Rules for Better Thinking, How to Reduce Blind Spots, & More | Shane Parrish | The Tim Ferriss Show

1. 0:00 – 0:14

   Intro

   1. TFTim Ferriss0:00

      [upbeat music]

2. 0:14 – 5:39

   The Stopwatch Gang influences a D student.

   1. TFTim Ferriss0:15

      So Shane, there are a million and one places we could start. [bell dings] So my understanding is you were a straight D student till grade 10, if I'm getting that right?

   2. SPShane Parrish0:24

      Yeah.

   3. TFTim Ferriss0:24

      And maybe this is a, a segue, maybe it isn't, but why was the book The Stopwatch Gang important to you? And could you provide some context for how that appeared in your life?

   4. SPShane Parrish0:37

      So my parents were in the military. I lived with my mom and my stepfather. My biological father lived somewhere else. And we moved every year, so every year I had a new school. I think the first school that I went to two years in a row was grade 10 and 11, to put things-

   5. TFTim Ferriss0:52

      Hmm

   6. SPShane Parrish0:52

      ... in context. Same school, two years in a row. For grade eight, I decided I was gonna live with my biological father. So I moved across the country, lived with him, and for various reasons, this was a disaster. [laughs] You know, somebody who really didn't have a lot of experience parenting me growing up all of a sudden has a teenager. My stepmother all of a sudden inheriting a teenager, living in the middle of nowhere. I'm already a borderline delinquent. I almost got kicked out of school in grade seven for skipping school. Like, I skipped school for, like, seven or eight weeks.

   7. TFTim Ferriss1:32

      [laughs]

   8. SPShane Parrish1:33

      I had to go see a child psychologist to make sure, as a condition of not being expelled, that I was like, there was nothing seriously wrong with me. And so in grade eight, I just started getting in more and more trouble. I started hanging around the wrong people. Like, your, your environment sort of determines your behavior a lot. Not only your physical environment, but the people you surround yourself with. And you know, it's just this slow escalation and, you know, if somebody said, "Hey, you're gonna go break into somebody's house", you'd never do it. But if you start with vandalism, and you start staying out late, and you start, like, doing things that you're not supposed to, all of a sudden vandalism or breaking into a house is, like, the next logical step. So we're doing this book report for grade eight, and I go to the library and I'm like not interested in reading. I'm not even interested in doing my schoolwork at all. And I just happened to land in this true crime section at this elementary school, which is like four books long, and there's one book called The Stopwatch Gang, and I was like, "What's this about?" And I pick it up, and it's about a bunch of bank robbers. And I was like, "Oh, this is, this is awesome. Like, this is my kinda book. Why has nobody shown me that you can, like, read about this stuff?" So I get home and I'm, like, reading this book, and a few days later my friends, like, knock on the door. And we all had, like, dirt bikes, so we're all, like, you know, living on 20 acres. You're commuting by dirt bike to your friend's house.

   9. TFTim Ferriss2:53

      And where are you at this point in time?

   10. SPShane Parrish2:55

       This is in Carp, Ontario, Canada.

   11. TFTim Ferriss2:58

       Got it. Okay. Just to place it for people.

   12. SPShane Parrish3:00

       Yeah. [laughs] So they knock on the door and they're like, "Come out with us, and, you know, let's, let's have some fun." And I was, like, one chapter away from the end, and I don't know, you've probably read a really good book-

   13. TFTim Ferriss3:12

       Mm

   14. SPShane Parrish3:12

       ... and you want nothing to, like, interrupt you in that moment.

   15. TFTim Ferriss3:15

       Mm-hmm.

   16. SPShane Parrish3:16

       You're like, "No," like, "The world doesn't exist. I need to finish this book. There's nothing more important." So I, like, lied, because if I told them I was reading a book that would go over like a lead balloon. But I was like, "You know, I'm not really feeling that well tonight. I'm gonna stay in. I'm sorry about that." And so they go out and they end up breaking into somebody's house.

   17. TFTim Ferriss3:34

       Hmm.

   18. SPShane Parrish3:35

       And getting caught, and a whole bunch of bad things happened as a result of that. And if I was there, I probably would've been doing that with them. But luckily I wasn't there. I didn't do that with them. I found out about what happened. And this is a chance event. This wasn't me, like, thinking about anything and saying no to this thing. It was just pure 100% luck. But I sort of got a little bit scared straight after that. Not in terms of, like, I'm gonna devote myself to schoolwork and, like, [laughs] get better grades, but straight in the sense of I don't wanna do this. I don't wanna get into this trouble. And then from that moment on, books sort of became an outlet for me to live in an imaginary world and to escape the world I was actually in, and to sort of be part of something else. Have you ever had a book do that to you where you're like-

   19. TFTim Ferriss4:22

       Oh, for sure. Oh, no. I literally, yesterday, this is not something I should probably advertise broadly, I'm not proud of it, but I was listening to the second of three books in this trilogy by Joe Abercrombie, and I had six minutes left in this very, very good chapter. And my mom had arrived a little bit early to go to dinner, and so I was banking on having that extra time before the pickup to finish this chapter, and it was ... It bothered me so much that I got up, I said I really had to go to the bathroom, and I went to the bathroom and I just walked around [laughs] outside the restaurant for six minutes and finished this chapter in the audiobook. That was last night. So yes, I definitely know the feeling.

   20. SPShane Parrish5:09

       That's awesome, right?

   21. TFTim Ferriss5:10

       Yeah.

   22. SPShane Parrish5:10

       And you're like, "How dare you show up early?" [laughs]

   23. TFTim Ferriss5:12

       [laughs] Yeah. Which is not the tone I wanted to take with my mom, but I was like, "Oh, okay. Yeah, I forgot. My, my, my OCD as it applies to time should not be imposed on all other people." So that's okay. Took a little loitering meander as a bathroom break at dinner. That's okay. Got it done.

   24. SPShane Parrish5:32

       And then in grade nine, like, my grade nine teacher wrote in my report card that Shane would be lucky to graduate

3. 5:39 – 12:32

   How a low-grade troublemaker gets vetted for an intelligence job.

   1. SPShane Parrish5:39

      from high school.

   2. TFTim Ferriss5:39

      [laughs] So what happened? I mean, a couple of observations. Number one, if you had been convicted of, I'm not sure what the legal equivalent is, something like felony or whatever that was, with your friends, that certainly, I would imagine, would have complicated later work in government on some level.

   3. SPShane Parrish5:55

      Oh, totally.

   4. TFTim Ferriss5:56

      Or it could have. But w- what were the inflection points that led to you being- ... employable, especially at an intelligence agency in 2001.

   5. SPShane Parrish6:07

      That is also, like, a crazy story because intelligence agencies, I mean, they vet people, like, up, down, so... They interviewed neighbors, they interviewed teachers, they interviewed the references that I put down. They talked to people that I didn't put down. Like, they wanna know about your life, and they wanna know who you are as a person, especially for, for students and, and for people like me who have a bit of more of a, I would say, troubled background, right? Like, I don't... I'm not a straight-A student. I didn't go to the, the best schools in life. I didn't have this clean... I had a clean record, but I didn't... You know, if you look at the, the sort of supporting evidence, it's like, well, this person's been in trouble-

   6. TFTim Ferriss6:48

      Mm-hmm

   7. SPShane Parrish6:48

      ... uh, over the course of their life. And, you know, they talked to my professors, and, like, one of my professors hated me.

   8. TFTim Ferriss6:55

      [laughs]

   9. SPShane Parrish6:55

      And so that conversation was like... [laughs] It was just so weird. Like, w- we had this... I don't know if other people had this, but in physics, first year physics, they had this computer program that generated your assignments for you. So everybody in the class literally had this different assignment, and each question was different. There was, like, 10 versions of question one, and then all the numbers were different. So if you, even if you had the same version of question one that, you know, you could find somebody else with it, you had the same version, you would have different numbers, so you couldn't just copy the answer.

   10. TFTim Ferriss7:29

       Mm.

   11. SPShane Parrish7:29

       And so all the kids in school, all the rich kids, basically bought the same tutor, and this tutor, for 20 bucks or whatever, he just, like, you gave him your sheet, and he spit out the answers for you 'cause he had all the 10 versions of the question. He would just plug in your numbers, and you'd go to school. And the way to submit your assignment wasn't you actually submitted paper. This is, like, the dawn of the internet, like 1998-ish. And so you would submit your assignment almost, like, over Telnet. You, you would, like, log in, and it would say, "What's your answer to question one?" And you would submit your answer. And I was like, "This takes a lot of time. I gotta work full time. I don't know if I can spend the 20 hours a week it actually takes to do this." But I was in computer science, so I was like, "I'll write a little program that just sort of, like, goes from negative 1,000 to positive 1,000 and guesses in increments of, like, .1." And so I did this little program [laughs] and it worked great. I got 20 out of 20 on every assignment until March of my first year. The teacher comes in, and he used one of those transparencies. And, uh, I don't know if people remember transparencies.

   12. TFTim Ferriss8:37

       Oh, yeah, the overhead projectors.

   13. SPShane Parrish8:39

       So it's like a PowerPoint graph that he puts on this projector, and it's, like, average guesses on the Y axis and student number on the X axis. And, like, the average number of guesses per question was, I don't know, like, 17 or something, and mine was, like, in the millions. [laughs]

   14. TFTim Ferriss8:56

       [laughs]

   15. SPShane Parrish8:57

       So he's like, "I wanna see this student after class." And I was careful. Like, I had read all the policies and procedures, and it says unlimited guessing.

   16. TFTim Ferriss9:05

       So you're submitting like a million guesses via Telnet. Is, is that right?

   17. SPShane Parrish9:09

       Yeah. Like, I'm not doing anything. I just basically-

   18. TFTim Ferriss9:11

       So, so there's no downside for number of guesses. You're only rewarded for getting the answer right in one of those guesses.

   19. SPShane Parrish9:19

       Exactly. And I, I-

   20. TFTim Ferriss9:20

       Oh, so why not? Yeah. [laughs]

   21. SPShane Parrish9:21

       I, I read all the policies and procedures, right? Like, I was very careful about reading all the rules to make sure I wasn't violating any rules. But I would go to bed, and I would just basically, like, hit Run on this program, and I would wake up, and I would have my full assignment submitted, 20 out of 20.

   22. TFTim Ferriss9:37

       So, [laughs] so Shane gets retained after class. Was it to discipline you and wag a finger at you, or was there something else that came with the conversation?

   23. SPShane Parrish9:48

       Oh, so he was like, "You're gonna get zero on all your assignments." And I was like, "What? That's not fair at all." And he's like, "Well, we're sort of, like, retroactively changing the rules." And I was like, "That doesn't make any sense. That's not fair. Like, I followed all... Like, I can't... All the rich kids are, like, hiring tutors. I can't do that. Like, it doesn't make sense. Just go with my exam mark as my mark," you know, sort of thing.

   24. TFTim Ferriss10:11

       Mm-hmm.

   25. SPShane Parrish10:11

       And he said no. And, and basically, the assignments were so heavily weighted that I ended up failing physics because of this.

   26. TFTim Ferriss10:18

       [laughs]

   27. SPShane Parrish10:19

       It was so crazy. And so when I'm getting my job, they actually talk to this teacher. [laughs]

   28. TFTim Ferriss10:26

       Now, how did you come in touch with... I understand why he would have an ax to grind, or at least [laughs] sounds like the kind of guy who would have maybe something scornful and spiteful to say. How did you even get connected with an intelligence agency? Were they recruiting in certain centers nearby? Do they canvas the whole country? I don't know how it works.

   29. SPShane Parrish10:47

       It was just sort of luck, right? I was doing computer science at a time when, you know, uh, the rise of the internet. I didn't wanna work for, like, Nortel or any of these big companies. I really wanted to work for an intelligence agency. I thought that would be really fun, and coincidence that they happened to be at my school. I like problems that are not really solvable, right?

   30. TFTim Ferriss11:09

       Mm-hmm.
4. 12:32 – 17:01

   The impact of frequent relocation on a child.

