, on an individual level that makes us really unhappy. On a societal level, it actually moves us forward. So if you think about it, if I want to get that Rolex or that Ferrari and there's no objective reason for me to want that, I just want it because other people have it. Well, it might motivate me to work harder, it might motivate me to try new things, it might motivate me to take some more risks.

Society progresses that way. But individually, it can lead to a lot of destructive happiness. The only thing I'm advocating is that you're conscious of those choices, and you're aware when you're working for yourself, and when you're sort of like going after something that maybe doesn't make a lot of sense.

Ben Felix: How do you think people should approach determining what their true goals are?

Shane Parrish: I think it should be like an annual sort of exercise, to be honest with you. You don't set it at 19, and be like, "Here's my goal in life. It's never changing. Here's the destination I'm going to get to." I think you just have to take stock every year with yourself and have a hard conversation. I do this, I go away. I usually go away for a night just to a different city. I want to get out either into nature or into a different city, different environment that I'm in. I really just go for a big walk and I start thinking about, "What are the things that I like doing this year? What are the things I didn't like doing this year? How can I do more of the things I like, less of the things I didn't?" Am I moving in the right direction? Am I growing at the right pace? Can I sustain this? If I get to where I'm going? Do I want to be there? Is it worth it? Because we only get one shot at this thing we call life.

If we spend all of our time on things that aren't important to us, or things that are important to somebody else, then all of a sudden, we get to the destination, and we're like, "Oh. Why am I here?” Dr. Karl Pillemer wrote this book called 30 Lessons for Living. What he did, I thought this was a genius idea. He went to a whole bunch of people who are close to death, and he asked them, "What would you teach us about life?" The number one regret was, they didn't live a life true to themselves. In Warren Buffett's words, they played by somebody else's scoreboard. We have to set our own scoreboard and make sure that we're aware of where we're going, and we're getting the things that we want, and those things are worth wanting.

Cameron Passmore: The title of your book is Clear Thinking. How does clear thinking connect with achieving goals?

Shane Parrish: Clear thinking really helps you with getting what you want. It can help you shift your perspective to make sure that what you want is worth getting. The real benefit to clear thinking, there's sort of three elements to clear thinking, if you think about it. You've read the book, so I think you get this. I put them together for people, but I don't put them together too much, because I want people to do the connective work. When they do the connective work, it sort of becomes more valuable and meaningful.

The first element to clear thinking is positioning. The position that you're in determines whether you're playing on easy mode or hard mode. The second element is, can we manage the urges and impulses that tend to get us in trouble? We can't eliminate them, but can we manage them? We're not going to be perfect. Nobody's perfect to these things. It's not about that. But can we do better than average? The third element is. can we think independently? Part of thinking independently is, are we going to the right destination? Are we setting our own goals and objectives? All those three things combined leads you to think clearer about life. and get better results.

Ben Felix: You just talked about what makes up clear thinking. What are the big things that get in the way of clear thinking?

Shane Parrish: Let me tell you a story about one of my kids. This sort of will relate to decision-making, and maybe give a different perspective on what gets in the way of clear thinking. One of my kids came home the other day, and he gave me one of his tests, and got a really low grade. He got like – I won't even say what it is out loud. If you have a teenager, you know, he just grunted, and he's like, "I did my best." I didn't want to talk to him in the moment, because I know what that's like. I used to play sports, and most kids quit on the car ride on the way home. They quit because they're emotional. They don't want their parents to like – that's not the right time for that conversation.

I let things dissipate a little bit, then I'm like, "Hey, talk to me about this thing. You said you did your best. What does doing your best mean?" He's like, "Oh, well." I was like, “Walk me through it in detail." He's like, "Well, I went to school. Test started are 10am. I read over the whole test. I got the point. I knew which questions were worth the most." Then I allocated my time accordingly, and I answered them to the best of my ability.” I was like, "That's really interesting." A lot of people think of life and decision-making as that. They think I did the best I could in the moment. I get to a meeting, I'm not prepared, somebody ask me a question, I do my best.

We sort of absolve ourselves of more responsibility, because we handled the situation as best as we could in the moment. I was like, "That's not enough. Let's rewind 72 hours before your test, before 10am. Did you study well?" "No." "Did you eat healthy?" "No." "Did you sleep?" "No." "Did you pick fights with your brother?" "Yes." “Well, all of those things are in your control, and all of those things determine whether you're playing on easy mode, or you're playing on hard mode. It's a lot harder to think clearer, it's a lot harder to think objectively, it's a lot harder to manage those defaults and those urges if we're playing on hard mode.”

I give the example of my kid because I think it's something that everybody can really resonate with. In terms of, hey, I could have put myself in a better position for this. We do the same thing. We do it with sleep, we do it with exercise, we do it with food. Three of the things that I just talked about with my kids. If you go home, and you're tired, and you're hungry, or you ate all of this bad food for lunch, you're more likely to let these urges happen. The sort of defaults, the emotion, the ego, the social, the inertia. You're more likely to just let those things go and take control of you.

