Thinking in Bets: Annie Duke on Making Smarter Decisions When You Don't Have All the Facts - Greatest Hits! (SB1837)

Summary

The Stacking Benjamins Show – Episode SB1837

"Thinking in Bets: Annie Duke on Making Smarter Decisions When You Don't Have All the Facts – Greatest Hits!"

May 4, 2026

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Episode Overview

In this "Greatest Hits" episode, hosts Joe Saul-Sehy and Josh “OG” Bannerman, CFP, revisit a classic conversation with Annie Duke — renowned former professional poker champion and author of Thinking in Bets. The core theme is decision making under uncertainty: how to make better, smarter choices when you never have all the information (a situation familiar to anyone dealing with money, investing, or even daily life).

Through poker analogies, sports stories, and financial examples, Annie Duke illustrates the importance of embracing uncertainty, focusing on process over outcomes, and recognizing that every decision is, at its heart, a bet. The episode also covers the psychological traps that commonly undermine decision quality and, in true Stacking Benjamins fashion, is sprinkled with humor, lively anecdotes, and practical takeaways.

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Key Segments & Timestamps

• Headline Discussions: The Cost of Youth Extracurriculars & Mortgage Rates … [09:29–19:22]
• Interview: Annie Duke on Decision-Making … [20:46–39:09]
• Listener Questions & Book Recommendations … [42:18–52:22]
• Aftershow: Parenting, Extracurriculars, & TV Recommendations … [57:34–65:41]

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Headline 1: Parents Betting Big on Kids’ Extracurriculars

[09:29–15:52]

• Joe and OG discuss a piece about families spending exorbitant amounts (sometimes $100,000+ annually) to support children's extracurriculars (sports, arts, etc.).
• Survey numbers: 40% of American families spend over $1,000/year; 20% go over $2,500; some even skip vacations, delay debt repayment, or forego retirement savings.
• OG notes, “You have to figure out how to support them in their dreams...as long as you know what the other end of that stick is.” (13:23)
• Joe cautions against sacrificing financial security for kids' passions, reminding, “There isn’t a loan for retirement.” (54:25)

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Headline 2: Mortgage Rates—A Reminder About Assuming Status Quo

[15:52–19:22]

• Reflection on past worries about rates hitting 5% (now in 2026, even higher).
• Warning: People often build their financial lives assuming the current easy conditions will last.
• Joe: “Life is a series of trade offs…Very few of us have the opportunity to do everything we want whenever we want.” (13:49)
• OG: “Get your debt cleaned up because rates are only going to go higher… We're not going to see rates go down for…a long, long time.” (18:05)

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Featured Interview: Annie Duke on Decision-Making Under Uncertainty

[20:46–39:09]

Embracing Uncertainty & Avoiding the Certainty Trap

• Annie Duke: “The biggest pitfall is that people think they need to know and be 100% certain that it’s going to work out…that actually creates a lot of big pitfalls in your ability to make a good decision.” (20:56)
• Two sources of uncertainty:
  • Lack of complete information.
  • The influence of luck.

The Pete Carroll/Philadelphia Eagles Super Bowl Example

[22:15–26:57]

• Annie re-tells the infamous Super Bowl XLIX call (Seahawks passing at the 1-yard line).
  • If Russel Wilson’s pass had been caught: Carroll is a genius.
  • Instead, after the interception: “Is it the worst decision in Super Bowl history, or just the worst decision in history, period?” (24:09; Annie Duke)
• Contrasts with the Eagles’ “Philly Special” (unexpected but successful).
• Key Insight: We tie the result too closely to whether we think a decision was good or bad, ignoring the real (often sound) probabilities behind the choice.