   1. TFTim Ferriss12:32

      Mm-hmm. Got it. I'm gonna take a hard left here to ask you about maybe, uh, since you like intractable problems, to ask you about one that I know a lot of my friends are contending with, which is thinking about how moving around helps or handicaps their kids. You moved around a ton. You have kids. How do you think that experience of moving from place to place, school to school affected you positively and negatively, or in the pro and con columns, so to speak? And how, how do you think about that, or how would you suggest other people think about that if they currently have very mobile lives and are wondering how that will affect their kids?

   2. SPShane Parrish13:19

      There's a couple different ways to think about that as it relates to my experience, which is I knew I was moving. So I knew at the end of the year I was gonna be in a different school. I mean, that became apparent sort of at least by grade six or seven. And so every year I could experiment with myself, and not consciously, but I could emphasize different parts of myself to s- do I fit in with the jocks? Do I fit in with the nerds? Do I... Like, what is my group of people? And, you know, I could play a role for a year and I knew... The, the, the downside is I knew that I was moving in a year. And so I knew all of these relationships were sort of transitory. So I think the biggest impact it had on me is even in adulthood, it took me a long time to sort of like develop, "This person's gonna be in my life for a long period of time. This isn't like a transitory relationship." And transitory means, you know, it's just gonna go. And so you don't invest in it. You don't invest in it the same way that you would invest in your best friend or somebody like that because you knew the closer you got to that person at the end of the year, the harder it would be to leave.

   3. TFTim Ferriss14:36

      Mm.

   4. SPShane Parrish14:37

      And so at that point in time it was really difficult for me coming out of that, becoming a university student and then joining the workforce to not have this mental default of, "This is gonna go away," or, "I might not see this person." But in, in flip side it's like I'm gonna work with this person for the next 15 years, and I think that was really hard for me to sort of like catch on to. It took a few years for me to, to really start investing in those friendships and those relationships in the way that I wanted to.

   5. TFTim Ferriss15:08

      If you were sitting at a dinner table with some, let's, let's say they're relatively new parents. They have kids under the age of two, right? So the kids aren't going to school for a little bit, but it's not the distant future. And they have a life where they spend X number of months in one place and Y number of months in an, in another, and maybe they're thinking about living in a different state or a different country, but they don't wanna screw their kids up [laughs] in-

   6. SPShane Parrish15:36

      Yeah

   7. TFTim Ferriss15:36

      ... maybe indulging those explorations. At the same time, they're not sure if they wanna be in one place in a fixed way. What would you say to those people?

   8. SPShane Parrish15:47

      My advice for what it's worth is I don't think it really matters much until they're sort of like grade seven or eight, and certainly in high school. It matters a lot in high school, the consistency, the friend group, the sort of knowing what to expect. Because they're... If I map myself to just my kids and their age, like there's a lot of uncertainty in their life. There's a lot of things going on that we don't see. And then adding on to that sort of like you're gonna be in a different school with a different system, with a different teachers, with... You can't really thrive in that environment easily. That doesn't mean you can't thrive. It just means you're, you're making it harder than it has to be. But before that, I would say up until grade six, again, just going on my experience with my kids, what they're really learning in school and from friendships is like how do we be social? How do we interact with other people? How do we get in the habit of going to school? How do we learn to read and learn to do basic math? And that you can sort of get anywhere in the world really, really easily.

   9. TFTim Ferriss16:50

      Mm-hmm.

   10. SPShane Parrish16:50

       Grade seven, at least for my kids, is when it started to change, and that's in part because of the schools that I sent them to. But I think it, I think it starts to matter in grade seven increasingly, and definitely

5. 17:01 – 27:12

   The benefits of a challenging education (once the tears dry up).

   1. SPShane Parrish17:01

      in high school.

   2. TFTim Ferriss17:01

      What type of schools did you send them to?

   3. SPShane Parrish17:04

      I'm a big believer that kids should be challenged, and I don't, I don't think that the, the schools around my house challenged the kids. So I found a school in Ottawa that I had to drive to and drop off my kids. And I'm the type of parent that's like, "You can do this. You can do things you don't believe you're capable of." And so starting in grade seven my kids were getting 90 minutes of homework a night. They were taking school in a different language. And they were pushed and challenged. And the standards of this school, and I take a lot of flak for this even from friends of mine, but the standards of this school are unrelenting. They don't care how you feel, and that, you know, is very counter-cultural in today's message. But if you go in there and you haven't done your homework, it does not matter. You get a zero. And to put things in context, we went to my grandmother's funeral in May, and they were one day late getting their essay in, and they were one day late and they got 10% off their essay because they were one day late. And the school's approach to this is like, "Look, we wanna produce effective adults, and that means you're gonna fail in grade seven. You're, you're not gonna fail academically because everybody there is really smart. You're gonna fail at these little life things that you should've taken that into account when you planned your essay submission."

   4. TFTim Ferriss18:26

      Mm-hmm.

   5. SPShane Parrish18:27

      You should... And they put it on the students, and they do it in such a way that the kids at first like- My, my son was crying like every night because he is naturally really, really smart, and he goes to this school and it's in a different language, and now it's 90 minutes of work a night.

   6. TFTim Ferriss18:46

      Is it French? What is the language?

   7. SPShane Parrish18:47

      Yeah, so it's French. And so it's... I don't speak French. Like, I didn't speak French to him at home. He hadn't spoken French in like two and a half years because of COVID, basically. And all of a sudden he's thrust into a French school, and they're unrelenting. So he was so n- naturally smart that he didn't have to work for anything, and that school eliminates that. They're like, "No, you have to work, and if you don't work, you can't get good grades." And it was so hard on him. And like, I'm the parent who's like, "Hey, I love you. I know this is really hard. I know you can do it. Let's shift our mindset around this." And by the end of the f- I would say December, he was like loving it. He's loved being challenged. And, you know, when it came time to pick a high school, he literally, his filter was, "What school is going to challenge me the most?" And I was like, "That school did an awesome job. I'm so happy that that's the way he's thinking about this." 'Cause it's not about grades. I mean, I would rather him basically fail at doing something hard than really succeed at doing something easy. Because I feel like we're so... We g- we get wrapped up as parents, our kids' success is our success, and so their grades become our success. But really, what we want to do is produce independent adults who are capable of handling the ups and downs of life, and that means that they're going to fail, they're gonna struggle, they're gonna have teachers they don't like. They're gonna get grades that, you know, maybe they do or don't deserve. And so I think about all of these things.

   8. TFTim Ferriss20:19

      I'm a, I would say, an example of a similar experience in the sense that I went to a very easy, reasonably disorganized set of schools up until the end of my freshman year in high school, and then was transferred, and this was my idea, but I transferred to a very difficult school, for me at least, in New Hampshire, a boarding school, and I got absolutely crushed. [laughs] It was schooling six days a week, mandatory sports every semester. You had classes also, sixth period I think it was, after sports, and then you would have seated meals with coat and tie and so on several times a week, and the whole nine. And it was so challenging. I went from being easily top of the pack to maybe bottom of the middle of the pack, maybe lower, right? [laughs] I was suddenly undistinguished from any intellectual perspective. And kids who were at this school, St. Paul's, knew how to work, too, a lot of them. And I'm so grateful for it because they were incredibly tough. Discipline was demanded. And everything after that was relatively easy, even Princeton and, and so on. I mean, the, the workload was no problem. And I think in retrospect that it was really critical to my formation. That's also where I was introduced to Japanese and other languages, and had my exchange experience, which changed everything for me. But being taught early that the world will not conform to all of your unique needs and preferences is, like you said, it's very counter-cultural. I don't think if you train a child to expect, this is true for train anyone to expect, that they are going to drive decisions, what they want is always going to be taken into account, what they like is always gonna be at the top of other priority lists [laughs] it's setting them up for a, a lifetime of disappointment and disorder and [laughs] depression probably all in one. So anyway, that's-

   9. SPShane Parrish22:35

      Totally

   10. TFTim Ferriss22:35

       ... maybe a strong response, but I agree-

   11. SPShane Parrish22:37

       Hold on

   12. TFTim Ferriss22:37

       ... I agree with the approach.

   13. SPShane Parrish22:38

       Pause for one sec. I wanna know, you said this was your decision.

   14. TFTim Ferriss22:43

       Yeah.

   15. SPShane Parrish22:43

       What made you decide that? Where did that come from?

   16. TFTim Ferriss22:47

       I guess it was informed by a couple of other inputs. So one was a, I was very lucky. I mean, luck plays into the, all of this so much. Friend, one friend of mine had escaped Long Island and he had gone to St. Paul's, and he came back and he basically said, "You gotta get outta here." [laughs] "You have to escape." [laughs] And it happened that around the same time, I think it was a math teacher and one other teacher effectively said the same thing. They're like, "Tim, I can't go any faster, but you're not gonna get what you need here." And there wasn't really a strong suggestion as to a solution in that case, but those things all combined to piquing my curiosity about these things called boarding school. I didn't know what boarding schools were really outside of a few stories from my friend's experience. So I went to the local library [laughs] back when you had to do this, and took out these really thick guides to boarding schools, tried to figure things out, and ultimately got a few scholarships and then my whole extended family helped pay for this thing 'cause it's expensive and my family didn't have, my immediate family didn't have very much money. So I was very lucky that my grandparents and other people also chipped in to make it happen. And I think that fundamentally I had also been competing in sports and I recognized in sports, like if you're not losing routinely, you're not training with the right people. Does that make sense? At least in wrestling. It's like if, if you were to train on a tennis team and your goal was to become the best tennis player possible, if you are just annihilating everyone on your team, you're kind of on the wrong team if your goal is to compete in larger and larger arenas. So I, I appreciated that and enjoyed that. With respect to competition, I was very competitive, but I couldn't really apply that to the academics in any meaningful way until I went to St. Paul's, and then I got my ass kicked. But it was, it was the, the beneficial adaptive ass-kicking that I think I really needed. So I'm all for it.

   17. SPShane Parrish24:59

       I think we, we miss that, right? Like, school has become almost too easy. We're not challenging the kids, and we're not holding them to a high enough standard, and it's causing all these downstream problems later on in life. Uh, at least that's my view. A- and I want my kids to be challenged. I want them to fail. I want them to learn how to overcome these obstacles.

   18. TFTim Ferriss25:21

       Mm-hmm.

   19. SPShane Parrish25:21

       And you must have gone through something similar, right? When you're going from sort of, like, lead dog to, you know, maybe bottom middle of the pack. Like, where's my identity? You're not just dealing with, how do I develop the systems to study and get the work done? And all these people already know it, so I'm behind. But you're dealing with all these identity crisis in terms of h- your ego and how you think about yourself.

   20. TFTim Ferriss25:45

       Oh, totally. It was, for the first six months, I mean, I was ... I just, I felt like I was always behind. I was always behind. I was always having to choose what I wouldn't finish because I just was not fast enough. I was not organized enough. I did not have the time management skills. [laughs] And figuring out when I could take a 20-minute nap so that I could then stay up an extra, you know, hour and a half after dinner to finish A, B, and C, and then manage to do this other thing in preparation so that I'd be well prepared for athletic practice the next day after a full day of coursework, after chapel every morning, just about. I think it was six days a week we had chapel. It was either five or six days, which was mostly roll call of sorts and announcements, but there were also hymns and this, that, and the other thing. It was a very, very full schedule, and I'm, I'm grateful for that. And people listening have probably heard the expression, "If you want something done, give it to a busy man." I mean, it could be a woman, of course. But the idea being, if someone is busy and they have a full schedule, they learn how to m- juggle that full schedule. And if you have an incomplete schedule, I think especially in those formative years in high school, you, you do not by necessity develop the time management skills that if you really want-

   21. SPShane Parrish26:59

       Yeah

   22. TFTim Ferriss26:59

       ... to charge hard later in life, you are going to need. And feel lucky. Very, very lucky. I mean, if I hadn't had that friend who was the proof of concept, who knows? Who knows where I would be, you know?

   23. SPShane Parrish27:11

       Yeah.

