← The My Wife Quit Her Job Podcast With Steve Chou
The My Wife Quit Her Job Podcast With Steve Chou
590: Why People Dumber Than You Are Millionaires (And What You Must Do Now!)
00:12:18
In this episode, I'm going to break down exactly why people who are likely dumber than you are killing it in business. Then, at the end, I will share with you the secret of success that I learned from running my own businesses. - What You'll Learn
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- [00:00]
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Welcome back to the podcast, the show where I cover all the latest strategies and current events related to e commerce and online business. Now, in this episode, I'm diving into something that might surprise you. Why people who don't seem particularly smart or qualified are building multi million dollar businesses. Success isn't about being a genius. It's not even about having the perfect plan. A lot of the time it comes down to taking action, embracing risk, and thinking differently. Enjoy the show. Welcome to the My Wife Quitter Job Podcast. Today's episode is a little bit different. It's a personal story that perfectly illustrates just how unpredictable the path to success can be.
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So about 20 years ago, I went back home to visit my mom over the summer and I happened to run into an old classmate of mine from high school. And back in the day, this classmate of mine wasn't known to be the brightest guy in school. I remember one time a group of us were discussing our SAT scores and he blurted out that he got a 700 on the test. And when we asked him whether he got a 700 on verbal or a 700 in math, he just said yup. Anyway, I naturally assumed that he was working in some dead end job making minimum wage. But I was shocked to learn that he owned multiple apartment buildings and his own construction company. This guy was loaded. And even though I was doing okay making about 100k as an electrical engineer at the time, I. I was a pauper by comparison. And at that point I remember thinking to myself, what the hell is this guy's secret? How did he start a successful construction company? Because it was dumb as rocks in high school. And this threw me for a loop because my whole worldview at the time was that you had to be smart to make big money. But the truth is, the richest people in the world aren't necessarily smarter than you or me. In fact, according to a Swedish study, the top 5% of earners in the world are slightly less intelligent than those just below them on the economic ladder. So let's start with reason number one. Many smart people rationalize that they don't need much money to live. They already have a decent paying job, go on a yearly vacation, own a car, and can afford to go out to eat every now and then. So why rock the boat? In fact, this was my exact thought process back when I worked my day job as an electrical engineer. Back then, I thought that the only people who cared about getting rich in business had to sacrifice their social lives, their family, and devote their entire future towards the pursuit of wealth. And this is one of many excuses that I had to not start a business or try to make money outside of my day job. And the result was that for nearly a decade, I lived a listless life without purpose. I basically woke up in the morning, went to work, came home, had dinner, watched tv, rinse and repeat. Now, I had money to provide for myself, but I was living life like a zombie with the exact same daily routine. Now, it was only after my wife became pregnant with our first child did I realize a fundamental truth. In order to have freedom to spend time with who you want and not have to go to an office for eight hours a day, making money is important. Like it or not, you need money to improve your life. Which in my case was spending time with my newborn child. Once I had a purpose for the money, I was able to unlock my full earning potential. So the first question I encourage all of you to ask yourself is, is if you weren't limited by money, what would you be doing now? My answer to this question was to be present with my kids every day and have the freedom to coach their sports teams and help them out with school. Now, your definition of winning might be different, but the goal for most people is to get to the point where money is no longer the limiting factor in the decisions that you make. However, to win, you're going to have to put yourself out there. You're going to have to take some risks and actually try. Which leads me to reason number two, why many smart people can't get rich. Even if you have a purpose. You'd be surprised how many smart people I know aren't willing to try to start a business or go out on their own because they are afraid of looking stupid. Now, I used to have this mentality in high school. When I grew up, I was regarded as one of the smartest kids in school. In order to maintain that reputation, I didn't want to fail. I couldn't fail. So what ended up happening was that I often stuck to easy things that I knew I was good at. Rather than push myself to my limits. I was reluctant to try anything new because I didn't want to fail and ruin my image. But for dumb people, they don't care because they are already being underestimated. Now, remember my high school friend who I thought was dumb as rocks? Well, dumb people have two huge advantages over smart people. First off, being constantly underestimated puts a chip on your shoulder to prove everybody wrong. And that can be a powerful motivator. Second, you've got nothing to lose. Because who really cares if you fail? People have already written you off. You're like the eighth seed in the NBA playoffs. Nobody expects you to win. You've got nothing but potential upside. Smart people, on the other hand, have the opposite problem. They have nothing but downside because everybody expects them to be wildly successful and in everything they do, which is impossible. If a smart person tries something outside of their comfort zone and then fails, then their reputation as a smart person is at risk. Now, the path of least resistance for a smart person is to follow the traditional path. You go to school, you get your job, you spend the next 40 years in an office and then you retire. Now, I used to think that my job provided everything that I needed. And for most people it can be. But if you want to achieve financial freedom and do whatever you want, you can't follow common wisdom and expect to get uncommon results. You have to do something different. Now, the other thing I've noticed about dumb people is that they tend to underestimate risk, whereas smart people tend to overestimate risk. Now I've mentioned this in the past, but the most problematic students in my profitable online store course are engineers. Whenever I try to teach an engineer how to start an E commerce business, they are always running mental simulations in their heads to predict the probability of failure. They want all the answers before they start. And I'm not criticizing engineers because I am one. But the problem with trying to overanalyze everything is that that turns you into a pessimist. You start thinking about