People Dumber Than You Are Making Millions​

read time 12 minutes

So 12 years ago I’m working at a climbing gym making minimum wage when one day this guy walks in…

He’s dressed head-to-toe in black, every inch of exposed skin is covered in tattoos, and he’s got this gigantic beard. He’s this weird blend between punk rock skater and motorcycle gang biker dude.

We get to chatting and he tells me about his life…

How he dropped out of school, hasn’t had a job in years, and just spends all of his time traveling the world on one random ass adventure after another like hiking the John Muir Trail, biking across the country, or surfing down in Bali.

And I’m sitting here scratching my head, ‘cause at this point, I’m 28 years old living out of a van and I’ve got $80,000 of debt… so I’m trying to figure out how the hell THIS guy is affording this crazy carefree life.

My initial instinct was to think he was either a drug dealer or doing something stupid by just financing his life with a credit card and racking up massive debt.

But turns out on both accounts, I was wrong…

This dude owned 5 apartment buildings, ran a shop where he fixed and flipped old Harleys he picked up on CraigsList, and he built a recording studio for musicians in his garage.

He was the first true-bred entrepreneur I ever met.

And I remember thinking:

What the hell is his secret? What makes him so special?

Because as he himself was quick to point out, he wasn’t particularly smart. In fact, on the bell curve of intelligence, he was probably smack dab in the middle.

And this kind of threw me off, because I guess I always had this belief in the back of my mind that said you had to be smart to make big money.

But over the years as I’ve met more and more successful people, I’ve come to realize this guy isn’t the exception.

The truth is, the richest people in the world aren’t any smarter than you or me.

In fact a study out of Sweden called The plateauing of cognitive ability among top earners confirms this. They found that there’s actually a drop in cognitive abilities corresponding to the top 5% of earners.

So, in this video, I’m going to break down why exactly that is… why people (like me) who are most likely dumber than you are making millions.

And to do that, we’ll unpack the four limiting beliefs that keep smart people from getting rich and at the end of the video, I’m gonna share The Secret of Success that I learned after having lunch with a billionaire.

Alright, so here’s the first limiting belief:

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I don’t care about money…

Listen, our society has a very problematic relationship with money.

On the one hand, it’s often used to signal status because we as a culture mistakenly equate status with value.

This is why Keeping Up With The Joneses is such a damn problem… You might not really care about getting that new fancy car, but if the neighbors have one then that means they have more status and therefore they must be more valuable to society, right?

No, of course not… saying it outloud just draws attention to how stupid that sounds. The truth is, it doesn’t really matter. These things signal status, but they don’t actually make you more valuable.

And deep down we all understand this…and so a lot of people just do what I did and they decide the game is broken and stupid and they stop playing all together.

Because after-all, the only people who care about money are shallow, greedy, and materialistic, right?

Well, no… it’s actually wrong, but believing this gives you permission to not even try.

But the result of this mindset for me at least was that my life really sucked and I had no way of providing for myself, my family, or my community. Which made me feel terrible about myself ‘cause I felt like a drain on everybody around me.

And it was around this time that I realized a fundamental truth:

You can’t actually opt out of the money game.

Like it or not, you NEED money to survive.

So the real question isn’t whether or not you’re gonna play the money game, but HOW are you going to play the money game?

Truly, answering this question in a way that transformed my pursuit of money into something greater than just a desire for status or material things was the key to unlocking my earning potential.

I encourage you to ask yourself:

If you weren’t limited by money, what impact could you have on the world?

Now, the only way to not be limited by money, is to win the money game for yourself, and you can define what winning looks like in whatever way you want, but for me I define it as getting to the point in your financial journey where money is no longer the limiting factor in any of the decisions you make.

Now, regardless of how you define winning and how you decide you’re going to play the money game, one thing is universal:

To win, you’re gonna have to put yourself out there. You’re gonna have to get in the arena and you’re gonna have to actually try.

This might sound obvious, but most people won’t do it because of the second limiting belief that keeps smart people from winning the money game is:

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I’m afraid of looking stupid…

One of the reasons dumb people have an advantage when it comes to making money is because everybody underestimates them.