   24. TFTim Ferriss27:11

       It's, it's, uh... [laughs]

6. 27:12 – 32:30

   From 68131-1440.blogger dot com to Farnam Street.

   1. TFTim Ferriss27:13

      So, so let's, let's come back to, to your life story. What was 68131, I think it was dot blogger dot com, if I'm getting that right? What was that?

   2. SPShane Parrish27:25

      So when I was working at the intelligence agency, everybody... I started two weeks before September 11th. Literally two weeks later, the world changed, and everybody was thrust into roles and responsibilities over the coming sort of, like, decade, basically, that they weren't ready for. Nobody could have prepared you for. You just had to sort of do your best. And I remember being put in charge of something that I didn't feel like I could quite handle, and I'm making decisions that sort of impact myself and impact my team and impact my country and impact troops in theater. And, you know, I have no idea what I'm doing. And so I went to my boss one day after a particularly challenging operation. I said, "You know, here's how I thought about it. I don't think I'm ready for this job. Like, I, I don't think I can do this." And he basically just looked at me and he was like, "You're all we got. Like [laughs] what else are we gonna do? Like, we're all just doing the best we can. Get back to work." And I was like, "That's the worst pep talk I have ever heard in my life."

   3. TFTim Ferriss28:33

      [laughs]

   4. SPShane Parrish28:36

      So I was like, "Well, I think people deserve better than me, and what can I do if I can't sort of, like, out- uh, get out of this role?" I was like... So I started following people around in the organization. I was like, "How do these people make decisions? What can I learn from them?" And I went back and sort of did an MBA, and when I was doing my MBA, I, I just, you know, rediscovered Charlie Munger and Warren Buffett. A- and part of my MBA w- it was so useless, and I don't mean that in a negative way. It just wasn't giving me what I needed at that particular moment to get better at the things that I wanted to get better at, but Charlie Munger and Warren Buffett were. And so I created this website, which was 68131-1440.blogger.com, which I don't own today. Somebody else has, like, taken this over, probably 'cause I talk about it a lot. But the website was basically the ZIP code for Berkshire Hathaway dash the unit number of Berkshire Hathaway in Kiewit Plaza, and it was my online journal. Now, keep in mind, this is, like, I don't know what year it is, but I'm not allowed to have a LinkedIn profile. I'm not allowed to have any social... You Google me, I do not exist. The intelligence agency would be livid if you had any sort of public profile.

   5. TFTim Ferriss29:48

      Mm-hmm.

   6. SPShane Parrish29:48

      Any sort of anything at all. And here I am, I'm like, "Oh, I'm just gonna create this online journal, and this is how I'm gonna chronicle my learning and development." Right? Like, I'm just gonna take notes, and I'm gonna connect these ideas, and I'm gonna synthesize them, and I'm gonna compress them, and that is the act of reflection. So I'm gonna basically learn things on my own. I'm gonna reflect on them, and then I'm gonna write about them. And so I started this website, and then eventually, I don't even know how at this point, we got to I th- I think it was, like, 25,000 readers or something, and then all of a sudden I started getting these emails, which was like, "I hate typing in the name of your website. Like, can you, can you basically, like, change the name?" And I was like, "Fine. I'll just call it Farnam Street," right? Which was the homage-

   7. TFTim Ferriss30:36

      [laughs]

   8. SPShane Parrish30:36

      ... to Buffett and Munger, who I know have played, like, such a critical role in your life too.

   9. TFTim Ferriss30:41

      Yeah. Yeah, they have. I mean, I remember somebody, I, I can't recall who it was, but dug up the video of my [laughs] wavering voice at the Berkshire Hathaway shareholder meeting when I asked my question from the mic from the nosebleed seats. I have been informed by them, for sure. I mean, I have incredible respect for both of them. Were you introduced to them by Buffett: The Making of an American Capitalist, or how did you get introduced to them?

   10. SPShane Parrish31:13

       So I read Buffett: The Making of an American Capitalist, I think in university, but sort of like everything got put on the back burner once I joined the intelligence agency and, like, the world changed, right? September 11th changed everything. I didn't really come up. I mean, I worked six days a week, 12 hours a day for years. Didn't really have a lot of vacations, didn't have a lot of long weekends, and everybody else was doing the exact same thing, right? And it was the best time of my life, if that makes sense, too.

   11. TFTim Ferriss31:41

       Mm-hmm.

   12. SPShane Parrish31:41

       Not only you're working incredibly hard, you're working on amazing problems that you're really attracted to, and you're working with a group of highly intelligent, dedicated people. Like, it doesn't really get much better than that from a quality of life point of view. But everything, sort of like all these outside interests, got put on hold. I mean, I'm coming home, I'm like sort of like spending a little bit of time with the woman who was my girlfriend at the time, and then I'm going to bed, and I'm waking up and like just repeating on rinse. And then the MBA was sort of a way for me to step back from that for a couple of years, do a less intensive role there while doing a full-time MBA, and that was when I got reconnected. I was like, "Oh yeah, this, this Warren Buffett guy and Charlie Munger, but what are they doing? They're making decisions in the real world and they seem really good at it. So what can I learn from them?"

7. 32:30 – 35:07

   An early exploration of cognitive biases.

   1. TFTim Ferriss32:30

      So when you had the somewhat [laughs] awkward numerical string, right? When you had the zip code-

   2. SPShane Parrish32:38

      Yeah

   3. TFTim Ferriss32:38

      ... as the URL, what were some of the... If you remember, were there any particular pieces that struck a chord with folks? Because that's, those are non-trivial numbers you're talking about in terms of readership. Were, were there any particular threads or pieces that come to mind that really struck a chord in the early days?

   4. SPShane Parrish32:59

      I'd have to go back to be sure, but I, I think there's stuff about, like, I was trying to figure out how Daniel Kahneman came up with cognitive biases, and Warren Buffett and Charlie Munger didn't really talk about cognitive biases, but seemed to avoid them. And so I spent a lot of time trying to like reconcile how cognitive biases can help you in the real world. And so what I sort of hit on, at least from my point of view, is like cognitive biases are really good at explaining why you made a mistake in the past, but they're really poor at preventing you from making mistakes in the future.

   5. TFTim Ferriss33:38

      [laughs]

   6. SPShane Parrish33:38

      So they're, they're intellectually very satisfying, but they don't really prevent you... Like, if you create a checklist of cognitive biases and you're a smart person, you're just basically gonna outsmart yourself, right? Am I overconfident? No, I'm not overconfident, right? Like-

   7. TFTim Ferriss33:53

      [laughs]

   8. SPShane Parrish33:53

      ... I got this. I did the work. And, and so the story you tell yourself, uh, you, you sort of like talk yourself out of them in a lot of ways, which is a bit of a irony to them, but...

   9. TFTim Ferriss34:03

      Tell me more about that. What do you mean by talking yourself out of them?

   10. SPShane Parrish34:07

       Well, you come up with a checklist. Uh, like a lot of people have tried this. They come up with a checklist of cognitive biases and they're like, "Okay, I'm gonna see if this applies to me."

   11. TFTim Ferriss34:15

       So sunk cost fallacy, this, that and the other thing, expectancy bias or whatever it might be. Just putting it, putting together a list of things that one is intending to avoid. Is that right?

   12. SPShane Parrish34:27

       Yes. Yeah.

   13. TFTim Ferriss34:28

       Yeah.

   14. SPShane Parrish34:29

       And then, but consider sunk cost, right? So you, you make a decision and then you pull out your checklist and you're like, "Well, am I making this because, you know, am I considering sunk cost or am I just making this fresh?" And you've already decided at this moment, right? So you're just-

   15. TFTim Ferriss34:46

       Yeah

   16. SPShane Parrish34:46

       ... justifying and rationalizing the decision you already have.

   17. TFTim Ferriss34:48

       As you were saying.

   18. SPShane Parrish34:49

       So you-

   19. TFTim Ferriss34:49

       Right

   20. SPShane Parrish34:49

       ... you tell yourself a story about why sunk cost doesn't apply in this situation or why you're not-

   21. TFTim Ferriss34:55

       [laughs]

   22. SPShane Parrish34:55

       ... overconfident in this situation.

   23. TFTim Ferriss34:57

       Right. Use confirmation bias to address your other biases. [laughs] Yeah. Great.

   24. SPShane Parrish35:01

       Exactly, right? And the smarter you are, the, the better those stories get and the more believable they get.

8. 35:07 – 41:39

   “Ordinary moments determine your position, and your position determines your options.”

   1. TFTim Ferriss35:08

      I'd love to get your help defining a phrase, just, I suppose explaining a phrase, and then segueing into a conversation around mental models and cognitive biases and so on. So ordinary moments determine your position and your position determines your results. So what, what is meant by that line and what is meant by position?

   2. SPShane Parrish35:33

      So the counterintuitive insight that I had about decision-making from studying sort of Buffett and Munger and Peter Kaufman and a host of other people who, who've influenced my thinking, is that they almost never find themselves out of position. And if you wanna think of it as position as your circumstances, they're never forced by circumstances into doing something that they don't wanna do. And often that means they look like an idiot in the short term, but in the long term they win. And if you consider Buffett, for example, as we've talked about, you know, he closes down his partnership during a bull market in the '60s because he doesn't know how to invest anymore. He's lost touch. He can't find what, what worked for him. He reopens it later in terms of Berkshire Hathaway. Time Magazine, I think it was 1999, he's on the cover as being out of touch. 2001 stock market bursts. Right now today, I think as of last quarter, he's got $150 billion on the balance sheet. And so what he's always doing is he, he's... Everybody thinks he's out of touch and he looks like an idiot, but he always wins because no matter what the outcome is, he wins. If the stock market goes up, he wins. If the stock market crashes, he wins. Because he's put himself in a position where no matter what happens, he can take advantage of circumstances rather than having circumstances take advantage of him. And I think that that's a key element we don't realize. If you put Warren Buffett in a bad position-

   3. TFTim Ferriss37:03

      Mm-hmm

   4. SPShane Parrish37:04

      ... where all of his options are bad, it doesn't matter how smart he is. It doesn't matter how m- Warren Buffett he is. Everybody looks like an idiot when they're in a bad position, and everybody looks like a genius when they're in a good position.

   5. TFTim Ferriss37:16

      Do you then create that position by having a handful of commandments? And I'm making these up, I'm not saying this is what Buffett does because I haven't tracked him as closely as you have. But for instance, I know someone who's of a similar, cut from a similar cloth, and he's like, "No short positions, no leverage," da, da, da. And he has four or five rules that he follows, which means he doesn't always beat the S&P 500, let's say, but he's very rarely in a position where he has to... Where he's a distressed seller or is forced into a bad position, right? So he's able to play a very long game. So I guess my, uh... Please keep going, but I'm, I'm wondering how you consistently create that type of position.

   6. SPShane Parrish38:03

      So let me talk about it in terms of finance and then apply it to something else that's totally, you would think it doesn't apply to. So in finance, like, you can think of low debt, you can think of saving money, you can think of always having dry powder. It doesn't matter if you have the best idea in the world. If you can't take advantage of that idea, you might as well not have the idea. You have to be in a position to take advantage of the ideas that you have, and you have to be in a position where somebody can't sort of like call you in at the exact wrong moment because that's really expensive, as everybody sort of learned during the great financial crisis and has now forgotten. We seem to relearn these lessons over and over again. But positioning applies to so many other things that we don't think about. And you can think about it basically as in your sleep, right? Did you work out? Are you healthy? Are you eating well? Are you investing in your relationship with your partner? What position am I in in the moment that I get into a fight or argument or disagreement with my, my partner or my spouse? And we don't think about the position we're in at that moment, but if you imagine that there's a patch of grass between you and them, is that grass dry or is it wet? Have I watered that for months, in which case the spark isn't gonna light it on fire, or is this smallest little spark gonna start this forest fire? And the position that we bring into those arguments matters a lot in terms of the quality of the outcomes that we get. And I'll give you another example with... We were talking about kids earlier, and I assume a lot of people listening have kids.

   7. TFTim Ferriss39:34

      Mm-hmm.