It's not that they're not going to happen. It's just that you can think of it as a scale. If I'm tired, and I haven't slept, and I really had a long day at work, and I'm angry because of traffic, and I get home. Well, man, anything is going to set me off in that moment. But there's things that I can do to put myself in a better position to make clear thinking easier.

Ben Felix: Man, you made me think of when I played basketball in university, I remember this big lightbulb moment when a coach explained what hard work is. I thought hard work was going on the floor, and rebounding, and running, and sprinting, and whatever. I didn't play well in the game. Afterwards, the coach is like, "You didn't work hard enough.” “What do you mean? I busted my butt." He's like, "How much time did you spend studying game tape yesterday? How much time did you spend studying personnel before the game?" I was like, "Uh-huh. Hard work isn't just what you do in the moment. It's what you do to prepare for the moment. Brilliant."

Shane Parrish: I think that's a great analogy. It reminded me of another one when I was playing high school football, something similar happened. We made it to the provincial finals. Our coach is like, "Hey, I need you to give me this week all your attention. No parties, no drinking, no nothing. I just need all your attention." He said, "If you don't, you're going to regret it for the rest of your life. If we lose, and you didn't give it your all, you're always going to have this, what if I had done more, I could have done more. But if you give it everything you got, you can just be proud and leave it on the field." Sure enough, we lost the game. The people still talk to some of these people today, and they're still holding on to some of this stuff, and this happened a long time ago.

This such is the case in life. We can do things to put ourselves in a better position. This is the counterintuitive insight about decision-making that I've learned from studying people that your listeners will be familiar with. Like Peter Kaufman, and many conversations with him, and Charlie Munger, and the same, Warren Buffett, they're never out of position. They're never forced by circumstance into doing something that they don't want to do. Look at Berkshire Hathaway right now. They have $150 billion on the balance sheet. The stock market goes up, the economy's great, they win. Nothing changes, they win. Everything implodes, they can play offense.

No matter what happens, no matter what happens in the environment, they're in control of their own fate. I think that we need to think about those things too. Everything's on easy mode for them. If you look back through history, like Carnegie and Rockefeller, and all of these people who've created these great companies, they've always done the same. They've always been in a position to play offense when everybody else is panicking for survival. I think that we can do something similar. We can apply that lesson to our lives. We can start preparing for the next promotion long before it even comes up. If I know I want to get promoted, what are the things I can do? What are the responsibilities I can take on? What are the activities and skills that I need to learn now? So that when that happens, it's inevitable that I'm the one promoted. I'm already ready for that job. It's like I was born for that job. Then everybody else looks on from the sidelines, and they're like, "Oh, that person was lucky." It's not luck. They did the work before it needed to be done, and they did it every day, and they did it consistently.

Cameron Passmore: Great answer. One of my favourite parts of your book was where you talked about, I think you call it the big four defaults, being the emotional default, ego default, social default, and inertia. This has been a great four-point thing that I've come back to several times in the past week, just in my day-to-day work. Can you talk quickly about each of those defaults, and how you can control them?

Shane Parrish: Yes. The defaults are basically situations that are likely to think for you, instead of you thinking in the moment. Alcoholics Anonymous has this thing called HALT, which is hungry, angry, lonely, and tired. You make your worst decisions in those moments. We are emotional, and emotion works both ways. We get angry, we tend to overreact, we get fearful, we tend not to do anything. That means fear is an example of we don't want to start something because we're scared that we'll fail. Often, we're actually scared that we'll succeed, which is very counterintuitive. But if you think about quitting smoking, or something, which is an example I use in the book about my parents. Being successful at quitting smoking was really scary for them. And everybody probably listening to this is going, "What?" But it meant changing all their friend groups, and changing their environment, because they couldn't be successful quitting smoking, unless they changed all their friend groups.

I've talked to many people who do personal training, it's the same thing. Ego, we tend to think that we are the center of the universe, and especially, if you work in a knowledge organization, or you pick stocks. It's like, your idea is the right idea. Anybody who opposes that idea. Once you've got this little idea in your head, you just tend to discount all of that information and what you're not doing. I have these three words, actually, I'll hold up this sticky because it's like on my monitor. It says, "Outcome over ego" and it just sits on my monitor. It's like, “How do I attach –” We all have an ego, we can't get rid of our ego, and nor do we want to. Our ego is our friend, it's also our enemy. The important thing is to recognize when it's your friend, and when it's your enemy.

I think what I tried to do is attach my ego to the outcome, how do I take pleasure in just getting the best result possible. I don't care whose idea it is. I don't care who gets the credit. I just really want to get to a certain place. If you think about that, there is that famous quote, and I'm going to butcher it. But it's like, you can go anywhere you want in the world as long as you don't care who gets the credit for it. S often, we want the credit for it. Why do we want to credit? Because that makes us feel good about ourselves.

This is a good tie-in to the fact that we're animals. What do I mean by that, we're animals. Well, we share a lot of biological instincts with every other animal. We're territorial, we're self-preserving, we're hierarchical, we're ritualistic. Every animal is all of these things. The difference between humans and all of these other animals is that we have the ability to reason before we react. Every other animal just reacts. But that reasoning is wasted if we don't know when to use it. In these situations, we don't tend to use it.