Poker vs. Chess: The Role of Luck and Process

• Poker: Process can be right, outcome can be wrong (or unlucky).
• Annie: “We act like we’re playing chess…But actually, we’re more like playing poker, where you can make perfectly good decisions…and you know what? Someone hits a lucky card…and you lose.” (28:55)

Investing Analogy—Short-Term Outcomes vs. Long-Term Decisions

[28:55–30:50]

• OG links to investing: Often, people equate a short-term negative result with a bad decision, e.g., selling stocks in a downturn.
• Annie: “We have this big problem… we get zoomed in on what's happening in the moment instead of the long trend... Always try to take the long view.” (29:30)

The Danger of Beliefs & Confirmation Bias

[31:02–36:46]

• Annie: “All decisions are bets…our decisions are only as good as our beliefs.”
• People don’t seek accuracy; they try to be right—filtering and spinning information to fit their existing beliefs.
• Annie: “If you’re a smarter PR agent, you're better at the spin — and it's all downhill from there.” (35:09)
• The fix: Treat beliefs as works in progress, “under construction,” and welcome disconfirming evidence as a way to calibrate, not defend, beliefs.

Notable Quotes

• “We should be comfortable…we can never be sure or certain about what our beliefs are. And when it comes to predictions of the future…luck always intervenes.” (22:15; Annie Duke)
• “If [the Seahawks’ pass] had worked, [Carroll] outsmarted Belichick. Instead…he’s an idiot. Our outcomes are not always the result of skill, but we tie them together anyway.” (24:39; Annie Duke)
• “The good news is that…it’s not all downhill. You can actually shift your mindset…start to approach the world with the goal of accuracy.” (35:10; Annie Duke)
• “If you view your beliefs as under construction…disagreeing information is no longer a threat. It’s actually quite helpful to making the building more sound.” (36:46; Annie Duke)

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Listener Q&A: Index Funds, Market Cap Weighting & Book Recs

[42:18–52:22]

• Listener Ethan asks: Why use market-cap weighted portfolios? OG explains index funds are designed to replicate the market, not beat it, hence tracking error is minimized by matching the index's weightings.
  • “If you're trying to match the S&P 500, your portfolio better look a lot like the S&P 500.”
  • Equal-weighted strategies exist, but are often more cumbersome and less practical for most investors.
• Book Recommendations:
  • Truth About Money (Rick Edelman)
  • Set for Life (Scott Trench)
  • Broke Millennial (Erin Lowry)
  • The Behavior Gap (Carl Richards)
  • Fooling Some of the People All of the Time (David Einhorn)
  • Built to Sell (John Warrillow)
  • The E-Myth (Michael Gerber)
  • Plus, shoutouts to Moneyball, Stocks for the Long Run, and various Michael Lewis books

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Memorable Moments & Humor

• Poker analogies abound, tying poker decision-making to investing, parenting, and life.
• The “triple jump” joke about figure-skating scholarships and the cost of med school (12:20–12:40).
• Annie’s playful Eagles/Patriots remarks: “The probability that cars are going to get overturned…well, that was 100%. That’s the one thing you could be certain about Philly.” (22:38)
• On beliefs: “Being smart just makes it worse...your ability then to discredit all facts becomes even worse because your biases are heavier.” (33:38–34:00; OG and Annie)
• The after-show includes a comical anecdote about youth sports tryouts and the “everyone makes the team if you pay” business model. (59:18–62:29)

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Actionable Takeaways

• Don’t equate short-term results with long-term quality: Just because something (investment, decision) doesn’t work immediately doesn’t mean it was the wrong call.
• Embrace uncertainty: Nobody ever has “all the facts.” The best decisions come from understanding probabilities and being comfortable with risk and luck.
• Be open to being wrong: Treat beliefs like construction sites — expect to revise as new information appears. This mindset fosters learning and better decisions.
• Consider process over outcome: Focus on making the best decision with what you know, not on guaranteeing a good result.
• Watch out for confirmation bias: The smarter you are, the more skilled you may be at rationalizing your beliefs — double down on seeking accuracy, not approval.

