Tools of Titans

A friend recently asked me why I write every week.  Her point was that it must take up a lot of time (it does) and surely if I dropped to once every two weeks or monthly I would create time to build my business quicker (it’s growing quite quickly already).

I thought about this.

I didn’t really have a good answer.  All I could say was ‘I’ve started and now I can’t stop.’

Last night in a panic about what I would write about this week I picked up ‘Tools of Titans’ by Tim Ferriss – it has been on my bookshelf for at least a year, and I had never opened it.  It’s a weighty book (now that I have opened it I can confirm it’s almost 700 pages long) – I was waiting for the right trip to take it on when I could immerse myself in it. 

I wish I had opened it earlier.  I had no idea what was inside.  I have probably listened to a dozen of Tim’s podcasts (there are hundreds) and loved every one.  Tools of Titans is a book full of his notes from his conversations with these people. Extraordinary people.  “Billionaires, Icons and World-Class Performers.” He calls it a “toolkit for changing your life.”  It is a book you can jump in and out of, from one chapter to the next.  It’s certainly not one you need to read cover to cover.

It didn’t help me with what to write as my mind went from idea to idea as I turned the pages.  There are so many valuable quotes and lessons in this book.

One page jumped out at me, because it’s something I have been thinking about recently. 

Losers have goals.  Winners have systems.”  Scott Adams.

Tim’s bio of Scott Adams:

“Scott Adams is the creator of the Dilbert comic strip, which has been published in 10 languages in more than 2,000 newspapers in 57 countries.  He is the best-selling author of How to Fail at Almost Everything and Still Win Big, God’s Debris, and The Dilbert Principle.”

Tim explains that “systems” can be thought of as asking yourself, “What persistent skills or relationships can I develop?” versus “What short-term goal can I achieve?”  The former has a ‘potent snowball effect’ (like compound-interest) while the latter is binary – you win or you lose, you pass or you fail.  The problem with a binary outcome is that it’s very easy to quit if you achieve your goal or don’t achieve your goal.  Just look at how many people gain back all the weight (and more) after setting themselves a goal of losing 10 pounds.  I hit the goal, so I can eat the cake! 


Tim quotes Scott:

“When I first started blogging, my future wife often asked about what my goal was.  The blogging seemed to double my workload while promising a 5% higher income that didn’t make any real difference in my life.  It seemed a silly use of time.  I tried explaining that blogging was a system, not a goal.  But I never did a good job of it.  I’ll try again here.  Writing is a skill that require practice.  So the first part of my system involves practicing on a regular basis.  I didn’t know what I was practicing for, exactly, and that’s what makes it a system and not a goal.”

Had I read this chapter before being asked the question, I would have had a better answer than ‘I’ve started and now I can’t stop.

It’s a system I have built around not just my business, but my life.  It’s a discipline.  It’s a habit.  It’s a snowball that I have started and whatever I do, I can’t stop.  (I really can’t now that I have written it).

Here is how this is related to money.

One of the great financial writers, Morgan Housel, says ‘successful money management isn’t about what you know, it’s about how you behave and behaviour is hard to teach even to really smart people.’  It’s a quote I have repeated many times.

Systems help create good behaviour – they are about processes, routines and habits.  They are important in all aspects of life, but particularly in personal money management and the building of wealth.

There are so many things that we can’t control when it comes to our money – interest rates, inflation, what the stock market does – but having good systems in place enables us to focus on the things we can control rather than the things we can’t.  A good system rapidly increases the chance of long-term success.

Saving money needs a system around it.  It’s no good telling yourself you will save what is left at the end of each month or year.  We all know where that goes.  Saving must be a discipline or a habit.

The same goes for investing.  You need a system or a process that determines how you invest.  A simple system such as ‘dollar cost average into low-cost index funds’ will most likely beat even the greatest mind.

A good system incorporates some slack.  As Seth Godin recently wrote “systems with slack are more resilient.  The few extra minutes of time aren’t wasted, the same way that a bike helmet isn’t wasted if you don’t have a crash today. That buffer will save the day, sooner or later.”

Slack in your personal finance systems includes things like a high savings rate, low fixed expenses, a healthy cash balance, no high-interest rate debt, low levels of mortgage debt.  This slack ensures the system doesn’t fail when we hit bumps in the road.

“Losers have goals.  Winners have systems.”  My goal of writing every week has now turned into a system, and in that respect I am winning.

Goals can provide direction and even push you forward in the short-term, but eventually a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.
— James Clear, Author of Atomic Habits