   8. SPShane Parrish39:35

      One of my kids came home with an exam and he got a really terrible mark, and he hands it to me, and he's like a teenager so he like hands it to me. He's like, "I did the best I could," walks away. And normally the conversation ends there, and I was like, "Okay, well now is not the moment that we're gonna talk about this because I know you got this teenage attitude thing going on, but we're gonna circle back to this." And so later that night I was like, "Talk to me about what it means to do the best you can." And what he told me about the best he could was like when he sat down to write that test from 10:00 to 11:00, he focused all of his energy and all of his effort on it. He made the best decisions possible from 10:00 to 11:00. But what he forgot or didn't really appreciate is what position was he in at 10:00 AM when he sat down to write that test? Did he fight with his brother in the morning? Yep, he did. Did he eat a healthy breakfast? Nope, he didn't. Did he get a good night's sleep? Nope, he was up late. Did he study? No, he sort of half-assed it. And so what happened was he was in a bad position at the moment he sat down to write that test.

   9. TFTim Ferriss40:40

      Mm-hmm.

   10. SPShane Parrish40:40

       He was ill-prepared to write the test, but yes, he did the best he could in that moment. And so often we think about life in terms of how do I do the best I can in this particular moment, rather than how do I put myself in the best position? And part of that is like we're always predicting. We're, we're predicting creatures. And so we're always trying to gauge what the outcome is and maximize towards that outcome. I wanna go all in on Tesla. I wanna go all in on whatever 'cause I wanna maximize my return. And what we don't think about is like, okay, well, what is the cost of doing that, and what if I'm wrong, and how do I position myself for multiple possible futures where what if my idea is not correct? Can I still survive, and can I thrive on that? And if you look back and you sort of like look back at Carnegie and Rockefeller and all these, you know, historical people who built these great businesses, including Buffett, they always take advantage of a weakness in somebody else's position when their position is strong.

9. 41:39 – 43:39

   Incisive, deliberate decision-makers.

   1. TFTim Ferriss41:40

      Who else would you, and I know you mentioned a few names, but outside of Buffett and Munger, who else would you put on your shortlist? And not to make you pick favorites, I'm sure that you could give a very long list, but just off the cuff if you had to pick 5 to 10 people, let's just say. Could be four, but you know, but let's aim for five or, or slightly more people who you really respect as incisive, deliberate decision makers. Who would make that list?

   2. SPShane Parrish42:13

      So we have a mutual friend, Naval Ravikant.

   3. TFTim Ferriss42:16

      Mm-hmm.

   4. SPShane Parrish42:16

      He, he would be up there. Patrick Collison would sort of be up there. Kat Cole, who works at Athletic Greens.

   5. TFTim Ferriss42:23

      Yeah, totally.

   6. SPShane Parrish42:24

      One of my favorite people. She's always one step ahead. She's amazing. I think that there's very few people who are well-positioned in everything. Like, if you look at somebody who's extremely good at one thing like Buffett, they, that comes with extreme weaknesses. But you can, you can have a, a list of exemplars in your head almost of different people who are good at different positions. But you have to pick what, what direction you're going.

   7. TFTim Ferriss42:54

      Mm-hmm.

   8. SPShane Parrish42:54

      And then what positions do you need to be good at to be good in that direction? And so for me, like I circle back to sort of like core things, right? Which people don't really think about, but they're, they're core to everything we do in terms of like health and relationships and friendship and purpose and community. Am I working on something that I wanna be working on? Am I, am I moving closer to my destination, and is my destination the place I wanna go? And I think those questions are stuff that we don't really ask ourselves. We're always so focused on like, how do we accomplish the outcome we want, rather than, what are the key elements to this process that allow me to play for a long time? Am I going in the right, right direction, and do I wanna get to where I'm going?

10. 43:39 – 46:03

    Defining mental models.

    1. TFTim Ferriss43:39

       Mm-hmm. So I am gonna come back to just the, the broad question of how to incorporate thinking about cognitive biases, if I'm saying that correctly, or mental mo- and/or mental models. I'm not really... I guess those are different. I'd love to have you... Let- well, let's begin there. How would you distinguish or define mental models? And then I'm gonna go micro and then we'll zoom out.

    2. SPShane Parrish44:04

       So a great way to think about mental models is the source of all bad decisions is blind spots. Mental models allow you to see a problem through a different lens. You can look at the problem through... You can adopt a different persona. A great example of a mental model is like, how would Tim Ferriss think about this?

    3. TFTim Ferriss44:22

       Mm-hmm.

    4. SPShane Parrish44:22

       And then I adapt like what I know about you, and I try to see the problem from your perspective. And if I can see the problem from your perspective, now I've, I've done the one thing that actually gets me out of cognitive biases, which is the source of all cognitive biases are basically, we believe that we're part... Like, the, th- what we see is all there is. And we learn about this sort of in physics, right? In grade nine, I think, where you're standing on this train and you're carrying this ball, and the train is moving at 60 miles an hour, and how fast is the ball moving? Well, relative to you, the ball's not moving. But if you're watching the train go by, the ball's moving at 60 miles an hour. And so the source of all of our problems is that we only see that we're this person on the train holding this ball, and we can't see that there's a person outside who has a completely different view into the exact same situation that we see. So we can mentally use these tools to sort of accommodate how we can look into the world from a different person's eyes or through a different lens, be that biology or through thinking or through... I mean, the most useful ones tend to be like, and then what? You know, just asking yourself-

    5. TFTim Ferriss45:34

       Mm-hmm

    6. SPShane Parrish45:34

       ... that simple question. I accomplished this, and then what? Then what happens? Inversion, right? How do I avoid all these negative outcomes that I don't wanna get? And the stoics, you've talked about this in the past, the stoics have been doing this-

    7. TFTim Ferriss45:46

       Mm-hmm

    8. SPShane Parrish45:46

       ... for a long time. They call it a pre-mortem. I think that those are just really helpful ways, and what they're really doing is they're just allowing us to put a different lens onto the problem and see it through a different light. And by seeing it through a different light, we slightly reduce our blind spots into the problem.

11. 46:03 – 49:14

    The declaration of platform independence.

    1. TFTim Ferriss46:03

       Yeah, totally. I've found some of, uh... I haven't read these in decades, so [laughs] caveat lector for anyone who picks these up. But some of Edward de Bono's work, I think he's originally Maltese, but so de Bono's two words, but... Or actually, it's, he may just be a Maltese citizen. I can't, I can't, can't peg the nationality. It doesn't really matter. He wrote a book called Lateral Thinking. He has another one, I think it's called The Six Thinking Hats or something along those lines, which similarly very helpful just for forcing yourself as a, as a portion of a practice to look at the same situation with a different lens, a different set of questions, a different perspective. I'd love to talk to you about, about Farnam Street, but more broadly building a business/life/sl- slash businesses on content, on advice, on writing, and also certainly audio. But if you, if you look back, post Intelligence Agency, on what you have built, what are some of the more important decisions that you have made or more important experiments that you have run, whether they turned out as you had hoped or not?

    2. SPShane Parrish47:24

       I think building a business on content is really hard. I think I never set out to build a media company.

    3. TFTim Ferriss47:33

       Mm-hmm.

    4. SPShane Parrish47:34

       What I set out to do was learn timeless ideas from other people and master the best of what other people have figured out and share that with the world as a means of giving back. And part of what I wanna do in life is leave the br- world a better place than I found it. And I believe in equal opportunity and not equal outcome. But how can we have equal opportunity if we don't share information with people and make it accessible?

    5. TFTim Ferriss48:00

       Mm-hmm.

    6. SPShane Parrish48:00

       So that's how I stumbled into Farnam Street, and there's been these pivotal moments along the way, and some are intentional and some are just completely random. An example of which is I never had email. I never got people to sign up for email until FeedBurner. Remember when FeedBurner went away?

    7. TFTim Ferriss48:17

       Oh, I do. I do. [laughs]

    8. SPShane Parrish48:19

       Right. So I lost like three-quarters of my audience overnight because Google decided to shut down this thing. And then at that-

    9. TFTim Ferriss48:27

       Mm

    10. SPShane Parrish48:27

        ... moment, it dawned on me, how can somebody else take away my audience from me? No, that's not cool. How do I solve for this problem?

    11. TFTim Ferriss48:37

        Mm-hmm.

    12. SPShane Parrish48:38

        So I started an email list, and now we have like 600,000 or 700,000 people on this email list, and I send out an email every Sunday, basically what I'm learning. And, but that was the moment. I had never thought about, how do I create an email list, or I need this. It was like somebody took away my au- Facebook has done the same thing, like Twitter to varying extents has done the same thing. They basically take your audience away from you, and then you become platform dependent, and I don't wanna be platform dependent. I don't want anybody to be between me and, uh, the people who've chosen to read me and get my ideas.

    13. TFTim Ferriss49:13

        Mm-hmm.

12. 49:14 – 52:40

    A Farnam Street business breakdown.

    1. TFTim Ferriss49:14

       So what are the components of your business as it exists today? And then I'm, I'm happy to have a conversation about this, 'cause I'm just fascinated-

    2. SPShane Parrish49:22

       Yeah

    3. TFTim Ferriss49:22

       ... how different people approach things, especially since we're talking about, among other things, decision-making and so on. So I'd love to know how it breaks down currently, because you've got online courses, you have the podcast, you have other things. So how does the business, so to speak, break down as it stands right now?

    4. SPShane Parrish49:44

       So we do a few things. You remember that diagram from Disney in the '60s, and they have, like, theme parks and merchandise, and how it all interconnects? You can look this up on the internet.

    5. TFTim Ferriss49:52

       I don't, but I would love to find it, and we'll put it in the show notes.

    6. SPShane Parrish49:56

       Yeah, so my idea with Farnam Street was sort of, how do I create more surface area for people to discover timeless content, where they, they master the best of what other people have figured out? So it's literally not about me, it's about other people's ideas. I don't really have any original ideas. I sort of, if anything, maybe compress other people's ideas in an interesting way. And so we started with a website, and then we went to a podcast. Uh, and then the podcast, uh, interesting side note here, Naval Ravikant, like, saved the podcast. 'Cause I was, like, doing this podcast, and I was like, "Nobody's listening to this podcast," and I had just recorded with Naval, and I was like, "That's the last episode I'm gonna do."

    7. TFTim Ferriss50:38

       [laughs]

    8. SPShane Parrish50:38

       And then of course, that episode goes, like, parabolic, and I'm like-

    9. TFTim Ferriss50:43

       All roads lead to Naval. [laughs]

    10. SPShane Parrish50:44

        Right? And I was like, "Oh, my God, I can't give up on this anymore." Like-

    11. TFTim Ferriss50:47

        [laughs]

    12. SPShane Parrish50:48

        ... 'cause I wasn't, at the time, I wasn't having fun doing it. Now, now I'm having a lot of fun doing it.

    13. TFTim Ferriss50:54

        Mm-hmm.

    14. SPShane Parrish50:55

        Then we created these series of books called The Great Mental Models, and the idea behind The Great Mental Models was basically, what are the big ideas you would have learned in university, and can you apply those outside of the context of the domain that they were, they were learned in? And so I think that that's, you know, we, we've talked about one in terms of, like, the frame of reference that you're using to look at a problem matters a lot in terms of what you see. So we wanted to make that accessible for people, and then we branched into a course called Decision by Design. We used to have an in-person workshop on decision-making, and we learned a lot about how people make decisions in the real world, but COVID shut down all of these online events. And so we created Decision by Design as a means to not take the same material we were doing in person, 'cause what we were doing in person was very specific to being in person. It was learning from the people at your table. It was non-transferable, in a way, to online. So we took a more prescriptive approach, which are like, what are the things that, practical tools that people use in the real world to make decisions? And we share it with people. And an example of that is, like, separating problem definition from problem solution, having two separate meetings for that. And a lot of people go into these meetings, and they have one meeting, and they're like, "What's the problem?" And then, of course, we work with incredibly intelligent people, and most of them are Type A. And so you come in, and the first problem that, statement that sounds reasonable, everybody jumps into, "Okay, here's how we solve for that." Nobody, like, takes a step back and is like, "Wait, is this problem worth solving? Is this problem the real problem?" 'Cause we jump into these solutions.