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Notable Quotes with Timestamps

• “People think that they need to know and be 100% certain that it’s going to work out…that actually creates a lot of big pitfalls in your ability to make a good decision.”
  — Annie Duke [20:56]

• “We act like we’re playing chess...But actually, we’re more like playing poker, where you can make perfectly good decisions...and you know what? Someone hits a lucky card on the end and you lose.”
  — Annie Duke [28:55]

• “All decisions are bets. Our decisions are only as good as our beliefs.”
  — Annie Duke [31:02]

• “If you view your beliefs as under construction…disagreeing information is no longer a threat. It’s actually quite helpful.”
  — Annie Duke [36:46]

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Further Information

• Annie Duke’s book: Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts (available everywhere).
• Annie’s website, newsletter, and Twitter: annieduke.com
• More episodes and resources at stackingbenjamins.com

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Overall Tone & Style

Lighthearted, friendly, often humorous — but always engaging and practical. The conversation is easy to follow even for non-experts, always relating technical decision theory to real-life situations.

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For New Listeners

This episode is both a masterclass in behavioral finance and decision science, and a quintessential example of Stacking Benjamins' blend of fun and functional personal finance advice — all with plenty of pop culture references and friendly banter. Missed the episode? This summary gives you all the key lessons and moments you need.

Transcript

[Joe]

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[OG]

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[Joe]

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[OG]

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[Annie Duke]

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[OG]

Hey there stackers. Happy Monday. And on today's episode, we are featuring the one and only Annie Duke, former poker champion. She also had a couple great books a few years back. Thinking in bets was one of them. And the important thing about Annie is that she talks about how to make smarter decisions when you don't have all the facts. Which is where poker really meets investing and living, isn't it? It's every money decision you've ever made. Like in investing as well. Like not just investing, but buying a house, changing jobs. How well is that going to go? Helping your kids? Deciding whether Doug should be allowed near the nacho cheese machine? None of those come with perfect information. And that's why I think this episode is so important. In fact, that is not only the only thing that's important about this. Here's the funny thing, Stackers. I would love for you to tell me if this still holds up because the reason I'm playing this for you is because I think it does hold up this this episode. Originally, Annie came here in 2018, which sadly feels like she was just here. Like many of our superstar mentors that we normally feature on Wednesday, but this week on Monday. But another piece we used to do the headlines before Annie. So you're going to hear a couple of headlines first, and I want you to listen closely to these headlines because we talk about mortgage rates feeling high and we then the the piece that we're going to bring up talks about how mortgage rates felt high. You know why? Because they was because they were flirting with 5%. Remember that? People nervous because rates weren't 3% anymore. So fast forward to now. I'm 5%. Sounds like something you'd frame, right? And hang over the fireplace. We weren't making predictions. We don't do crystal balls in the basement unless mom finds one at a garage sale. But the lesson was dead on. Don't build your financial life assuming today's easy conditions will last forever. In fact, we said it could be a long time before rates are as low as they are today. And in fact 2026, they still haven't come down. So I love that now that we can look back in the past and I think you're going to like this discussion is as well. When warfare stretches online to cyber warfare, not only protect your credit, get your name off all those public lists, cut your subscriptions, and coming in the next couple weeks, track your budget and your net worth all in one place. Seven different things stack benjamin.com vault gets you to our favorite way to put all those things together. The vault. All right, we have a couple more here. Then we have a couple in the middle with Doug's trivia. And that's it for ads. So sit back, relax, get your apparatus ready to take notes because here comes Annie Duke and a couple great headlines as you hear this. I just got back from keynoting the Millionaire Money Mentors conference in Florida. I'm sure I had a great time, even though I haven't gone yet as I record this. But I know wherever any stacking Benjamins people are, it's always a party, isn't it? But what makes it even better party is the fact that when you see pictures of me, those clothes came from quints. I've been getting intentional lately about what I wear day to day and on stage and leaning in more into pieces that feel easy, that are comfortable, that I can travel with and still look put together. It just makes getting dressed simpler. Whether I'm at home or on the road, Quince has been my go to. The fabrics feel elevated, the fits are clean. Everything just works without needing to overthink it. Quince as all the wardrobe staples for spring think 100 European linen shorts and shirts from $34 lightweight, breathable and comfortable, but still look put together and clean. 100 pima cotton tees with a softness that has to be felt. Their pants also hit that same balance. Relaxed and comfortable, but still Polished enough to wear pretty much anywhere. Everything's priced 50 to 80% less than what you'd find at similar brands. Quince works directly with ethical factories and cuts out the middlemen. So you're getting premium materials without the markup. Between the pants that feel so incredibly comfortable. And my favorite is still that first cashmere sweater that I got. It is so nice. It's great to feel good because you know that your wardrobe looks good and it didn't cost anywhere near what I thought clothing that looks like that would cost. It should be the same for you. Refresh your everyday with luxury you'll actually use head to quince.com sb and because you're a stacker, you'll get free shipping on your order and 365 day returns. That's Q U I N C E.comSB for free shipping. 365 day returns. Quint.comSB