When somebody steps on our ego, and somebody makes us angry, we are territorial. We're not a dog pissing, or a wolf going around and marking its territory. Our territory is how we see ourselves. Our territory is our identity, how we want other people to see us. If you infringe on that, I am more likely to respond without reasoning. I react with that reasoning. Those are the moments, the ordinary moments that get us into trouble. We're social.

The third one is that we're social. We tend to do things because everybody else is doing the best practices by definition or average. If everybody is doing best practices, and you do what everybody else is doing, why would you expect to get different results than everybody else? There's comfort in that. If you're a beginner, getting up to speed, you want to copy best practices. You want to adapt, but so often, we just stop there. What we really want to do is create a positive deviation. That positive deviation is between where the best practice is and us. We want to imitate, and then innovate, and I think that we forget that part.

We have to learn when to like opt out best practices, and try something new. But going back to born in a tribe, we get along with people, this is how we evolved. Why do we do this? Well, part of being in a tribe is not rocking the boat. Part of being in the tribe is not trying something new, not making other people, not threatening the hierarchy that exists, not doing all of these things. Yet, there's moments when we have to get out of that. If we're not thinking, then we just go with the flow, and we expect different results than everybody else. When we don't get them, then all of a sudden, we're disappointed. We start sitting back and going – we become cynical. That's a great sign that this is happening.

You start thinking to yourself, the language that people tend to use in this is like, when is the world going to give me what I deserve? When are people going to recognize my potential? You're being passive, and you need to be in control, and you need to not be passive. You need to go out there and make that stuff happen. But these are moments where you think about that stuff. Inertia is another one. We stay in jobs that we don't want to be in for a long time. We stay in relationships we don't want to be in. That makes everything else in life harder, and it goes back to positioning again.

We don't tend to think about those things. We just sort of complain about them. It's hard for us to see those things because it's hard for anybody to fully appreciate the system that they're a part of. You have to change your perspective into it. Easiest way is to have a friend call you on it, "Oh, you're complaining about work again." Because your friend can see that, you might not be able to see it. This goes back to physics, and framing, and relativity and all of that where, I think we all learned the example in grade nine about holding a ball on the train, and the train is going 60 kilometres an hour. There's no curtains, or there's no blinds, so you can't see outside how fast is the ball moving. Well, if you're holding the ball on the train, it's not moving at all relative to you. But to somebody watching the train go by, it's moving at 60 kilometres an hour. It's the same as us.

I mean, we're a few blocks away, and how fast are we moving? We're not moving at all, yet we're moving 18,000 miles an hour around the sun right now. It depends on how you look into the problem. But the source of all mistakes and decision-making is blind spots, and how do we eliminate blind spots or reduce blind spots? We can probably never fully eliminate them, but we can dramatically reduce them by shifting our perspective into the problem, and taking a different lens into it.

Cameron Passmore: Fascinating. I'm glad you mentioned best practices. Because reading the book, I think you said best practices are average. However, your weekend email that we get is all about learning what other people have mastered to help us be better at what we do. What do you think in general about best practices as a decision-making tool?

Shane Parrish: I think you need to understand best practices. There's a saying that, “The young man knows the rule, the old man knows the exception.” I think that that's what you're looking for with best practices. Most people just get best practices and they continue in that lane, but you have to try something new if you want different results in other people. You have to be willing to look like an idiot. Again, that goes against our social default. We don't want to stand out, we don't want to look bad. If we're right, there's an asymmetric payoff.

I was talking with a friend who worked at an organization, he saved them $20 million with one of his initiatives. They give him a $2,000 bonus. He risked a lot. He risked a lot by doing something completely different than everybody else. He might have lost his job, because he took a big chance, and his upside was two grand. The payoffs don't make sense, and they don't make sense to us either. There's a lot of reputational payoffs. There's a limited upside and almost unlimited downside. We don't want to do this stuff. I think that we can be better than that.

I think the email that I sent on Sundays, is about inspiring people to be better. It's about timeless wisdom. I wouldn't say best practices based, but it's things that you can adapt and use in daily life and work.

Ben Felix: Sort of mini story you just told was about taking a risk? What role do you think self-confidence plays in thinking clearly?

Shane Parrish: Well, two things about taking risk. Going back to positioning, which is a counterintuitive way to think about decision-making. But the position you're in at the moment you take risk is going to make that risk, almost non-existent or really high. So if you are in a position where you can fail, where you can withstand pain, where you can go through the inevitable ups and downs, you're in a much better position than if you need everything to go just right when you take a risk. I think that that's one aspect to it.

The second aspect is you need the confidence to act in the face of that social dilemma. In terms of, what if I do fail? Can I withstand looking like an idiot? Can I do these things? What gives me the confidence to do that? There's earned confidence, there's honour and confidence, and then there's a different way to look at confidence. I'm going to give you all three. Earned confidence is, you're an expert, you've done the work, you know the exceptions, you know the ins and outs, you know the nuances.