13. 52:40 – 1:00:25

    Scrutinizing the problem statement.

    1. TFTim Ferriss52:40

       Could you give an example, could be hypothetical, could be real life, of scrutinizing the problem statement? I think this is really important. I don't do it nearly as much as I should. Could you maybe walk through what that process looks like? If you, if you have an example, great. Otherwise, it could be-

    2. SPShane Parrish53:01

       Yeah

    3. TFTim Ferriss53:01

       ... in the, in the more abstract.

    4. SPShane Parrish53:03

       My belief is that the person who makes the decision has to come up with a problem statement for the decision, and that does a couple things. That forces the person who's making the decision to really understand the problem. They can take input from everybody else, but ultimately, they're accountable for taking the problem statement and determining what that problem is, and in communicating what that problem is, and also identifying which solutions sort of work and fit for that. When we don't do that and we just sort of throw a problem on the table, it really backfires. And so, like, we... I'm trying to think of a good recent example of this. It's a problem.

    5. TFTim Ferriss53:44

       Well, here, I'll give you one of my own.

    6. SPShane Parrish53:46

       So maybe we can, we can workshop that.

    7. TFTim Ferriss53:48

       Yeah, yeah.

    8. SPShane Parrish53:49

       So for instance, I have tons of legacy email addresses, inboxes, and it, it is, at least at face value, the story that I tell is that it is a huge pain in the ass, and there are different maybe security vulnerabilities and issues with having different platforms and things scattered all over the place, right? So the problem, in a sense, has not been that well defined. It's just overall kind of angsty hand-wringing and a couple of identified risks. Then we've jumped straight into solutions, and there are any host of different solutions that I won't bore you with. But it's, it's going to take some time, and I think, I think I have a, a pretty good bead on what the right direction is for this. But just for purposes of using the, the exercise, how would you s- scrutinize that, right? I come in, I say, "Hey, this is a problem. We don't have things centralized in one modern inbox with all of the enterprise level security that that would include. Therefore, we should decommission these following inboxes, and blah, blah, blah," right? But I'm taking for granted that that is the right definition of the problem. Right, exactly. So it's like, who's the check and balance on what are we solving for? And it goes back to something we talked about earlier, like what direction- Am I getting closer to the destination, and is the destination the one that I want to get to? So in this case, like is the problem that you're solving, I want access to all of these materials through one inbox, or is the problem something different, which is I don't feel these inboxes are really that secure and I don't know how to manage them. And the way that you frame that problem will determine in a large part what solutions you see as available. And maybe it's something different. I mean, we're just sort of like spitballing this on the spot here.

    9. TFTim Ferriss55:49

       Yeah, totally.

    10. SPShane Parrish55:50

        But your surface area is large, right? So all these email addresses increase your surface area of attack, if that's your- your sort of the way that you're thinking about it. And if your goal is to reduce it, one way of reducing it might be to consolidate it. One way of reducing it might be to eliminate them.

    11. TFTim Ferriss56:08

        Mm-hmm.

    12. SPShane Parrish56:08

        One way of reducing it might be something completely different.

    13. TFTim Ferriss56:12

        Yeah, totally. And this is timely for me because a- as I was walking through recording a screen flow for my team related to this, I realized about halfway through, because I was talking about next actions, and I said, "Actually, wait a second. My ultimate objective here is to spend substantially less time in email." And I think maybe compared to a reference point that would be, say, an average of my friends, I do spend a lot less time in email, but I would like to spend more time on certain creative projects and larger sort of needle-moving dedicated blocks of time, three to four hours for fill-in-the-blank project or experiment. So it's, it's not... I realized pretty quickly that if my advice were implemented directly, it would just be taking this burden, 'cause it's not just attack vectors, it's also just lots of unsolicited inbound, right? It would be taking all of that and just moving it to a different mailing address. [laughs] And I was like, okay. [laughs] That sort of partially solves one issue, but it does not at all address this separate issue, which is maybe on some level the bigger issue, even though I tend to run a little paranoid. The unsolicited inbound is probably a bigger problem currently than the attack vector stuff, 'cause I have pretty good security as it stands. Probably excessive security in a lot of respects. But I realized halfway through trying to prescribe the solution, I was like, wait a fucking second. [laughs] I might be giving the best advice possible for solving the wrong thing. [laughs]

    14. SPShane Parrish57:52

        Yeah, totally, right? And, and that, that is in and of itself a good reason to separate these things. But also, when you're the boss, your suggestions become direction.

    15. TFTim Ferriss58:01

        Yeah.

    16. SPShane Parrish58:01

        So you might be just thinking out loud, but like the people hearing that are like, "Oh, Tim wants this. Here. Here's how we solve for this." And then in your head you're like, "Oh, that sounds like a good solution," but you've solved the wrong problem. And so this is why separating these meetings between like what is the problem, like can we get clear-

    17. TFTim Ferriss58:19

        Yeah

    18. SPShane Parrish58:19

        ... on what the problem is. And you don't have to go first, but like whatever your process is to get the information out of people in terms of what they see as the problem, you can take that and mull it over and be like, "We'll have another meeting tomorrow and we'll determine solutions, or maybe next week if it's, if it's not timely." And people think this slows you down. This is the biggest thing that I hear when I talk to people about this, is they're like, "Well, that'll just slow us down and prevent us from taking action." Actually, the exact opposite is true, because it increases... It's sort of like you're thinking in terms of speed, but speed doesn't have a direction.

    19. TFTim Ferriss58:53

        Mm-hmm.

    20. SPShane Parrish58:53

        So it doesn't matter how fast you're going if you're running in circles. You really wanna get to the best outcome possible in the shortest amount of time with the least amount of effort. And that means you're allowing your team to maximize their thinking. A lot of people don't think well on the spot. So having these group meetings where everybody's required to contribute, a lot of people mull it over. They go for a walk after, or they're walking home after work that night, and then they get this idea, this spark, and they're like, "No, I don't see it that way," and then they can't contribute at that point. So you've tied one hand behind your back in terms of maximizing the talent on your team to solve, to figure out what the problem is, and then to solve it. And so it makes a lot more sense to be like, "Hey, we're gonna have a 30-minute meeting here and a 30-minute meeting here instead of one 60-minute meeting, and these meetings are gonna be highly structured, and we're just gonna talk about what the problem is. Can we agree on what the problem is? What is everybo- what do you see as the problem? What do you see into this lens that I don't see? 'Cause I, I'm not you, I can't see it."

    21. TFTim Ferriss59:50

        Mm-hmm.

    22. SPShane Parrish59:51

        And that- that's a way also to get out of this, I don't know, people like to posture in meetings. It drives me crazy. They like basically repeat the executive summary in their own words, and like meetings go nowhere. And so a good way to avoid that is just to assume that everybody has read the required material and ask them what their unique contribution to this problem is that they don't think anybody else sees.

    23. TFTim Ferriss1:00:13

        Yeah.

    24. SPShane Parrish1:00:13

        And so now instead of rewarding just air time, now you're rewarding unique contribution to the problem.

    25. TFTim Ferriss1:00:20

        Mm.

    26. SPShane Parrish1:00:20

        And p- you get social signal out of having a unique lens into the problem, which is much more effective.

14. 1:00:25 – 1:02:51

    The power of asking “And then what?”

    1. TFTim Ferriss1:00:26

       That makes perfect sense. And are there other questions that you find useful in the problem-defining sessions? For instance, I mean, I, I can imagine one of the questions that I would wanna ask my team, in addition to emphasizing what you just emphasized, right, individual perspective and contribution over restating the executive summary that was sent as, as reading for the meeting to begin with, is this really a problem, right?

    2. SPShane Parrish1:00:56

       Yeah.

    3. TFTim Ferriss1:00:56

       Like, we're assuming this is a problem that needs to be solved, but like is this significant enough for us to allocate attention and resources to it compared to other things, right? I'm probably using very clumsy wording, but what other types of... Are there any other questions that you've seen be very helpful in these- Problem defining meetings

    4. SPShane Parrish1:01:21

       So and then what is a great question, right? So if we switch to a new email platform, and then what? So you can imagine, you can do a thought experiment on what your day would look like, but we often neglect all of these other things, which is like this software doesn't do this thing that I actually do a lot. So therefore, now we have to develop a workaround, or this software is completely different and everybody has to be trained on it, or this software is not as supported and doesn't update as much. There's all these sort of lenses, but I love the and then what question because it's like, okay, if we solve this problem, what state are we in and what is the cost in terms of time, money, effort, brain drain? We don't think about brain drain very often to solve this problem. And the bigger your team is, the more you tend to solve these problems that aren't really problems because you're sort of like creating busy work. For you and I, I think we both run very small teams.

    5. TFTim Ferriss1:02:15

       Mm-hmm.

    6. SPShane Parrish1:02:15

       And so we think through like, okay, if we solve this problem, then what happens? How do we develop the most leverage possible? But I think a lot of people don't tend to think through that. You know, I've seen this all the time where organizations I've worked with have switched out software, and they switch out the software to solve one problem, and they're ignorant to the 67 other problems they just created by solving that one problem. And it feels good. It feels like you're doing work. But at the end of the day, you're in a worse position than you were in-

    7. TFTim Ferriss1:02:48

       Mm-hmm

    8. SPShane Parrish1:02:48

       ... because you didn't ask yourself and then what?

    9. TFTim Ferriss1:02:50

       [laughs]

15. 1:02:51 – 1:19:44

    Setting yourself up for success with automatic rules.

    1. TFTim Ferriss1:02:51

       All right, so I'd love to segue for a minute to automatic rules, 'cause, uh, for myself at least, especially running a small team where the default, I suppose, flow of things is that a lot of decisions flow to me. And, uh, I try not to be an unnecessary bottleneck, but I have, you know, a very small team, a few employees. And automatic rules and policies are very helpful here, right? So for instance, I have a blog post I put up. It's like I'm not reading any new books this year [laughs] which solves a lot of, a lot of issues as, as you might imagine. And I have these blanket policies for at least five to eight years I did no speaking engagements effectively. I've d- I've made a few exceptions recently, but for a long period of time, I did none of that. For another, I think, I wanna say probably three to four years, no angel investing, right? And, and these were rules that prevented decision fatigue and just allowed me a lot more cognitive bandwidth and emotional and physical bandwidth. So what are some of your automatic rules? I've got a few here. Work out every day, no days off. Invest in an index fund every month. No meetings before 12:00. Do you wanna spend a f- maybe a few minutes on those? And then any other examples that come to mind?

    2. SPShane Parrish1:04:11

       So before I, I get into a few more examples, like let's back up for a second.

    3. TFTim Ferriss1:04:15

       Mm-hmm.

    4. SPShane Parrish1:04:16

       Automatic rules turn your desired behavior into your default behavior.

    5. TFTim Ferriss1:04:21

       Mm-hmm.

    6. SPShane Parrish1:04:21

       And they do it when you're at your best. And so you can pre-decide a lot of things. And why are rules effective instead of just a pre-decision? You need it to be a rule, and the word rule is very specific and very useful. And I got this idea from Daniel Kahneman, and we were talking, and he said, "I have a rule. I never say yes on the phone."

    7. TFTim Ferriss1:04:46

       Hmm.

    8. SPShane Parrish1:04:47

       He was explaining why he had just told somebody that he'd tell them... he'd talk to them again tomorrow and follow up with them, and they had asked him to do something. And I was like, "That's fairly interesting. Why, why do you have that rule?" And he said, "That rule is so that I don't end up saying yes because I feel social pressure to say yes to these things, and I wanna please other people like all of us wanna please other people." And he's like, "I learned over years," and this, this is like fascinating, will blow your mind, will change your life. He's like, "I learned over years, people don't argue with rules."

    9. TFTim Ferriss1:05:21

       Mm-hmm.

    10. SPShane Parrish1:05:21

        "And I follow them." So we're taught our whole life to follow rules, but we're, we've never thought of like how can we create rules for ourself that we just follow when we're at our worst, when we're sort of like in the worst situation possible.