[Doug]

you sure this is wise, Abe? It's your money the kid's betting with.

[OG]

That's plenty wise.

[Joe]

We know what we're holding, and we

[OG]

know what you're holding.

[Doug]

You know what we all got.

[OG]

Well, you were looking for that third three, but you forgot that Professor Green

[Joe]

folded it on fourth street and now you're representing that you have it.

[OG]

The DA made his two pair, but he knows they're no good.

[Joe]

Judge Kaplan was trying to squeeze out

[OG]

a diamond flush, but he came up short. And Mr. Eisen is futilely hoping that

[Joe]

his queens are gonna stand.

[Doug]

Live from Joe's mom's basement, it's the Stacking Benjamin Show. I'm Joe's mom's neighbor, Doug, and today is the annual basement poker tournament. Which is timely because today we welcome former poker star and author of the book Thinking In Bets, Annie Duke. Plus, in headlines, parents are betting everything on their kids extracurricular activities. What does that mean for your money? We'll explain. Plus, we'll make the turn with the Haven lifeline and go all in with my amazing trivia. And now, two guys who went all in on 84 off suit. Joe and O J. J. J, J.

[OG]

It was your idea.

[Joe]

I went all in on litecoin off suit.

[OG]

You did? I feel like doing the Dr. Phil with you. How's that working out for you?

[Joe]

Exactly. Hey, welcome. I've got a great capital loss for my taxes this year.

[OG]

Welcome to party time in the basement here. It's poker day because Annie Duke's here.

[Joe]

OG I don't know a gosh darn thing about poker. Have you ever played poker?

[OG]

You know what's funny is we do, like, family poker tournaments at Christmas. We take like, the worst thing. So we open up. We open up our stockings at Christmas, and we take, like, one thing out of our stocking that we really don't love, and we put it up there and then, you know, the winner gets first pick. So. So you're kind of like re exchanging the stuff out of your stocking that you didn't like based on a poker tournament and mom won last year. Yeah.

[Joe]

I've played in one poker tournament ever, and I was definitely the guy there to give everybody else money.

[OG]

You were. You were done in about 20 minutes. I went to.

[Joe]

They let me keep playing. They're like you for like, 20 more bucks, you get back in.

[OG]

Just buy back in. Yeah. What could go wrong? I'll tell you what can't go wrong, OG we're invested in a fantastic show with Annie Duke. Maybe she can teach you how to play poker while she's here.

[Joe]

That would be nice.

[OG]

That would be good.

[Joe]

Win me some money.

[OG]

Yes, but she's here to talk about decision making. As Doug alluded to earlier, making smarter decisions when you don't have all the facts and powerful, powerful stuff that Annie's got. And I think with investing especially, how often do you have all the facts?

[Joe]

Exactly. Zero times.

[OG]

You never have any of the facts. Look at you. Let's get into our headlines.

[Annie Duke]

Hello, darlings. And now it's time for your favorite

[Joe]

part of the show, our Stacking Benjamin's headlines.