Honour and confidence, you've sort of read a Wikipedia page, or a Google document, and you think, "I've got this figured out." The difference between those two is, basically, if you think of the difference between a chef, and me at home cooking. We can both get the recipe. If everything goes right, might even taste the same. But the minute something goes slightly wrong, the chef can just taste it, and they know instantly. "Oh, there's too much salt, you didn't use enough high heat. You started the wrong way. This oven's off, wasn't baking at the right temperature." They just instantly know because they've done the work. That's a good way to think about those two types of confidence.

The others, how do I have confidence about doing something that I've never done before? I think the example I give in the book is about cliff-jumping with my son. We were sort of on the lake, and this was about three or four years ago now. We climbed up the side of this mountain to jump off this cliff, and it's about 20, 25 feet. Before we get out of the boat, I was like, "Hey, if we go up, we can't come down. This is a one-way door here. The only way down is we jump or I have to throw you down. You can't climb down. It's way too dangerous. You fall climbing down, you're like dead. You go into the water the wrong way, you might break a bone, but you're not going to die." He's like, "Yes. Yes." All the confidence in the world. Then he gets up there, and he looks down, and he's like, "Whoa, I don't want to do this. I can't do this." He starts panicking is breathing changes. I'm like, "Oh gosh. How do I work through this? I've never done this before with somebody else."

I was like, "Okay. Let's step back from the edge for a second here. Let's get our breathing under control. First of all, get our physiological body response under control. Second of all, let's think about all the hard things that you've done that you've never done before. Well, you went snowboarding down a mountain before, but you'd never done that. You managed to go through a pandemic. Other people haven't gone through a pandemic. What are the things that you can come up with that you've done for the first time that you were scared of? I remember when you were two, you were scared of going down the slide, you were scared of walking, you were scared of all of these things. Yet, you've overcome all of these challenges, all of this adversity."

He starts building up that an internal monologue of, "I've done things for the first time. I don't necessarily need to be able to know that I can do it." I was like, "The other thing I want you to do is, you're looking at this the way a lot of adults look at it, and you're looking at it in a way that keeps you in place. I'm going to tell you this now, because this is what parents do, this is what adults do. They look at where they want to go, and they're like, 'I'm never going to get there. I'm never going to have – I don't have the confidence to get to the ultimate destination.'"

At this point, he's looking down, his confidence is like, "I don't have the confidence I can make it to the water." I was like, "We're not going to think like that. You're going to look out, and you're not going to look down. The only confidence you need is the next step. You don't need the confidence to make it to the bottom, you just need the confidence to take the next step. That next step is the one off the edge. Take a big step, but don't look down." Because the minute you look down, as adults, this is when we catch ourselves procrastinating, endlessly doing research. All of these things are just excuses not to start. We're thinking about, "If it's not perfect, I'm never going to be able to get there. I want to make it perfect before I start it." The world doesn't work that way. It's messy. It's full of false starts, mistakes, and all this mess.

If you're waiting for the confidence to get to the outcome, or build the company that's like $10 million a year in revenue, you're never going to have that confidence. The confidence comes from, "Can I start? Can I take the first step? What is the first step?" Action creates its own confidence. If you need confidence, most people go to inaction, reading, thinking, and talking, and they get all these rewards, and they confuse that with actually doing the confidence. Real confidence, earned confidence comes from doing, and comes from taking the first step. It can be a baby step, it doesn't matter. Just take the first step. To come back to the story, he looks out onto the horizon, takes the first step, and 25 seconds later, he's back up jumping off basically like going backwards.

Ben Felix: That's super cool. I bungee jumped one time, terrifying. But it made me think of the story you just told because it was exactly the same thing. It's like, okay, you're going to get up on the bridge, and you're going to go out on a little jumping platform, then you're looking out. The person's telling you, "Okay. If you don't jump on three, I'm going to push you." That's what they tell you, at least where I was. What's the next thing? So I jumped and you fall, and fly back up from the bungee cord, and fall back down. It's terrifying. I didn't do it again. But it was the same thing. One thing at a time.

Shane Parrish: I think I was interested in doing that until I watched this video once of that going wrong. I was like, "No."

Cameron Passmore: You talked about habits earlier, Shane. But how important to clear thinking are good habits?

Shane Parrish: Well, habits are neutral. If you think of a habit, it just reinforces what you put into it. It's almost like a thermos. Your habits are super important, because they almost become rituals into positioning yourself, into getting into the right environment, into doing the things that you want to do. Then I have the saying, which is, don't tell me your priorities, show me your calendar. If your habits align with where you're going, that's a great thing. If they don't align with where you're going, that's a bad thing.

How do we know if they do or don't? It's like, are you getting the results that you feel like you should be getting? If you're not, your habits tend to be part of that. What sort of habits get in the way of this? Well, there's eating, there's sleeping, there's drinking, these are all habits that people have that sort of lead to positioning. There's investing in your relationship, which is also a habit if you want to. I relate this to my kids in terms of like, "Well, are you studying? When are you studying? Is it ritualistic?" Because whenever you need discipline, or whenever you need willpower, you want to make it a ritual, so it requires less and less willpower, and eventually, just happens.