They think:

“Oh, that guy is dumber than a box of rocks. He’s never gonna amount to anything. He’d be lucky to get a job at the 7-11.”

Now, two interesting things happens when people underestimate you:

First, it puts a chip on your shoulder to prove everybody wrong. And that can be a powerful motivator.

Second, it frees you up to try anything. ‘Cause who cares if you fail, people are already writing you off. I mean, what do you really got to lose?

It’s great to be the underdog. Nobody expects you to win. You’ve got nothing but upside.

Smart people, on the other hand… well, they have the opposite problem.

They have nothing but downside because everybody expects them to be wildly successful in everything they do.

Which is obviously impossible, but smart-people are now in a no-win situation because if they try something crazy and it fails, then their very identity as a smart person is at risk.. So the only smart move that protects this identity is the well-trodden path that everybody else is following.

Go to school, get a job, bust your ass for 40 years, and then retire.

And don’t get me wrong, this can provide a great life which is absolutely the right choice for most people, but if you want to get rich you can’t follow common wisdom and expect to get uncommon results.

You have to do something different…

Now, the problem with doing something different is that most people perceive it to be risky.

But what even is risk? How do we define it? How do we measure it?

You might look at the guy climbing a cliff and think he’s a reckless daredevil… whereas he might look at you speeding down the freeway in traffic and think you’re an insane adrenaline junky.

Truth is… You’re both crazy risk takers… we all are. There’s no way of navigating this thing called life without taking risk.

But something I’ve come to notice is that dumb people tend to underestimate risk whereas smart people tend to overestimate it.

And this leads to the third limiting belief that holds smart people back from making millions:

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It’s too risky…

Now, don’t get me wrong…

The ability to run simulations in our mind to predict what may or may not happen in the future (and then plan accordingly) is the perennial superpower that separates humans from the animals.

But there’s a problem with this superpower…

It tends to skew towards pessimism.

Which makes sense if you think about this from an evolutionary perspective. Our ancestors were the ones who survived long enough to pass on their genes.

And one of the great survival mechanisms when you’re out on the Savannah is to assume pretty much everything is trying to kill you.

If you hear something rustling in the weeds, you should probably assume it’s a tiger and run away because if you’re wrong, you just look silly running away from the breeze… but if you’re right, then you ain’t dead.

So all that’s to say, we’ve evolved to always assume the worst case scenario.

Now, historically, intelligence was a great attribute in surviving out in the wilderness because the smartest people amongst us were the most capable of calculating all the things that could potentially go wrong.

Therefore, they were more likely to survive because they were better at avoiding taking risks that could get them killed.

All told, this strategy has kept our species alive for millennia, so I’m not gonna knock it…

But it’s important to recognize that the game has changed over the past century as we’ve modernized as a society and the number of existential threats we face on a daily basis is practically zero compared to our ancestors.

These days the punishment for taking risks and guessing wrong is far less severe. Maybe you lose some money, some status, maybe you live in the back of a van for a bit and have to start over.

Ultimately, taking risks to make money (assuming you’re not doing anything illegal) is unlikely to end in the type of catastrophic ruin that you can’t recover from.

Which is why dumb people have an advantage when it comes to making money these days because often they’re just ignorant of all the things that could go wrong.

Whereas smart people can see it all so clearly in their mind and this stops them from ever even getting in the game.

I call this The Curse of Intelligence, which I’ll explain more in just a second, but before I do, it’s important that you understand something…

You’re probably very good at imagining all the things that can go wrong… but studies show that humans are quite bad at calculating the probability of those events actually occurring.

I mean, how much time have you spent thinking about Worst Case Scenarios that never came to fruition?

My guess is… it’s a lot.

Because the thing is:

Worst Case Scenario almost never actually happens.

So we spend all this time worrying about things that are unlikely to happen… but even worse, we allow our fear of this downside to stop us from taking the actions which would, in all likelihood, lead to an amazing positive outcome.

I used to really struggle with this, but here’s a simple reframe that helped me get out of my own head when it comes to calculating risk. It’s just to remind myself that:

The risk of mediocrity is greater than the risk of failure.