[OG]

Our first piece comes to us from the Moneyish blog, this written by Reed Alexander. How about this, OG parents are selling their homes, dropping $100,000 plus to fund kids extracurricular activities. When Shannon, our social media person, sent this to me, she's like, you got to talk about this on the show. Like, parents are dropping $100,000 plus and selling their home so their kids can do extracurricular activities. Reed writes, a lot of extra money goes toward extracurriculars. 40% of American families spend more than a thousand dollars a year on their children's extracurricular activities. And as many as 20% spend over $2,500, according to a newly released survey conducted by Atlanta based SunTrust Bank. To afford these broad ranging expenses for their youngsters, which could include anything from basketball to arts and crafts to coding classes. 42% of parents admit to sacrificing indulgences like dining out. Okay, let's stop right there. I don't see anything wrong with that. Wouldn't I rather have my kids do extracurriculars than go out to eat at a restaurant.

[Joe]

I would maybe you at different restaurants.

[OG]

Apparently 29% say they forego taking vacations. We've done that. We actually have lined up our vacation. We've foregone vacations or we've moved our vacation dates around and we've taken vacations in the place where our kids are going to play extracurricular sports. Yep, 27% defer paying off debt. Trying to think. I think back in the day we did that even when we were aggressively paying off the big mountain of debt we had. And 21% even confessed to skipping on their retirement savings. I've never done that. I always kept that train. That train moving. The values and lessons that these kids learn in sports is incredible. As parents, you have to figure out how to support them in their dreams, said Jennifer Freezer, mom to 11 year old Elise, a figure skater featured in a new commercial airing this week on NBC. During the Olympic Games in South Korea, the Freezer family of Colorado Springs shells out a staggering 60 to $100,000 each year to fund their daughter's passion for figure skating, even though Elise is determined to go to medical school after college and is unsure if she'll continue skating through adulthood.

[Joe]

Is can you have a passion when you're 11?

[OG]

Right. Your life dream Elise's entire life. This is what she wanted to do. But what's funny is it's not. Elise even says, I'm not sure if I want to keep like to be a doctor.

[Joe]

Maybe they should stop figure skating and start spending 60 grand a year and to put it into a college fund because it's going to cost her $400,000 to be a doctor.

[OG]

Well, she'd get a figure skating scholarship, sure.

[Joe]

To the University of Where do you

[OG]

think she'll get older and start skating through her classes?

[Joe]

She's going to show up at her orientation for medical school and they're going to go, okay, so Ms. Elise is going to run you about 100 grand. How do you pay for that? She's like two sow cows.

[OG]

A triple.

[Joe]

I can land a triple. They're like, right? But about the 100,000.

[OG]

If I was her dad, I'd be drinking a triple.

[Joe]

My kids go to a private school and I literally just sat down with them and charted out a spreadsheet of what their tuition costs are through college, making some assumptions in inflation rates and the timing of those and how like, hey there son, when you go to high school, your sister starts kindergarten, which also is another, you know, like kind of illustrating for them that this is not a inexpensive endeavor for us.

[OG]

Right, right.

[Joe]

As a family. And when I ask you to please do the flipping dishes and make your flipping bed once every so often, this is why.

[OG]

You know, it's funny, the gut reaction here that I have, and I think the way the piece is written is kind of made to make you go. Really? Really? That seems kind of. But you know what? If this is their goal, I think that's fine. But I think understanding that trade off ahead of time is the important part. Right. Understand what you're giving up for what you're doing. There's nothing wrong with this goal the way that it is, as long as you know what the other end of that stick is.