With my kids, it's like, they come home from school, they shower, they come downstairs, and they start studying. That's the ritual and it took about, I don't know, three weeks to a month to make that happen. My kids get a lot of homework. I like the fact that they get a lot of homework. I understand. Not every parent thinks that way. I think it's amazing. They get about 90 minutes a night. It was always this battle when they first started school, and the battle was basically like, "I don't feel like doing it now." I'm like, "I don't care what you feel like. It doesn't matter. Your homework needs to be done. Got to go to work. Some days, I don't feel like going to work. Everybody else does the same thing."

This is an important life skill for you to figure out, because I'm like, what really differentiates people in life is the best people do it when they don't feel like doing it. I'm going to show you how they do it when they don't feel like doing it through habits, through rituals, through sort of automatic rules. These rules will power you through when willpower fails you. I'm like, "We're just going to try this thing for a few weeks. Bear with me. I'm going to make sure that you get it because you're young." A that time, they were 12 and 11 when we started this. They come home, I was there every day after school when they got home. I'm like, "Okay. Go upstairs, shower. Here's a little snack." After school, you get this little time, and the time is the commuting time, and the time is sort of the shower time. Then you put your clothes away, and then you come downstairs and you sit down, and you get to work, and you do your homework. It required no willpower because they were still at an age where I could just tell them what to do. That is like a genius age for parents. I can't do that anymore. But we did this for like three weeks.

Then, I didn't go home one day. So I wasn't there when they got home, and it was totally intentional, and I was nearby. I sort of walked in around the time that they would have started studying. What do you know, they've showered, they're sitting down at the table, and they're studying. I was like, "This is brilliant." I was like, "How do you guys feel?" They're like, "Oh, we're just doing what we've done." So now, at this point, it's a habit. At this point, it's a ritual. This is what we do when we come home from school. What they're not doing is saying, "Should I do this now?" How do I have the willpower to do it when I don't feel like doing it? Well, you just do it.

Ben Felix: I have a strength and conditioning coach once. He would always say, that the days you don't feel like training are the days that you get better.

Shane Parrish: On-hundred percent. Let's make this real for adults, and turn it into something that we'll probably talk about later, but automatic rules for success. I used to work out two days a week, three days a week. I hate working out. I don't know about everybody else. Maybe some people are super motivated. It's a chore, man. I would have these days where I'd be like, "I'm tired. There's a lot of work to do." I start making these excuses, and these excuses became a negotiation with myself. Which is like, "Hey, I'm not going to work out today, but I'll do extra tomorrow." These are little lies that we tell ourselves. You're not going to do extra tomorrow, just FYI.

Tomorrow would come around, and I'd be like, "Yes. I really don't feel like going to the gym today either. Got a lot of stuff." You just sort of convinced yourself that what you're doing is the right thing. Then I was like, "This is crazy. I'm going to apply an automatic rule to this." The automatic rule, I'll come back to where the automatic rules came from in a second. But the automatic rule is. I'm going to sweat every day. I'm going to work out every day. The duration and the scope can change. But the fact that I work out, the fact that I sweat doesn't change at all. It is entirely successful. It's been life-changing to so many of my friends, my family who have taken this and made it a rule. It's so easy to follow. Let's go back to where rules come from.

I was with Daniel Kahneman and his penthouse in New York, and he was on the phone. He ended up getting to the end of the conversation, and he said, "My rule is that don't say yes on the phone. I'll get back to you tomorrow," and he hung up the phone. I was like, "Whoa, tell me about this. What is his rule?" He's like, “Oh, social pressure. I felt I always feel obligated to say yes to people. I never want to disappoint them.” But he's like, “What I've learned is that I end up doing things that I don't want to do to please other people." Who's the person that's least pleased by that? He is.

At the cost of making himself unhappy, he was making other people happy. He's like, "I also don't want to argue with people, and I don't want to be in a situation where I have to defend myself." When you say, "I can't make it that day." You might be being polite and sort of not super confrontational. "Oh. Well, we'll just make it another day." And it turns into this big discussion, this big argument. Now, all of a sudden, you're getting frustrated, they're trying to find a solution to something they don't think is a problem. They eventually get frustrated too, because they're sort of like solving the wrong problem.

He's like, "So I created this rule to get me out of this situation. My rule is this." He's like, "There's a weird thing about rule. People don't argue with them." I was like, "What other rules do you have?" He's like, "None." I was like, "This is the most powerful thing." I was like, "With all due respect, this is probably the most powerful thing you've come up with. Cognitive biases are amazing. but this should win you the Nobel Prize, because this is incredibly powerful. Why don't we use this all the time?"

I started playing around with this, and I started testing it with friends. I had one friend who was trying to eat healthier, but he was in sales roles, so he's always at the restaurants. He's relying on willpower, and eventually, everybody loses the battle with willpower. He gets to restaurants, it's late at night, after long days, lots of travel, he's away from his family. He's in an environment where he's around people who might be in their home city, but for them, they're outside of their environment. It's an excuse to drink, and eat, and do all these other things. He's like, "It's such a hard environment to be successful." I'm like, "Well if rules work anywhere, they should work here. Let's try it."