Okay, so this is just one aspect of The Curse of Intelligence, but there’s another side to it which ties into the the fourth limiting belief keeping smart people from making money:

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I don’t know what I don’t know…

One of the greatest ironies in the world is something called The Dunning-Kruger Effect.

This cognitive bias has two interesting aspects:

First, people with low competence in a particular domain tend to overestimate their abilities whereas people with high competence in a particular domain tend to underestimate their abilities.

Understanding why this occurs is actually quite fascinating, so let’s break it down real quick so we can recognize this bias in ourselves and hopefully eliminate it.

One of my favorite learning models is called The Four Stages of Competence. It breaks down like this:

The first stage of learning is Unconscious Incompetence, where you don’t even really understand just how bad you are at the thing quite yet. You’re effectively ignorant.

The majority of us will stay in this phase on most topics for our entire lives (and not even realize it).

But if you stick with it and continue improving, you’ll soon move into the second stage which is Conscious Incompetence, which is another way of saying you’re starting to see the full breadth and depth of the topic. Now you know enough to realize just how little you actually know.

With enough effort over a long enough period of time, you can make it out of this phase and jump to the next level of Conscious Competence.

Now you possess the knowledge and experience required to competently execute this skill, but the interesting thing about this phase is that it requires your conscious intent.

For instance, you might be a fantastic guitar player, but it still requires your focused attention. You can’t just turn off your brain and execute like a true master can because you haven’t progressed to the final stage of learning which is Unconscious Competence.

We call this level Mastery because you can now execute the skill at the highest levels without even thinking about it.

You will likely only ascend to this level in a handful of skills over the course of your entire life because the amount of work it requires to attain true Mastery is enormous.

Now, the mistake a lot of us make (which gives life to the Dunning-Kruger Effect) is that when we’re in the lowest levels of Unconscious Incompetence (that is, we don’t even know what we don’t know) we’re most likely to overestimate our capacity and think we’re better than we are.

Whereas, once you’re in the middle two phases of Conscious Incompetence and Conscious Competence, we tend to underestimate our abilities only because now we’re starting to see what true mastery looks like in that domain and we realize we’re nowhere near that level.

So let’s bring this full-circle…

The reason smart people struggle to make money is because they get hung up on the fact that they know they don’t know everything.

For instance, if you’ve been working as an accountant in a Fortune 500 company for the last decade, you have a breadth of domain experience that could easily be translated into starting your own profitable accounting firm…

But you’re likely to get hung up on the massive discrepancy between your domain expertise and your general knowledge of what it takes to run a business and therefore decide not to take action.

The dumb person, by comparison, might not have your accounting skills or experience… and so there’s not a very big gap between that and their general business knowledge which might lead them to conclude that starting their own accounting practice will be easier than it actually will be…

As a result, dumb people tend to take action and get in the game… and because things rarely play out as badly as we think they will, more often than not, they stumble onto success.

And if you walk away from this video having learned only one thing, let it be this…

I call it:

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The Secret of Success

Now, I stumbled upon this secret a couple years ago after meeting my very first billionaire.

And for whatever reason, I guess I just had it in my head that billionaires probably had this business thing all figured out and that they were operating on a higher level than the rest of us lowly entrepreneurs.

But I remember leaving that meeting with only one thought… it was this:

Holy shit… this guy had no clue what he was doing. He was just too stupid to quit.

And when I say stupid, I mean he overestimated his abilities, he didn’t fully understand all the things that could go wrong and why his plan shouldn’t work, and he didn’t realize that after years of hitting his head against the wall and things just weren’t working out that he should probably just pack it up, go home, and get a job that actually pays the bills…

And yet he didn’t give up…

He didn’t stop believing he could make it work despite the fact that to everybody… to his friends.. To His family… he looked like an idiot.

He looked like an idiot right up until the day things started to finally work… and on that day, after years of struggle, he suddenly looked like a genius.

I share this with you because on my personal journey I’ve learned this powerful lesson that:

You can’t win if you don’t start… and you can’t lose if you don’t quit.

And whether you’re smart, or you’re dumb…

In that simple concept is everything you need to know about finding success in life.

So I encourage you to get started, don’t stop, and I’ll see you in the next newsletter.

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