everything that could go wrong instead of the opposite thinking about everything that could go right if you succeed. By the way, if you're interested in learning how to start your own e commerce store, make sure you sign up for my free 6 day E commerce mini course below. Now, for this behavior, I blame Darwinism and evolution. Back in the stone ages it was all about survival and being cautious. Otherwise you could die. And being smart was valuable because you could calculate all the things that could potentially go wrong and avoid the risk that could get you killed. But today, no one's going to die from making a wrong business decision. And being your own boss isn't about life or death. Maybe you lose some money or some of your dignity. Maybe you have to move back in with your parents for a while. But taking risks to make money, assuming you're not doing anything illegal, is unlikely to end in anything that you can't recover from. But what about dumb people? Most dumb people are completely ignorant of all the things that could go wrong. Meanwhile, smart people are busy analyzing all the potential pitfalls and it stops them from ever getting started. One time I had an acquaintance come to me for help to start an e commerce store and the problem was that he had no money. Heck, he didn't even have enough money to buy a sample of the product that he wanted to sell. So what did he do? He took pre orders for his product, collected money from customers, and then bought a bulk shipment of products from Alibaba sight unseen. So many things could have gone wrong. He could have been shipped junk from Alibaba. The shipment could have arrived late, it might not even have arrived at all. The product might not have functioned as he intended. But luckily everything turned out fine and he ended up making multiple six figures in profit in his first year of business. Here's the thing. As a smart person, you're probably very good at imagining all the things that can go wrong. But the reality is that people are terrible at calculating the probability of those events actually occurring. The worst case scenario almost never happens, and you spend all this time worrying that it keeps you from taking actions that could change your life and lead to something amazing. Now, I still struggle with this today, and I constantly have to remind myself of my overarching goal. I want to make money so I can do whatever I want and hang out with whoever I want without worrying about the money. And I never want to spend 40 hours a week in an office. Which leads me to the next limiting belief of smart people. They never think that they know enough to be successful. Now, there's an interesting aspect about people that I've learned over the years that is just so counterintuitive that I still don't really understand why it happens. And it's called the Dunning Kruger effect. The Dunning Kruger Effect is a cognitive bias where people with low ability or knowledge in a particular area tend to overestimate their competence. People who are less skilled or knowledgeable mistakenly believe that they're more competent than they are due to a lack of insight into their own limitations. But the opposite is true of smart people. Smart people rarely think that they are the expert in any given field. And therein lies the problem. The reason smart people struggle to make money is because they get hung up on the fact that that they know that they don't know enough to succeed. For example, I have a friend who's an amazing engineer, and he's either built or been the lead developer for many famous apps that we all use today on our phones. He clearly has the skills to start a very successful company. But he's terrified about the business aspects of running his own company now, because the relative gap between his extensive knowledge of engineering versus his lack of knowledge for business is just so large that he's discouraged from taking action. Meanwhile, a dumb person who has very little engineering or business experience usually thinks to himself, I don't really know anything, but how hard could this possibly be? And then what happens is that the dumb person takes action and gets into the ring while the smart person is busy second guessing himself on the sidelines. Now, in general, things rarely end up as badly as we think they will, and there's so many external factors outside of just knowledge and strategy that the dumb person stumbles upon success because he tried to. So, bottom line, if you take anything away from this video, here's what I want you to remember. When I first started my business and I followed a bunch of experts and gurus to learn, I was under the impression that all these successful people knew what they were doing from the start, that they never made mistakes. But I've come to learn from interviewing over 500 successful entrepreneurs on my podcast that almost everyone had no clue what they were doing in the beginning. They didn't have a concrete plan and and if they did, it never went as expected. Most successful people are just going with the flow and solving problems as they arise. And the main reason why they are successful is because they are too dumb to quit. Heck, the reason I started an online store selling handkerchiefs was because I thought to myself, how hard could this possibly be? You just buy stuff at a low price and sell it at a high price. Simple, right? Well, I overestimated my abilities early on and didn't understand all the subtleties of selling online. I didn't understand everything that could go wrong. And the first three months after I opened were horrible. I didn't make any sales. Hell, I don't even like handkerchiefs. But I stuck with it because I wanted my wife to stay at home with the kids. And believe me, I was teased by my friends all the time for having a master's degree in electrical engineering from Stanford and selling handkerchiefs for a living. For most of my first year in business, I felt like an idiot. I felt like I was wasting my time. My until things started to actually work after we made six figures in our first year and then seven figures years later, all of a sudden I look like a genius, which I am not. I just kept with it until it worked. The same goes with my YouTube channel, my blog, my podcast, and everything that I've ever done in life. Remember, you can't win if you don't start, and you can't lose if you don't quit. This is all you need to know. Same goes with my YouTube channel, my blog, my podcast, and everything that I've ever done in life. Remember, you can't win if you don't start, and you can't lose if you don't quit. This is all you need to know. Hope you enjoyed this episode and that.
- [11:54]
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It gave you a fresh perspective on what's really possible, regardless of credentials or experience. For more information and resources, go to my wife, quithherjob.com Episode 590 and if.
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You'Re interested in starting your own e.
- [12:09]
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Commerce store, head on over to mywifequitterjob.com and sign up for my free 6 day mini course. Just type in your email and I'll send the course right away via email.