I was like, "We're going to create two rules around this. The two rules are, you don't eat dessert, and you always pick the healthiest thing on the menu." I'm like, "These are rules, you can't deviate from them. It doesn't matter what's on the menu, you just pick the healthiest thing, and you never have dessert. We'll skip the drinking part, we'll tackle that later." A few weeks later, he calls me up, and he's like, "This is life-changing." I was like, "What do you mean?" He's like, "Nobody argues with me about what I do, because I tell them this is my rule." He's like, "It doesn't matter how tired, or stressed, or anything that I am, I've now circumvented basically a lot of my emotion out of this. I've created this rule that hijacks my brain."

He's like, "I don't understand it." I was like, "Well, of course, because you've been taught to follow rules your whole life. You've just never been taught to create rules for yourself that work to your advantage." But nobody has to tell you to follow the speed limit every day, or to do your taxes the right way every day, or you're surrounded by all these rules. People tell you these rules once, and your brain just processes this in a way where it's like, "I can't argue with the rule, I follow the rule."

Well, we create our own rules, and the weird thing is we don't argue with the rules, and we don't think about the rules. These are so powerful, because they get us out of these situations where we would require thinking in order to do the right thing. If we go back to emotion, ego, social, inertia, situations where we're less likely to think. It's like, well, can we create rules or structure or an artificial environment that allows us to do the right thing, even when we're not at our best? The first thing you want to do is position yourself so you are at your best, so these have less of a pull on you. But if you're not at your best, how can you create friction? This is so powerful.

Anyway, long story short. Guy ends up losing a ton of weight. I tried it with another friend of mine, who I think you guys know, Brent Braser. He read an early copy of the book. We had a conversation, he implemented this. Literally, I get a text from him once a month going, "I've never been healthier. This has changed my life. I am so grateful to you." He is an amazing person and he was doing the exact same thing I was doing. He was negotiating with himself about working out. Now, he's like, "I sweat every day.” Every single marker — it's so amazing to see this in action, and how powerful it can be.

These are examples of rules that I've used, or friends have used and tested. But really, the big benefit to this is you can create your own rules. When you're in these social situations, and you're like. "My rule is, I don't eat dessert." People might say something once, but if you say the same thing the next time, they won't push back on you, and you don't push back on yourself.

Cameron Passmore: You're absolutely right, Shane.

Ben Felix: Yes, it's so good. I've got the same rule, sweat every day. I got that from Lululemon's founder years ago. That's one of his mantras, sweat every day. Chip Wilson, I think. I've got a rule for not drinking. But what you said about social pressure. When it's a rule, when you just tell people, "I don't drink as a rule," that's it. The conversation is over. Whereas, "No, I'm not drinking tonight." "Oh, come on, just have a beer." It's a completely different conversation.

Shane Parrish: Not drinking tonight turns into a willpower thing, a stubbornness thing. The social part of you undermines all of that, because you're like, "Oh, it's just easier to have a drink." Then, all of a sudden, wondering turns into three. I have a rule when I give talks, and then I go to conferences, which is, "I don't drink past nine. Nothing good happens past nine with people you don't know." Nobody argues with it. It's really funny. It's just sort of this thing where I'm like, "Hey, my role is I don't drink past nine.” So I'll have a drink at dinner, and then, you know, I'm done. In that way, I can sort of like get the social aspect of it. That comes with that camaraderie that people have around alcohol for some really strange reason. Then on the flip side, I end up with none of the trouble that sort of comes from that because it's like, “This is just not going to go anywhere."

Cameron Passmore: You mentioned problem-solving. I'm guessing Randall Stutman, who were both big fans of his work has something to do with your thoughts on this. But how important is spending time on defining the problem before solving a problem?

Shane Parrish: Randall is one of my favourite people, and that man is a genius. We had a conversation a few years ago. I was doing this at work, but I think he explained to me why it works. Did you ever do something and you're not quite sure why it works? His level of insight was like, "Well, here's why what you're doing works." I hit on this a long time ago at work, because one of my old mentors said to do this as well. I don't know if he'd ever heard of Randall or get the idea from him, but good things sort of like triangulate. I was separating problem definition from problem solution because what I found was, people would solve the wrong problem. My only thing that I was trying to do is like, "How do we solve the right problem?"

Randall explained to me that the separation, again, this is the use of an artificial environment. You're creating constraints, you're using those constraints to avoid pitfalls, and those pitfalls get people in trouble. Randall said, "Well, here's what happens when you have a bunch of smart people, and you go into a meeting to solve a problem. Well, the ego comes out, somebody says something plausible that sounds like it is the problem. It's like a reasonable approach to the problem. Then, everybody jumps into problem-solving the problem solution mode. Then, before you know it, you end up solving the wrong problem. All the energy you spend solving this wrong problem comes at the expense of solving the right problem.”