    11. TFTim Ferriss1:05:35

        Mm-hmm.

    12. SPShane Parrish1:05:35

        We all know no matter how bad our day is, we shouldn't speed on the highway because it's against the rules. What we don't think about is how do we use rules to our advantage. A great example, I had a friend who, who basically lost a whole bunch of weight using this rule, and he basically said, "Every time I go out for dinner", and he, he ate out for dinner a lot in his life for work. He's like, "I order... My rule is I order the healthiest thing on the menu, and I don't drink."

    13. TFTim Ferriss1:06:06

        Meaning no alcohol.

    14. SPShane Parrish1:06:08

        Meaning no alcohol, right?

    15. TFTim Ferriss1:06:09

        Yeah.

    16. SPShane Parrish1:06:10

        So and he didn't order dessert. That was his sort of like third rule. And if you think about dessert, dessert's an interesting one because I think we can all relate to it. You go out, you celebrate with your friends. The wine comes out, the champagne comes out, the dessert comes out, and all of a sudden you're doing things that maybe the best version of you doesn't want to do. But you're in a social situation. You feel pressure. You can tell people, "I'm not eating dessert, you know, I don't want dessert tonight," but that relies on willpower. So every time you say, "I don't want dessert tonight", you're, you're using willpower to get out of that situation, and eventually everybody loses the battle with willpower. So how can you create a system to get out of this willpower thing where it's like I'm not using willpower? I create an automatic rule. I don't eat dessert. That's my rule. And when you say that to your friends, you might have to say it twice, but they definitely push back a lot less, as long as you're consistent with that rule. But that rule puts you in the best position possible for success. And so like I have a couple of these rules, right? When I, when I'm out after a talk with the people who organize the talk, my rule is I stop drinking at 9:00. Nothing good happens after 9:00.

    17. TFTim Ferriss1:07:17

        [laughs]

    18. SPShane Parrish1:07:17

        And so like you just choose in advance. And, and a great way to think about this again is going back to what we talked about earlier, direction, destination. What does a person who achieves this destination, what do they behave like? Can I create automatic rules in my life? And they're so context specific, they're so specific to you because they're also things you don't do naturally. Like, I, I hate working out, right? But I wanna be healthy. It's really important to me to be healthy. And I was struggling, and this is where the workout every day rule came in, I was struggling to go three times a week because I would get into this negotiation with myself.

    19. TFTim Ferriss1:07:54

        [laughs]

    20. SPShane Parrish1:07:55

        And that negotiation was like, "You know, I normally work out on Wednesdays," but that little voice in my head is like, "You didn't sleep well last night. You have a lot of work on your plate." And then all of a sudden I'm like, "I'll do extra tomorrow." I'll catch myself doing, you know, this sort of talk. And I'm, why am I negotiating with myself? Like, who's in charge here? I'm in charge of this situation. And so I, I changed it and I'm like, "I am gonna work out every day." And it doesn't mean I go to the gym every day, and it doesn't mean I go for 60 minutes. I can reduce the, the scope or, or sort of like-

    21. TFTim Ferriss1:08:29

        Mm-hmm

    22. SPShane Parrish1:08:29

        ... duration of my workout, but I'm going to work out every single day. And that workout might be a five-mile walk, it might be something else, it doesn't matter, but there's gonna be some form of exercise involved. And that single rule has changed so many people's lives that I've shared it with, because you start exercising every day. Because the negotiation in your head now is like, "What do I fit in today? How can I fit this in?" It's not, "Should I work out?" It's like, "Oh, I don't have a lot of time. Maybe I'll just do 20 minutes. Maybe I'll just go to the gym and do squats."

    23. TFTim Ferriss1:09:04

        Mm-hmm.

    24. SPShane Parrish1:09:05

        And all of a sudden, you get in this habit, you're consistently working out, so your health starts to get a lot better. It, it's mind-blowing how this simple principle can have profound impact. Do you have any rules for yourself?

    25. TFTim Ferriss1:09:19

        So many [laughs] . I think-

    26. SPShane Parrish1:09:20

        I wanna hear some of yours.

    27. TFTim Ferriss1:09:22

        Yeah. Well, I will say that as you're talking, you know, my, my father, for instance, has, uh, in the last... It's been very fast, actually. Maybe in the last two to three months has lost 50 pounds, and he's done that by following this low carb diet in The 4-Hour Body, or as described by The 4-Hour Body. Pe- people can find it online certainly without having to buy any book. But the key there, one of the keys, is having a very straightforward rule, and the rule is you don't have to give up your favorite foods for the rest of your life, you just have to give up your favorite foods for six days at a time, and you have a set cheat day every week. And that also allows you to get off the hook or to successfully negotiate with yourself or with your friends because you say, "It's my policy that I only have cheat day once a week on Saturday, so if you wanna have dessert, booze, whatever it might be," not in my dad's case with, with those two, but, "I'm happy to do it, but it's gotta be on a Saturday." Right? And then all of a sudden, the negotiation is over. There is no negotiation.

    28. SPShane Parrish1:10:24

        Yeah.

    29. TFTim Ferriss1:10:24

        So I, I would say when I am my best self, which I am right now... Let's see. Another rule would be if I wanna follow the slow carb diet, have pre-made meals ready to go in the refrigerator for at least three to four days at a time. So I did that today, for instance. Because if I start to run out of food and I'm picking at the dregs of what- whatever I have sitting around and I'm starting to starve, but lo and behold, I have a podcast to do, I'm going to go buy something fast that is not gonna conform to the diet. So batch processing, buying, or having bought food so that it's ready to go. I mean, I have a lot of policies. So as it relates to inbound, and I have an autoresponder that kicks back a lot of this stuff, I'll tell you some of the rules that have existed for a while. Generally speaking, no speaking engagements, and I could explain why that is. That was a particularly hard one when I made the decision, because speaking engagements for authors who have bestselling books is very lucrative, and it is in fact the main source of income for a lot of authors.

    30. SPShane Parrish1:11:28

        Yep.
16. 1:19:44 – 1:26:39

    Doubling down on email and the evergreen.

    1. TFTim Ferriss1:19:44

       wanna deal with. So if you had to double down on one or two things you are already doing, what would you double down on?

    2. SPShane Parrish1:19:51

       Oh, definitely the email list. I think that that is, is the key, right? You... If you can pick one primary focus for this, you need to be able to reach your audience, you need to be able to communicate with them. And however you do that, whether you do it building it through Twitter or Instagram, you want sort of all paths to lead back to your email list. And the person who does this the best is James Clear.

    3. TFTim Ferriss1:20:14

       Yeah, he's a machine.

    4. SPShane Parrish1:20:15

       He's a machine, right? Like, Instagram points back to his website, Facebook points back to his website, Twitter. You know, he's just really, really smart at this. So if you're gonna model yourself off somebody and you wanna build an email list, like, he's the person to sort of, like, think about. You also have a huge audience for email.

    5. TFTim Ferriss1:20:33

       I do, yes. I'm very, very grateful. Very methodical, too. I mean, I've thought about it. Although, like you, didn't think about it at all until [laughs] a few things happened, including FeedBurner [laughs] getting... Sending a notification we were about to turn-

    6. SPShane Parrish1:20:46

       Right

    7. TFTim Ferriss1:20:46

       ... off everything.

    8. SPShane Parrish1:20:46

       Yeah.

    9. TFTim Ferriss1:20:47

       And then began emailing however long ago it was, which has been a great, actually really fun process for me, because 5-Bullet Friday serves as my diary, effectively.

    10. SPShane Parrish1:20:59

        Yes, totally.

    11. TFTim Ferriss1:20:59

        I don't have a separate diary. So it's fun to look back, you know, two years ago, it's like, there's one that comes out every week.

    12. SPShane Parrish1:21:05

        Yeah.

    13. TFTim Ferriss1:21:05

        And I can look back two years and go, "Oh, yeah, I remember that exact week," locked in the amber like some prehistoric, [laughs] you know, mosquito or something.

    14. SPShane Parrish1:21:13

        Yeah.

    15. TFTim Ferriss1:21:14

        And I can revisit.

    16. SPShane Parrish1:21:16

        And you also realize how, like, stupid you were, or at least I do when I look back at some of my old newsletters. I was like, "Oh, what was I think-"

    17. TFTim Ferriss1:21:22

        Yeah

    18. SPShane Parrish1:21:22

        ... but that's also a really positive sign, 'cause you're growing.

    19. TFTim Ferriss1:21:25

        [laughs]

    20. SPShane Parrish1:21:25

        But, but going back to the question-

    21. TFTim Ferriss1:21:27

        Mm-hmm

    22. SPShane Parrish1:21:27

        ... you know, I would focus on email, and I would ditch podcast at this point and just double down on email and longform content counterintuitively on the web.

    23. TFTim Ferriss1:21:38

        Let's just say I was like, wish granted, boom, poof, podcast just dissolves into the ether with a rainbow and, you know, some whinnying of unicorns, and it's all wonderful, but that, that has come to a close. And then you're doubling down on email and, what was the phrasing that you just used? But it was sort of online...

    24. SPShane Parrish1:21:59

        Longform content, like-

    25. TFTim Ferriss1:22:00

        Longform content. How would you do that? Like, what might things look like in the next three months if you were doubling down on, on those things?

    26. SPShane Parrish1:22:09

        Just for context, like, I was operating under the guise of starting from scratch.

    27. TFTim Ferriss1:22:14

        Okay.

    28. SPShane Parrish1:22:14

        So I would-

    29. TFTim Ferriss1:22:15

        Got it

    30. SPShane Parrish1:22:16

        ... pick a vector, and that vector would be sort of creating content that people find useful and timeless.
17. 1:26:39 – 1:31:35

    Investing with the benefit of deal flow.

    1. SPShane Parrish1:26:39

       in the short term.

    2. TFTim Ferriss1:26:40

       Exactly. You have compounding gains in the form of audience growth and so on that will be more sustained as opposed to fair weather readers or listeners who are just chasing whatever the algorithm serves them on any given day and any given minute. So question just on the compounding thing, because Naval, of course, is an incredible investor. I'd love to know a bit about how you personally think about investing, 'cause it seems like you do some private deals. Also seems like you invest in an index fund or index funds. Could you say more about that, and could you also speak to whether or not you think investing in indices, I guess it is, has substantially changed n- now that, as I understand it, big tech factors very heavily into at least some of the, the i- indices or indexes, I'm not sure which the, the, the proper word is to use here. Um, but how do you, how do you personally think about investing?

    3. SPShane Parrish1:27:38

       I use the cash flows from Farnam Street to invest.

    4. TFTim Ferriss1:27:43

       Mm-hmm.

    5. SPShane Parrish1:27:43

       And one of the advantages to being you or me that a lot of people don't have is deal flow. So you get deal flow that the best VCs in the world would be envious of, and to some extent, so do I.

    6. TFTim Ferriss1:27:56

       Mm-hmm.

    7. SPShane Parrish1:27:57

       And so you've created this vehicle that wasn't primarily for investing, but has this big benefit to it, where you're able to get deal flow because of all the other things you do, not because-

    8. TFTim Ferriss1:28:07

       Mm-hmm

    9. SPShane Parrish1:28:07

       ... you're focused on deal flow every day. And so I wanted to use that to my advantage in terms of, how do we get into good deals? How do I create something sustainable? How do I create something long term? And how do I apply this knowledge that I'm having fun applying, right?

    10. TFTim Ferriss1:28:22

        Mm-hmm.

    11. SPShane Parrish1:28:22

        Like, I, I, I like investing. I don't do a ton of VC investing. I, I try to invest mostly... In terms of check size, it's a- almost all allocated to companies that are making money or something that I really understand the path of. I occasionally invest with friends, but I, when I invest with friends, my rule is, go back to rules, I write that investment off to zero the minute I write the check, 'cause I never want my investment with friends to affect our friendship. So in my head, it's just a zero the minute the check comes out.

