5 Rules to Live By

Heuristics, shortcuts and creating geometric returns in your life

As humans, we are faced with nearly hundreds of decisions every single day…

And those decisions are high stakes because your decisions today will dictate the type of person you become and what you will achieve over the next 1, 5, and 10 years.

Just think of where you are in your life right now…

Your family, your friends, your profession, your health, your wealth, your happiness, your fulfillment…

They are the way they are because of the decisions you made over the past 5-10 years.

In other words, the quality of your decisions dictates the quality of your life.

So let me ask you this - what if you had a cheat code to make better decisions?

A shortcut, if you will, to filter decisions through to ensure you are making the right choice at the right time…

Is that something you’d be interested in?

Fortunately, you’re in luck.

These mental shortcuts do exist and they’re called heuristics.

A heuristic is a mental shortcut commonly used to simplify problems and avoid cognitive overload. Heuristics are part of how the human brain evolved and is wired, allowing individuals to quickly reach reasonable conclusions or solutions to complex problems.

While there are hundreds of heuristics to choose from, today I’d like to share 5 with you that have created geometric returns in my life.

In fact, they have had such a massive impact on my life that I upgraded them from heuristics to rules.

With that in mind - here are the 5 rules to live by if you want to geometrically improve your results and quality of life.

Rule 1 - The Pareto Principle

The Pareto principle states that for nearly any outcome, roughly 80% of the output comes from 20% of the inputs.

Said another way - 20% of the inputs are responsible for 80% of the result you desire.

Originally discovered in 1906 by Vilfredo Pareto, when he showed that 80% of the land in the Kingdom of Italy was owned by 20% of the population and that 20% of the pea pods in his garden produced 80% of the peas, this principle has been shown to be true across every avenue of life:

• In fundraising, 20% of the donors often account for 80% of the funds raised.

• In business, 20% of the clients often account for 80% of the sales.

• In customer service, 20% of the clients often account for 80% of the complaints.

• In computing, fixing 20% of the most reported bugs eliminates 80% of the related errors and crashes in a given system.

• In healthcare, 20% of patients often account for 80% of the health-care expenses

• In friendship, 20% of your friends often account for 80% of the joy, growth, and happiness you experience

• In advertising, 20% of your ads will generate 80% of your leads

• And so on ad naseum

But that’s not all…

The Pareto principle has another layer to it that’s often overlooked, and that’s the 4% rule.

The 4% rule is simply the Pareto principle applied to itself.

For example, say you run a business and 80% of the sales come from 20% of the clients. Make a subgroup of that 20% of clients. Within that subgroup, the principle applies again; 80% of the sales come from 20% of the clients. This means that 4% (20% of the smaller group) of the total amount of clients are responsible for 64% of sales.

The takeaway here is quite powerful - 4% of your inputs account for 64% of the result you desire.

While the math is quite cool, what’s of primary importance is your ability to use this principle in your day-to-day life to create geometrically outsized returns.

Your Takeaway

You need to be ruthless in discovering:

1. The 20% of inputs that will lead to 80% of the result you desire

2. The 4% of inputs that will lead to 64% of the result you desire

And then commit yourself to execute those inputs consistently at the highest standard.

“Most people fail in life because they major in minor things” - Tony Robbins

Rule 2 - Parkinson’s Law

Parkinson's law is the adage that work expands to fill the time available for its completion.

Here’s an easy way to visualize this.

Imagine I hand you 2 completely empty containers.

Container 1 is the size of a coke can, while container 2 is the size of a submarine.

Then I tell you to fill each container with the same purified water.

Which container will hold more water??

Obviously, container 2 will fill with more water because the space within the container is exponentially larger.

The trick is to now view these 2 containers as deadlines and to view the water as the work you put in…

Because a deadline functions like a container for your work:

• If you don’t set a deadline, your work will continue to expand forever because there is no container.

• If you set a deadline way out in the future (a large container) your work will continue to expand to fill the larger space.

• If you set a short deadline (a small container) your work cannot expand because it’s contained.

Now, which container has higher-quality water?

Since you filled each container with the exact same purified water, the quality of water is no different and this is the real magic of Parkinson’s law - despite setting a shorter deadline your quality of work will be as good if not better.

If you’re anything like me, you experienced this phenomenon in college when writing a term paper.

While you had all semester to write the paper, you put it off till the final week but still found a way to get it done and get at an A.