I was like, I never really understood what was going on until Randall told me that. I was like, I think I hit on the right thing to do, and it was very successful. But I had no idea why it worked. I was the line cook. I was that cook at home who followed the recipe and was like, "This turned out amazing. I have no idea why all these flavours were together, but they do. So let's make this again." He's like, "What you really need to do is take that hour-long meeting and break it into two half-hour meetings and space it out over a day or two. You're not only going to get a better problem definition. You're going to get closer to the actual problem.” You're really going to allow a lot of people in the meeting –

Because remember, if we go back to the source of all bad decisions as blind spots, which comes from Peter Kaufman. You're going to get the people who don't want to contribute on the spot, or the people who need to think a little bit more about the problem. They're going to contribute now too, because they're going to go back, and they're going to email you the next morning, or the next night. Or if they're going to go for a walk, and they're going to think better on their way home, and they're going to have a unique insight in this problem that you didn't see. That unique insight is going to be important.

Then the other thing that Randall sort of hit home for me was the person who makes the decision, A, should be a person, never a committee, should be responsible for defining the problem. Never let anybody else define the problem for you if you are responsible for the solution. Everybody can provide input into the problem, everybody can provide a unique perspective into it, but you're the one responsible for actually defining what the problem is, and you should own that. When you own it, you have accountability around it.

Then another way to get better information or to people while we're on the topic of meetings that a lot of people find super useful. You know how everybody shows up, and they've sort of like, there's maybe this three-page document to read for the meeting background information on the problem. Everybody goes in, and they just basically paraphrase the exact same thing. What are they doing in that moment? Well, they're signalling to other people that I have done the work, I deserve to be in the room. But they're all saying the exact same thing. They're saying the thing that is in the document, that everybody by definition who's in the room should know.

If you're the leader of this meeting, or you're the person responsible for defining the problem in the context of this or any meeting that you lead, you have to change the signalling value from signalling that you've read it to signalling unique insight into the problem. One way to do that is, what do you know about this problem that nobody else in the room knows about it? What am I doing there? I'm shifting my perspective, and I'm giving you a social reward, or a status reward. If you want to talk, if you want to have input, you need to tell me something unique, you need to tell me something valuable.

Now, all of a sudden, their meetings are a lot more productive, because the information we're talking about is a lot better. We can assume that everybody's read the document. If they haven't, they shouldn't be in the room. I mean, that's a different problem to solve.

Cameron Passmore: I have a separate question for you, I'm curious. Because in the book you talked about that you value time over money. How did you determine that?

Shane Parrish: If you talk to anybody near the end of their life, they would give up all the money that they have for more time. Time is this weird thing, you can't see it, you can't feel it. I mean, once it's spent, it's gone. You can sort of buy time in the sense that you spend money to get time, or you might be able to get a little slightly better medical care, and maybe extend your life, but you can't really get more time, but you can get more money. Money becomes leverageable, time doesn't. Time is leverageable in order to make money. But at the end of the day, if you're 90, and you have $10 million in your bank account, and you're about to die, you deploy all of that money for an extra week of life. An extra week with your great-grandkids, an extra week with your kids. You would give all that money away in a heartbeat.

When I thought about that, and then I looked at things that I was doing with money. What is it I really want money to do for me? Why do I want this money? What is important? Of course, there's like Maslow's hierarchy of needs, and you have these basic standards. But what do I really value? Well, I value time. I value somebody else doing these things. So when I make money, I want somebody else to do these things that I don't want to do. Why? Because that allows me to do more of what I do want to do, whether it's take a nap, whether it's go to work, whether it's go for a walk, it doesn't really matter. When I looked at why I was working, and what I was trying to accomplish, I was really just trying to buy time. That was ultimately sort of why I left the intelligence agency. I wanted more control and more freedom over my time.

Ben Felix: A really good answer to that question. That's something that we think about a lot in the relationship between time and money, and how to make those trade-offs.

Shane Parrish: Well, if you look at this sort of happiest, wealthy people, and I preface that with happiest, because a lot of rich people are not happy. Wealth includes happiness, by my definition. There's a difference between rich and wealthy. Wealthy includes health, and relationships, and happiness, and all these other things. Whereas rich is just money. If you look at the happiest, wealthy people that I know, most of them spend money on things they don't want to do, and they have other people doing those things for them. That makes them happy.

I think that there's a really good lesson in that, which is, if you don't like mowing your grass and you have millions of dollars in the bank, then why are you doing that? You could be playing with your kids, you could be out for a walk with your partner or your spouse, you can be having a nap, it doesn't really matter what you're doing. It just matters that why aren't you using that money to get more time.

Ben Felix: We had a guest a while ago, Ashley Whillans, who talked about her research on this, on how people who prefer time over money are, generally speaking, happier people.

Shane Parrish: Totally. When you think about it in reality, for anybody who works on an hourly wage, every minute, they're sort of buying their own time. They're not doing it because they could be making more money. If you think of any entrepreneur, it's the exact same thing. This sort of dawned on me as well, which is, the curse of the entrepreneur, if you will, is that your brain never shuts off, you can always be doing more. There's nobody else responsible other than you to make all of that happen. How do you reconcile that with like, "I have to go home and I have to be there for my partner, there for my kids, and doing all these things."