[Joe]

Well, and that's true with any financial goal. Right. It's. Very few of us have the opportunity to do everything that we want whenever we want to do it. I mean, life is a series of trade offs. I had a longtime assistant that worked with me for many years, and her and her husband had two daughters, and both of them played sports and travel teams and the AAU stuff and all that sort of stuff. Their oldest daughter went to school and went to a small college, but played hockey. And she. You can't get athletic scholarships in Division 3, but because of her hockey prowess, they kind of made some financial aid available. Right. So that's how they kind of worked the magic there. So she got a lot of school paid for. I know that mom and dad paid for a lot also. And she's a successful business person now. She's in medicine. But the second one did the same thing. Travel, league, all that sort of stuff. Played soccer after a freshman year, went, yeah, I don't want to do this anymore. And that was that. And so I think you're right. You have to weigh the trade off. The other side of this, too, is I wonder how much of this is kind of keeping up with the Joneses. How much of it is the marketing of that. That machine of, like, well, your kid could get a football scholarship if they just go to these camps.

[OG]

Yeah.

[Joe]

You know, and that's kind of put in there as well. And.

[OG]

Well, there's lots of psychological stuff, and I think part of that, too, can be glory days for some of the parents. You know, I certainly. Parents of kids on teams that Nick and Autumn played on, where the parents were living vicariously through their kids. Man. But now, once again, though, we're back at negativity on the goal. No negative. Really? No negative. As long as you understand the trade off, whatever it is, whatever the deal is, that's financially. It is what it is. Our second piece comes to us from CNBC. This is by Diana Olek. Change is a coming. OG says here's how a 5% mortgage rate would roil the US housing market. I love her use of words there. Royal mortgage rates have not been at 5% since 2011. A 5%.

[Joe]

Gosh, seven whole years ago.

[OG]

Listen to this. A 5% rate would cause more than a quarter today's home buyers to slow their plans, according to a Redfin survey. Housing affordability, it's starting to hurt. This piece says mortgage rates are now at their highest levels in four years and poised to move even higher. Timing couldn't be worse as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale. Added all up and affordability is starting to hurt. The average rate on the popular 30 year fixed is now right around 4 1/2 percent. Still low when looking historically, but buyers over the past six years have got more and more used to rates in the 3% range. We don't learn like we, we, we don't learn.

[Joe]

Well, you know, when it comes to housing affordability, which I think is the crux of this, there's only a couple of variables, right? You've got your income and the banks are going to qualify you based on how much income you have. You can maybe sometimes manipulate that a little bit if you had a bonus one year or something like that, but at the end of the day it's a fixed number and then you've got your payment. And what's the payment decided on? Payments decided on how much you borrow versus the interest rate. You know, if you have a really low interest rate, you can kind of borrow a little bit more, which maybe gets you into a little bit nicer, bigger house or something like that. You kind of stretch. People do that. Well, I can barely afford it today, but in 20 years from now I'll totally be able to afford this house.

[OG]

Right? Len Penzo talks about that. Len talks about that with his current house, how he was stretching at the time, but he was betting future raises. And now his house is very affordable. But there's some danger in there.

[Joe]

I think you can. Yeah, I think you can do that to some extent, right? If you're kind of toeing the line, that's totally fine. But you have to remember that all of the stuff that goes into owning a house also increases with the size of the house. Right. If you have a million dollar house and your roof needs replacing, you're replacing a million dollar house, you know, roof, it's not the same thing as replacing $175,000 house roof. Right. So all that maintenance is going to add up and cost a little bit more too. But interest rates go up a little bit, then that affordability is going to change. It's going to force people to either look a little bit lower in their housing prices or delay that goal maybe by having to save a little bit more.

[OG]

I remember three and four years ago when the Fed was threatening to raise interest rates and we were saying then what we'll say now, if you have debt issues and you haven't started locking in your rates, now's the time to lock in your rate. I mean, go from an adjustable rate loan to a fixed rate loan and it's going to hurt. Right. Because a fixed rate loan is going to give you a higher interest rate today. But we're not going to see rates go down for, you know, it might be another five years before we see this, this yield curve turn back the other way. We don't know. It could be a long, long time. So I think the takeaways are number one. We'll start with that one. One more beat of that horse, as mom says, which is, it's not just a horrible phrase. Not good. Head for head for fixed rate loans. Get your debt cleaned up because rates are only going to go higher. And then parents, are you spending tons of money on your kids instead of yourself? Realize that there's a trade off there. And if you're not taking care of you, especially your retirement you, that could get ugly in the end. Annie Duke is someone who makes probably bigger decisions, but more often than 99% of America. Imagine making the decision about the size of deciding whether you're going to buy a three bedroom house or not. Like three times during the same hour. Right.