    12. TFTim Ferriss1:28:53

        It's a donation. [laughs]

    13. SPShane Parrish1:28:54

        Yeah, it's a donation to them. And I'd rather be wrong supporting a friend than right not supporting them. Like, it doesn't-

    14. TFTim Ferriss1:28:59

        Yeah

    15. SPShane Parrish1:28:59

        ... that doesn't do anything for our friendship. And so I think about, like, the things that I understand, and then diversifying, 'cause I'm not... I don't use outside money. There's no outside investors. There's Shane. And so I think about, like, how do I survive?

    16. TFTim Ferriss1:29:14

        Mm-hmm.

    17. SPShane Parrish1:29:14

        Not, not how do I maximize my returns in the short term. How do I maximize my returns in the long term? Rule number one from Warren Buffett, don't lose money.

    18. TFTim Ferriss1:29:25

        Mm-hmm.

    19. SPShane Parrish1:29:25

        And rule number two is, like, see rule number one. So I wanna diversify when it makes sense, but I also wanna be in a position where I can flow to whatever makes sense. Like, I don't... You know, we, we have a real estate company where we invest in real estate, but we'll wait until there's a lot of distress until we put more money into that, and then I can be patient. I can go years without making an investment.

    20. TFTim Ferriss1:29:47

        Is that mostly residential, commercial? What kind of stuff?

    21. SPShane Parrish1:29:50

        All residential.

    22. TFTim Ferriss1:29:51

        All residential.

    23. SPShane Parrish1:29:52

        Yeah. Yeah, so it's multifamily, like mul- multifamily at scale. And so, like, I just wanna do things where there's a long runway, I'm working with people I trust, the financial returns are sort of, like, justifying the investment. But also, the advantage to being you or I or this one-person sort of team is you can put yourself in a position where you don't have to... Like you said, you stopped VC investing for years. You don't have to make an investment. Nobody's emailing you going, "Tim, why haven't you made an investment?" Nobody's emailing you going, "What are you doing with my money?" All of a sudden, you can just let cash pile up on the balance sheet, right?

    24. TFTim Ferriss1:30:27

        Yeah.

    25. SPShane Parrish1:30:27

        Like, you can just let it accumulate in the bank account. And then when you see an opportunity where the risks and rewards sort of indicate that this is favorable and you have an edge in this particular investment, then you can write a large check in, like, 12 hours.

    26. TFTim Ferriss1:30:42

        Mm-hmm.

    27. SPShane Parrish1:30:42

        Like, there's no investment committee to go through. There's nothing to do. It's just you making a decision. And so I, I like that aspect of it, and I, I think about it that way. I do the index fund thing. It's sort of outside all of that, which is just, like, I like fail-safes. I don't know about you, but, like, I hide money from myself at times.

    28. TFTim Ferriss1:31:02

        [laughs]

    29. SPShane Parrish1:31:02

        So, like, the real estate company, when I log into my bank, it doesn't even show up on the list of companies we have. It's just, like, this separate entity-

    30. TFTim Ferriss1:31:09

        Mm-hmm
18. 1:31:35 – 1:34:02

    Thoughts on index fund investment.

    1. TFTim Ferriss1:31:35

       And has your thinking on index in- investing changed over the years, or is it like I, like I see oftentimes, you know, people saying, "It's not timing the market, it's time in the market, so just keep buying," right? Just keep buying with respect to an index or any, any number of different index funds. How has your thinking remained the same or changed with respect to index investing?

    2. SPShane Parrish1:31:58

       The weighting of the top companies has definitely caused me a little bit of hesitation. What, what I do with indexing is while I invest in an index fund every month, I don't always invest the same amount of money in the index fund.

    3. TFTim Ferriss1:32:12

       Mm-hmm.

    4. SPShane Parrish1:32:13

       So when, if you wanna think of this sort of very simplistically, when there's panic and nobody wants to invest, I tend to put more money in, and when everybody's investing and we're reaching all-time highs, I tend to put less in. I don't know if that's an effective strategy for everybody else. It's just sort of what I do to regulate money going into index funds. But what we haven't seen with index funds that worries me is with the rise of index funds, we haven't seen massive forced selling of index funds and how that impacts the funds. And so I'm actually sort of counterintuitively thinking, you know, the rise of activist investors, they just went through this 10-year spell where they didn't outperform, and they're really smart. I'm kind of thinking, like, now might be the time to allocate more money into that pocket, because I think that, you know, there, there might be an opportunity when index funds are no longer sort of what we're thinking of as index funds, and they always go up, and all of a sudden stock picking comes back in vogue.

    5. TFTim Ferriss1:33:22

       Hmm.

    6. SPShane Parrish1:33:22

       And you can buy some of them, like you can buy Pershing Square at like, I don't know. I don't know what today's price is, but like a 30% discount to its net asset value. And I remember doing this during COVID. So March 2020, Bill Ackman got on TV and he's like, "I have these like asymmetric bets," and I was like, "Oh, Bill's a really smart guy. I know him." So I started looking at the net asset value of Pershing Square, and it's like the market's tanking at the same time the net asset value is, like, going parabolic. So I was just buying all the shares I could, and that's all publicly available information.

    7. TFTim Ferriss1:33:55

       Mm-hmm.

    8. SPShane Parrish1:33:55

       But you have to be in a position to take advantage of that information with cash, otherwise you're, you're forced selling something to do

19. 1:34:02 – 1:43:09

    Factoring sleep into opportunity cost.

    1. SPShane Parrish1:34:02

       it.

    2. TFTim Ferriss1:34:02

       Mm-hmm.

    3. SPShane Parrish1:34:03

       How do you think about index fund investment? What do you do with your money?

    4. TFTim Ferriss1:34:06

       Oh my God. I'm in the process of tremendously [inhales] I don't wanna say de-risking because I, I, I... that would presume that I accurately can identify and understand all the various risks out there, which is kind of ridiculous, uh, would be a ridiculous thing for me to claim. But I, I have realized that many, many, many of my investments are highly correlated, and I've always been growth first, and I have friends, I'm not gonna name names, but friends who are like, "Look, there is no role for bonds in your portfolio. You don't need the cash. Like, you should be 100% go, go, go." And these are very smart people who have done very, very well over long periods of time. And intellectually, let's first of all say I'm not a financial advisor. I do not recommend anyone take that advice, but this is, this is advice that a few of my friends were giving to me based on their understanding of my life. And what I came to realize is that while academically that might be true, [laughs] it actually makes it harder for me to sleep. So I am making s- a number of decisions right now that for anyone who is type A, super driven, successful, growth-minded investor would look at askance and consider probably pretty stupid. But for me, I'm realizing, number one, I don't need to chase, I don't need to chase extra gains necessarily. I mean, I, I, I have areas where I feel like I have informational advantage with early stage stuff. If, if I decided two years from now I want double, triple down or 10X down on that sector, I could do that pretty easily. So I'm gonna try and experiment for a few years. I'm in the process of doing this right now, where I'm going to be moving a lot of my cash from sort of growth positions. I can't do that in all cases 'cause a lot of my stuff is locked up in privates. But I'll be moving a lot from areas that are high growth but that are high complexity and difficult for me to understand. That applies to a bunch of stuff overseas where I don't think the, the world is as siloed as it once was. I mean, Nassim Taleb and I were talking about this recently where, you know, the idea that you're protected from the ups and downs of, say, the US by being in Western Europe is kind of ridiculous, and that's true even further afield. So I'm trying to, I suppose at this point, optimize for sleep. That's it. [laughs]

    5. SPShane Parrish1:36:46

       Yeah.

    6. TFTim Ferriss1:36:47

       And I, I'm sure I'm gonna look back a few years from now and say, "Fuck, man, the opportunity cost was so high." But there are periods of time where I've been red hot and I've been able to strike, most notably when I had much less cash in sort of 2008 to 2012-

    7. SPShane Parrish1:37:07

       Mm

    8. TFTim Ferriss1:37:07

       ... let's say, which was a, an incredible vintage and, uh, period for startup investing. If someone were to give me my starting capital that I had then now, even adjusted for inflation, say, "Go get 'em, tiger," I would not succeed. I really don't think I would be able to do what I did then. The world has just changed. The valuations and the deal structuring, all of these things have changed. However, there have been these, these pockets where I've been able to make good decisions only because I have extra powder. And right now, I feel like I'm, or at least over the last handful of years, pretty fully deployed, where I could get in a position, if I screw up my planning, where I'm a forced seller or at least a distressed seller.

    9. SPShane Parrish1:37:51

       Right.

    10. TFTim Ferriss1:37:52

        Not, not in any kind of bet the farm way, but it adds stress. And I think that after so long and really focusing so hard and in s- and for periods of time working so hard to get to a point where I don't need to, fortunately, and there's a lot of luck involved, but worry about my expenses. Like, to manufacture complicated strategies for life that add that stress back in is [laughs] kind of ridiculous. It's completely absurd. So I'm trying not to do that. And I notice among my friends, like, almost all of them do this, and we laugh about it. It's like, "Oh, yeah, I managed to remove this stress. Let me figure out a really sophisticated, like, self-sabotaging subconscious way to add all that stress right back in." So that's a long answer to a short question, but-

    11. SPShane Parrish1:38:43

        Well, it's so interesting 'cause you hit on a couple things there that really resonate with me and how I approach things. The first was you, you were like, "The opportunity cost is huge." Well, no, because you're only considering the measurable opportunity cost. You can't measure your sleep at night as easily.

    12. TFTim Ferriss1:39:00

        Right. Right.

    13. SPShane Parrish1:39:01

        And so that decision makes perfect sense. Like, why risk what you have and don't need for, like, what you don't have and don't want to begin with?

    14. TFTim Ferriss1:39:09

        Yeah. Right.

    15. SPShane Parrish1:39:10

        It, it doesn't make sense to take those risks at a certain... When you're young, it makes sense to take a lot of risk in order to sort of get ahead. But as you get older and you have more to lose, sure, you can keep pushing that button as long as you want, but at some point, it doesn't always have to be a pure financial decision. An example of that is when I, when I left sort of working for the intelligence agency, I had this amazing pension, and they're like, "Well, starting at 55, we're gonna pay you this much money every year." And it's a pretty big sum of money. Like, I worked a lot of years there a- and got a really decent salary. And I was like, "No, cash it in." And my accountant was like, "What do you mean cash it in? Like, that is the worst financial decision you can make." And I'm like, "It's the worst financial decision, but it's the best psychological decision, because if I know somebody's coming to save me, I'm gonna behave differently. I need all the chips on the table in front of me, and I need to know it's on me. And I know that doesn't make sense to you, but for me, that's the only way that I'm gonna have a shot at being successful at this."

    16. TFTim Ferriss1:40:12

        Also, I mean, not to state the obvious, but let's go for it. Past shelter, food, all the basics, and then a couple of extracurricular fun things here and there, beyond that, even for that, the extracurriculars, I mean, presumably the money is used to improve your quality of life. So if you're doing things to make money that are decreasing your quality of life, [laughs] it's sort of antithetical to the whole name of the game in, in some respect.

    17. SPShane Parrish1:40:45

        100%.

    18. TFTim Ferriss1:40:46

        Which I'm saying in part to remind myself of it, 'cause I'm making a lot of decisions right now, which for me provoke a visceral angst because I have been so... During periods, I've made some terrible decisions, too. Let's be very clear. I've made some very terrible, very expensive decisions, but there have been these sprints of, say, four or five years where I've made a series of very good decisions that tend to be opportunistic.

    19. SPShane Parrish1:41:18

        Yeah.

    20. TFTim Ferriss1:41:18

        The podcast is a great example.

    21. SPShane Parrish1:41:20

        Yeah.

    22. TFTim Ferriss1:41:20

        That was nowhere in a three, five, or 10-year plan. It was very opportunistic, and the timing was really fortunate. And therefore, when I s- when I start moving, as I am right now, quite a bit into, let's just call it safer stuff, that's up for debate, but let's just call it safer stuff, it's very counter to my conditioned way of being in the world. Do you know what I mean? So it's an experiment. I'm also viewing it like, "Look, yeah, I'm gonna pay a bunch of hits here and there, and I'm blah, blah, blah. Tax this, tax that. Let's not let that tail wag the dog if we can avoid it." But I'm gonna do it for, let's just call it two years, and see how I feel, right? If I'm happy I did it, great, and if I'm sleeping better, great. And if I'm like, "Okay, that was an interesting experiment, but actually I wanna get back in the fray and roll up my sleeves and, like, really go at it in this full contact sport known as all this early stage stuff," you know, then fine. It's not a permanent decision.