Your takeaway

• Set short deadlines. You’ll get more done in less time without sacrificing quality.

Rule 3 - The Lindy Effect

Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology and knowledge age linearly in reverse:

“If a book has been in print for forty years, I can expect it to be in print for another forty years. But, and that is the main difference, if it survives another decade, then it will be expected to be in print another fifty years. This, simply, as a rule, tells you why things that have been around for a long time are not ‘aging’ like persons, but ‘aging’ in reverse. Every year that passes without extinction doubles the additional life expectancy. This is an indicator of some robustness. The robustness of an item is proportional to its life!” - Nassim Taleb

In other words, the longer a non-perishable thing survives the longer you can expect it to continue to survive.

This stands in direct contrast to what we experience as humans…

You’d expect a 2-year-old to have a longer life expectancy than a 98-year-old.

But with non-perishable things the reverse is true.

The life expectancy of a book that has been around for 200 years is far greater than a book published this week.

For example - the life expectancy of Adam Smith’s Wealth of Nations is far greater than whatever pop economics book gets published this week and that’s because Wealth of Nations has been tested by time for 247 years.

If it has survived 247 years, we can be confident it will continue to do so moving forward.

The key lesson here is time because time is the ultimate test of robustness.

If something has survived the test of time, then you can be confident it will do so moving forward, and you want to place more faith and trust in it.

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Your Takeaway

There are numerous ways this should influence your life, but here are 2 big ones:

1. Time is a natural filter for meaning. If something has been around a long time, it means it’s still important in some way. It’s useful. And those are the kinds of things worth knowing. Thus, when choosing books to read (or knowledge to consume) look for source material that has been around for the longest period of time.

2. When making decisions about your health look to what has survived the test of time. Whatever humans have done consistently for 1000s of years is probably more powerful and beneficial than things we are making up today.

Rule 4 - If It’s Going to Suck Now or Later, Choose the Thing That Sucks Now

When deciding between 2 actions always choose the thing that’s going to suck now in the short term.

Your health is an easy example - choose to work out now (sucks now) so you don’t end up obese, bedridden, and sick by the time you are 60 (sucks later).

Or your relationship with a significant other - choose to have a hard conversation now (sucks now) so you don’t end up resenting each other and ending the relationship in the future (sucks later).

Or how about your business - choose to fire employees now (sucks now) so you don’t end up declaring bankruptcy later on when you can’t be profitable (sucks later).

The reason you want to choose now is because of compounding interest.

When you choose the thing that sucks now you are taking care of the problem before it has a chance to compound over time.

When you choose to defer that suckiness to a later date, you are allowing it to grow with compounding interest over time.

Your Takeaway

• Always choose the thing that’s going to suck now not later.

Rule 5 - Hell Yes or No

Decision fatigue is a real thing and plagues many people.

And the cost of decision fatigue is quite real.

I like to think of indecision as throwing an anchor off a moving boat. As you avoid making decisions in your life, the anchor grows continuing to slow down your ship. If enough unmade decisions add up, the anchor grows large enough to stop the ship entirely, or even worse, sink it.

That’s because unmade decisions sit in your brain taking away available resources you could be using to focus your energy on creating or solving more important challenges.

An easy way to get around this is to use the hell yes or no framework.

When faced with a decision ask yourself - “is this a HELL YES or no?”

If it’s a HELL YES, then go for it.

If it’s not, then you say no.

Period.

Otherwise, you end up with a life that’s filled with mediocrity because you said yes to too many things that don’t light you on fire.

Your takeaway

• If it’s not a HELL YES, then it’s a no.

🧠 The Hive Brain

I’d like to close with a request…

These posts get read by nearly 10,000 people every week…

In that sample of 10,000 people, there is a hive mind, a treasure trove of knowledge and lessons learned from years of living life.

This post today is a small snapshot into some of the major heuristics and tools I’ve picked up over time that have helped me succeed.

But what I’d really love to know is - what is 1 rule you live by that has created a geometric return in your life??

Call me a dreamer, but can you imagine how awesome it’d be if every person reading this post dropped one rule in the comments below?

We’d immediately get to tap into the collective knowledge, power, and life experience of a small town, and I can’t help but believe we’d be better off for it.

So, if you’re feeling up for it, drop 1 rule you live by in the comments below. I’d really appreciate it.

Much love.

James

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1. Humans have got to be the only species dumb enough to think that we can outsmart what has been tested by time for 1000s of years.