[Joe]

That's the amount of money you're looking at. Right?

[Doug]

Right.

[Joe]

This is a quarter million dollars. Sure. What the heck. Let's see what that random card is underneath.

[OG]

I'm in. Yes. Yeah, I have no idea what that card is, but I'm in. Annie Duke has devoted her life to the study of decision making under pressure. Listen to this career as a professional poker player, she's won over $4 million in tournaments. Of course that doesn't mean anything because there's endorsements on top of that. Right. That she's got $4 million in tournaments, earned a World Series of poker bracelets. The only woman to have won the World Series of Poker Tournament of Champions and the NBC National Heads up Poker Championship. She's been retired from poker since 2012, and now she is a consultant and speaker on decision making, merging her poker expertise and her graduate level research in psychology at the University of Pennsylvania. So happy she's here talking about making better decisions. Huge. Huge for your money, huge for your career. Annie Duke, coming down to the basement. Hey, Annie. How are you?

[Annie Duke]

I'm good.

[OG]

I'm so glad you're here and you included us on your book tour. You know, it's funny. What are the biggest pitfalls you see people run into when they're trying to make good decisions?

[Annie Duke]

You know what I think the biggest pitfall is that they think that they're searching for certainty in making a decision that they think that they need to know and be 100% certain that it's going to work out the way that they want. And I think that actually creates a lot of big pitfalls in your ability to make a good decision. I think it's a huge barrier.

[OG]

So instead, we should be just comfortable knowing that we'll probably never have all the facts.

[Annie Duke]

Well, we should be comfortable with two things because there's two sources of uncertainty. One is that we're never going to have all the facts. So, like, when I played poker, the cards are face down. And that's just true of pretty much any decision. Like, even if you're just ordering in a restaurant, you decide to order a meal, you just don't have all the facts about. Like, are the ingredients fresh? How is the chef? Is he going to mess it up? We don't know. So, like, even simple decisions we don't have all the facts for. And you get into more complicated things. And obviously there's lots and lots and lots of stuff that we don't know. So that's one of the problems. The other one is there's just luck. I can make a decision that's going to work out 99% of the time, and I can hit the 1%. I can just hit the tail. And you know what? It doesn't work out. So, hey, why don't we be comfortable with the fact that we can never be sure and certain about what our beliefs are? And when it comes to predictions of the future, well, we better get comfortable with luck, because luck always intervenes.

[OG]

I love the story you tell. The very first story in your book about the Super Bowl a couple years ago. Do you mind walking us through that? Because I think that really illustrates what you're talking about.

[Annie Duke]

I will, but only if you'll indulge me, because I happen to live in Philadelphia. So I would like to include a little something about the Philadelphia Eagles in this story, if you don't mind.

[OG]

Is that the probability that cars are going to get overturned and. No, I'm kidding.

[Annie Duke]

Well, that was 100% right. That's the one thing you could be certain of in life. That's the prediction you knew was going to come true.

[OG]

Well, bring it on. Give me a Philadelphia Eagle story.

[Annie Duke]

Well, I'm going to start with the one that you said, and then I'm going to bring the Eagles into it. So I opened the book talking about Pete Carroll on the one yard line of the Patriots because, you know, the Patriots are always in the super bowl, let's be honest.

[OG]

Sure.