    23. SPShane Parrish1:42:19

        I think that's an interesting way to think about it. I mean, you could also, like, if you feel the need to keep going, y- you've accomplished so much and you've done really well, you could also just put money aside, enough money aside, that if everything else went to zero, you'd be okay. Hide that bank account from yourself, basically invest it in, in, you know, sort of like safe, reliable stuff, and then pretend it doesn't exist and then, and then go nuts, right?

    24. TFTim Ferriss1:42:44

        [laughs]

    25. SPShane Parrish1:42:44

        And then, like with all the other stuff, you can sort of like play these little mind games on yourself where it's like-

    26. TFTim Ferriss1:42:49

        Mm

    27. SPShane Parrish1:42:49

        ... "Oh, you know, all of a sudden I'm worth less. I gotta make more," right?

    28. TFTim Ferriss1:42:53

        Mm-hmm.

    29. SPShane Parrish1:42:53

        And, and if that's your goal is to do that, but I'm totally with you in like money should improve the quality of life that you're living. And a lot of things that that looks like it- it's counterintuitive to most people, 'cause it looks like time. It looks like you buying time.

    30. TFTim Ferriss1:43:08

        Mm-hmm. [laughs]

20. 1:43:09 – 1:47:53

    How to make better decisions.

    1. TFTim Ferriss1:43:09

       I know we're winding to a close shortly, but I wanna ask you perhaps just broad strokes, how should people think about becoming better at making decisions? And here's the, the backdrop for that. You know, in the room next door I have Poor Charlie's Almanack.

    2. SPShane Parrish1:43:27

       Yeah.

    3. TFTim Ferriss1:43:27

       I love reading about mental models. However, I sometimes run into this cognitive indigestion when I try to force feed myself too many rules, cognitive biases, fill in the blank.

    4. SPShane Parrish1:43:45

       Yeah.

    5. TFTim Ferriss1:43:45

       I get to a point where I fail from too much information, not too little information. Just like if a friend of mine, and this has happened a lot, who has no exercise habit, no controlled diet to speak of, comes to me and says, "Hey, give me an index card with, like, the 20 things I should do to get, [laughs] whatever, six-pack abs by [laughs] the end of the year," it never works.

    6. SPShane Parrish1:44:07

       Yeah.

    7. TFTim Ferriss1:44:07

       It works exactly 0% of the time. And I have found that sometimes I try to take on too much at once. Sometimes I find looking at decisions retroactively to be helpful, but I'm not sure. There are people who would say, "Well, we don't actually learn that much from our failures." I think Peter Thiel would probably underscore that. How would you suggest people go about getting better at making decisions? What are some of the approaches or tools in the toolkit?

    8. SPShane Parrish1:44:36

       I think we hit on a couple things during this episode, and I'll, I'll tie this in in a second. So most of the time when we know we're making a decision, we tend to do fairly well in that moment-

    9. TFTim Ferriss1:44:49

       Uh-huh

    10. SPShane Parrish1:44:49

        ... given the information we have, because we're, we're rational about the sense that, well, we're mostly rational. We don't get it perfect, but we're directionally correct. If you're thinking about marrying your partner, you know you're making a decision. If you're thinking about buying a house, you know you're making a decision. In those moments, we tend to be more rational. You know, we might be wrong in the end, but we're not really wrong, especially given the information we have at the time. We're generally correct. So when it comes back to general decision-making, like, here's how you undo yourself. You can marry the best person in the world for you, but if you don't invest in that relationship, it all multiplies by zero.

    11. TFTim Ferriss1:45:24

        [laughs]

    12. SPShane Parrish1:45:25

        And investing in that relationship becomes not a decision, right? Like, 'cause you're not thinking about it as a decision. You start living with somebody, and then all of a sudden, you know, you're arguing over how you loaded the dishwasher and, you know, it turns into not talking to each other. Well, if I tap you on the shoulder in that moment and I say, "Hey, Tim, you're about to put gas or water onto this situation. What are you... What would you like to choose?"

    13. TFTim Ferriss1:45:51

        [laughs]

    14. SPShane Parrish1:45:51

        And this is what I do with my kids, and they're always like, "Oh, water." But what I'm really doing is like, "Hey, you're making a decision to escalate here. Is that the decision you wanna be making? No judgment on my part, but, like, I'm just gonna alert you to the fact you're making a decision." And that tends to help a lot in terms of making better decisions. So-

    15. TFTim Ferriss1:46:08

        Mm

    16. SPShane Parrish1:46:08

        ... how are the, the moments that happen in everyday life, how do we recognize that they're decisions? And I would say the biggest aid to judgment in decision-making is the position you're in at the time you're making a decision. It comes back to a lot of what we talked about today. There's three sort of aspects to decision-making that I think about that are very counterintuitive, which is the position you're in at the time you make the decision. Can you manage your emotions? Not eliminate them, manage them. Your temperament, right? You don't wanna be making a decision when you're hungry, angry, lonely, tired. You don't wanna be m- making a decision when you're focused on proving yourself right rather than getting the best outcome. I have this phrase I remind myself with, which is outcome over ego. Am I focused on getting the best outcome, or am I focused on satisfying myself and proving myself right? Because the minute I'm proving myself right, what tends to happen is I ignore all this information that says that I'm not right, and then all of a sudden I'm not focused on the outcome. So by reminding yourself to focus on the outcome, you sort of, like, open your idea. And you get this when you run a business. It- it's tends to be a little easier in some ways because you're, you're so tied and wed to this outcome that you're looking for ideas no matter where they come from. You're looking for the best idea to get you to the outcome you want. A- and the third aspect is sort of thinking independently. Are you thinking independent of the circumstances, or are the circumstances thinking for you? Are you thinking independently of what the crowd is doing, or is the crowd thinking for you? Because if those are happening, if circumstances or the crowd are thinking for you, you're not really thinking at all.

    17. TFTim Ferriss1:47:47

        Mm.

    18. SPShane Parrish1:47:47

        But what do you have to do to think independently? You have to be well-positioned so that you can think independently.

21. 1:47:53 – 1:51:24

    Why should we write in the age of AI?

    1. TFTim Ferriss1:47:53

       Mm. All right, one last question before we land the plane, and that is, if it's possible, what is the short explanation for why we should write in the age of AI?

    2. SPShane Parrish1:48:08

       Writing is the process by which we realize we don't understand what we're talking about, and it's only when you sit down and put pen to paper or even type out an idea that you have, a decision you're making, an idea you're wrestling with, that you sort of see where you don't understand it. And the process of writing is not only refining that idea and helping you reflect on it, but you actually generate new ideas in the process of writing. And I think it's so easy. My kids do this, right? They're just like, "Oh, insert these little variables into ChatGPT, out comes an essay." And I'm like, "You can't use that. You can u- you can feed it your essay and ask it, like, where the weak points are. That's a different way of using it than sort of like getting it to write these essays for you." But, you know, the question they have is like, "Why would I write? Like, this doesn't make sense."

    3. TFTim Ferriss1:48:57

       Mm.

    4. SPShane Parrish1:48:57

       You know, this thing will do it for me, and I'll get a good grade. And the other aspect I would say that's important to writing is you learn humility, right? Like, you learn to give up on an idea that you have. Like, you keep trying to fit this idea in, and, and you've probably experienced this too, and you, you really want this idea to work. Maybe you have a great opening sentence to a paragraph, but, like, it just doesn't make sense, and you can't make it make sense. So you have to give up on it. You have to delete it. You literally have to delete something from your mind and be like, "No, that doesn't make sense. No, that's not good enough." And I feel like the, there's a certain humility to that, that we're almost lacking in today.

    5. TFTim Ferriss1:49:33

       Mm. Yeah, you're not gonna be able to examine your own thinking if the source material is produced by ChatGPT. [laughs]

    6. SPShane Parrish1:49:42

       Yeah. Well, what you're really doing is, like, you have all these thoughts, right? And you're making the invisible visible. And by making the invisible visible, now I can see it. Now I can play with it. Now I can see where it's weak and where it's strong and how it interacts with other ideas I have. But when it's just in your head, then you can't see it, so you can't reason with it. You can't play with it. You just end up playing these mental games with yourself where you trick yourself into thinking something That you don't actually think

    7. TFTim Ferriss1:50:09

       Yeah. I mean, and I'm bullish on so many facets of, of AI, so I'm not a Luddite who's trying to keep the, the horse and buggy at its pinnacle or anything like that. However, I do think there's a risk of us subjugating our own faculties in the same way that most of us have lost the ability to navigate without Google Maps or some equivalent. [laughs] If you remove your long form thinking and remove the habit of putting that down in some form such that you can cross-examine it and identify where you're just not making any sense, or maybe there's a shred of something that comes out spontaneously that makes a whole lot of sense, but if you hadn't captured it, you would never would've noticed it as it passed through your mind. I can't help but think that you will be incredibly weakened over time. And if we're either getting stronger or weaker, I'd say directionally we wanna go towards the former when possible.

    8. SPShane Parrish1:51:11

       Definitely. And one of the crazy things is, like, writing is often the process by which we learn to think.

    9. TFTim Ferriss1:51:18

       Yeah, for sure. Yeah, you're not writing down what you think. You're writing in order to think.

    10. SPShane Parrish1:51:23

        Right.

22. 1:51:24 – 1:53:35

    Parting thoughts.

    1. TFTim Ferriss1:51:24

       I was just journaling this morning, in fact, and one of my, one of my lines, which was borrowed from some of my friends in the military, super simple. I mean, this is not a incredibly granular rule, but just as a, a guiding philosophy, "Slow is smooth, and smooth is fast. Do not fucking rush." In other words, like, when I rush, I make mistakes. Those mistakes cost me more time in the long run, just like trying to make decisions quickly before defining the problem correctly. It's like, you wanna be... If you wanna be fast in the long term, [laughs] it's like, for me at least, slow is smooth, and smooth is fast. Uh, Shane, the new book is-

    2. SPShane Parrish1:52:05

       Oh, I love that

    3. TFTim Ferriss1:52:05

       ... cl- [laughs] yeah, it's a good one, Clear Thinking: Turning Ordinary Moments into Extraordinary Results. People can find that wherever fine books are sold. And people can find the Farnam Street website at fs.blog, if I'm not mistaken.

    4. SPShane Parrish1:52:21

       Yeah.

    5. TFTim Ferriss1:52:21

       Anything else that you would like to mention? Anything you would like to add? Maybe recommendations or requests of the audience before we come to a close?

    6. SPShane Parrish1:52:34

       If you wanna email me, it's shane@fs.blog. I, uh, read everything, but I don't respond to everything. I would love to know about sort of the ideas from this episode that connect to ideas that you have in terms of decision-making and positioning, and what your best ideas are for how you position yourself to sort of survive in different environments and adapt to whatever the situation requires.

    7. TFTim Ferriss1:52:58

       I dig it. All right, folks. You got it. God be with you, Shane, and your inbox, shane@fs.blog. [laughs]

    8. SPShane Parrish1:53:06

       [laughs]

    9. TFTim Ferriss1:53:06

       And really nice to spend some time together, Shane. Thank you for blocking it out and making the time to get together. Really appreciate it.

    10. SPShane Parrish1:53:13

        This was awesome. Looking forward to getting together in person soon.

    11. TFTim Ferriss1:53:16

        Yeah, definitely. And for people listening, as always, thank you for tuning in. Y- you can find the show notes, including the Disney Diagram we'll hunt down and everything else we referred to at tim.blog/podcast. And until next time, just be a bit kinder than is necessary, not only to others, but to yourself. And thanks for tuning in.

Episode duration: 1:53:56