On the flip side you're like, "I'm giving up all of this, the opportunity by doing that." These things are real struggles for people and they're important trade-offs to think about. But when I think about the things that are important to me, it's like a really short commute to work. I don't want to spend a lot of time in my car personally. What does that mean? Well, it means I spend more on housing. Well, I'm okay with that. I'm okay spending more money on housing, because what am I doing? I'm buying my time. How am I buying my time? Buying my time in the sense that my commute is five minutes and not 45 minutes. In Ottawa, it's probably like 60 now. It's crazy here.

Ben Felix: Great topic to talk about, especially on a podcast about decision-making. Speaking of which, your podcast is incredible, first of all, and you do a great job curating content for people who want to understand, I think, as you say, the best of what other people have already figured out. We try and do something similar for financial decision-making. How do you think people can curate the information that is best for them?

Shane Parrish: Sherlock Holmes had this thing about this sort of memory attic. The furniture you put up there as the furniture, you're going to move around. If you think about this in terms of information, and who you follow, and what you're consuming. The quality of the information you consume is going to be the quality of your future thoughts. So you can't put junk food in your head and expect to have unique, penetrating, timeless insights, you're going to have junk. The worst part of you is going to get reinforced. If you just need to see this, go look at your reels on Instagram, and watch how you sort of get manipulated into consuming your time. The world looking like you think it should look, not the way that it is. Looks very much like whatever you've signalled you like before through what Simon likes.

The way that I think about this is one of the most important environments that you have to curate your physical environment, your mental environment. We don't think of our mental environment. And our mental environment is who we hang out with, who we spend time with, who do we admire, who do we want to be like, or parts of us want to be like them or parts of us want to be like parts of the, who are we listening to, who's got space in our head, who's got free access to us. What does that look like? Are we getting high-quality – not information we agree with – that's not what I'm talking about. Are we getting high-quality signal into our head? Is that information curated?

Curated means, it's not just there by default. When you sign on to Instagram, or you sign on to Twitter, it's like follow these accounts by default. No, don't do that. You need to be careful about every person that has access to your inbox, every person that has access to your thoughts. Think about reading a book. There's a big difference between reading a book by a journalist and reading a book by a practitioner. What is the difference? It's the quality of information in the book. The journalist tends to be a high level, these lessons that sound good, and maybe they're useful for you in the context of what you're doing. But the practitioner tends to have, here's all these little stories, and all these little nuances, and all the ways this goes wrong.

Well, which do you think is more dense? Which do you think is better for your brain to reflect on? Because what you're going to do is you're going to take all these thoughts, and you're going to eventually reflect on them, and try to make sense of something, and try to make sense of the world. And you want all of these things to be high-quality information, not low-quality information. You can't put junk food into your body and expect to be healthy. The same thing goes for your mind and your brain.

Cameron Passmore: You talked about that in your book, referencing a number of people that have had a high-quality signal influence on your life. So much so that you said you can't even identify where their credit goes anymore because it's pervasive in your brain. Can you perhaps talk about a few of these people?

Shane Parrish: Totally. Just before I get into that, because this sounds weird to people, and I've had more than a few people pointed out these comments. It's like, when you take an idea, and you make it yours, and by making it yours, I mean, like Cameron, you could have come up with the idea, but I start practicing it. Then 10 years goes by, well, it's my idea. I no longer remember that it came from you, but it totally came from you. So I will point out, none of the ideas in the book come from me. They're all from other people. These insights belong to other people. If I've done anything, it's just sort of combined them in perhaps maybe a unique way that resonates with people.

There's been so many people in my life who've influenced me and how I think about things from my parents, to Peter Kaufman, to Charlie Munger, to Randall Stutman, to Kat Cole, to Mike Lombardi, to Warren Buffett, to Todd Combs. There's so many people that I've taken little bits and pieces from, and I've used that, and I've tried it, and I've refined it, and I've synthesized it, reflected on it, and made it my own. In the words of Mon Tang, I've taken the best of what other people have figured out, and I've sort of digested it, and chewed on it, and made it my own. In making it my own, it becomes part of me and who I am. But that doesn't mean that it started that way.

Cameron Passmore: Final question, Shane. How do you define success in your life?

Shane Parrish: Oh, man. Right now, success is time freedom, and being useful. When I say being useful, it's sort of time freedom to me being useful to other people, and making the world a better place. One of the ways that I want to make the world a better place is through being useful to other people, and helping them become the best versions of themselves. Time freedom is that I can say no to everything that I don't want to do. I'm never feel obligated into doing something. I control my own sort of destiny, if you will, and passively stable on that front. Those are sort of like my internal sense of success, my external success. Then as a parent, obviously, I want to spend all the time I can with my kids, and be the best father that I can possibly be.

Cameron Passmore: Great answer. The book is Clear Thinking: Turning Ordinary Moments into Extraordinary Results. Go buy it. It's a great book. Shane, this conversation made that book better. It's fantastic. Thanks for joining us.

Shane Parrish: Thanks, Cameron. Thanks, Ben.

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