[Annie Duke]

Basically, the situation for the Seahawks here is that there's 26 seconds left and they're on second down and they only have one timeout left. You know, so they have a couple chances to get into the end zone here. And everybody expects the expected play is that Pete Carroll is going to call a handoff and Russell Wilson is going to hand off to Marshawn Lynch. Marshawn lynch hopefully will barrel through the defense and score a touchdown, but if he doesn't, they will try that play again, and that will allow them to go up by three because they're down by four. This is. This is for the game here. What happens instead is that Pete Carroll calls a very unexpected play. He has Russell Wilson pass the ball, and I'm sure, as you recall, that play did not work out so well. Malcolm Butler intercepted the ball in the end zone and Seahawks lost by four. So in the book, I ask the audience to do a very simple thought experiment. So I don't know, do you happen to remember just sort of generally what those headlines looked like after that play was intercepted the next day about Pete Carroll?

[OG]

It was, what stupid decision? I can't believe that he would make that decision. That's the dumbest decision of all time, Annie.

[Annie Duke]

Yeah. And in fact, I think that the argument wasn't so much about whether it was a bad decision. It was about whether it was the worst decision in super bowl history or just the worst decision in history, period.

[OG]

That's true.

[Annie Duke]

Right. So what I asked my readers to do is this little thought experiment. I'm going to ask you to do it. What do you think the headlines would have looked like if the ball had gotten caught?

[OG]

Oh, it would have been Absolute genius. He would have been the biggest genius because everybody thought it was going one way. And instead he did something nobody predicted. And the guy is amazing, Right?

[Annie Duke]

And I think that it would have been like he outsmarted Belichick.

[OG]

Right?

[Annie Duke]

So this is. Now you got to indulge me with the Eagles. So I'm really excited because I don't need to ask you to do the thought experiment anymore because the actual experiment happened when the Eagles played at the Patriots. So super similar. It's the end of the second quarter, and you might recall the Eagles are on. The Patriots won the yard line. It's fourth down, and everybody expects the Eagles are up by three here. Everybody expects, obviously, it's fourth and one. They're going to go for the field goal and go up by six. Not only do they not go for the field goal, not only do they attempt to get into the end zone, but they do something really crazy, the Philly special. And they have Nick Foles slide his way out of the quarterback position, waltz into the end zone, and boom, he catches the ball.

[OG]

Nobody's covering it.

[Annie Duke]

So nobody's covering him. I mean, well, he's the quarterback. He sort of moved out of the way. What. So obviously this was a really unexpected and unusual play, and in this case, it got caught. And after the extra point, you know, now the Eagles go up, obviously by 10. What did everybody say about Doug Peterson?

[OG]

Genius.

[Annie Duke]

He's a genius. He outsmarted Belichick in his own game. So I love this because these are really great mirror images of each other. Right? They're unexpected plays on the Patriots 1 yard line. In the case of Pete Carroll, it happens not to work out. In the case of Doug Peterson, it does. And you can see that the headlines are polar opposite based on only what the result of the play. So this actually tells us something really deep about a problem. A big bias that we all have in decision making is that we tie way too closely together the result of the decision, how the result turned out, whether it was good or bad. In determining what the quality of the decision itself was, was the decision good or bad? And you notice that it causes all sorts of problems because just take my word for it from my book, Pete Carroll's decision was actually mathematically quite sound. But everybody was saying it was the worst call in super bowl history. And one would assume now that people would suggest that you change your decision making behavior, because clearly it was a terrible decision. But it's based on just one result. It's like deciding that if I flip A coin once and call heads, and it happens to land heads. That I'm like a genius at flipping coins or something, which I'm not. It was one coin flip.

[OG]

Well, you go through the odds getting back to Pete Carroll, Annie, I think you say that the odds in that situation, there's like a 2% chance historically that that ball was going to be intercepted. So in super bowl history, the chance of that happening was incredibly low, and the result ended up being different. But. But looking at those odds, right, which is the way that you say in the book that we should play our life, looking at those odds. Those were great odds.

[Annie Duke]

Yeah. I mean, look, there's always tail risks, right? Things happen that are bad, that are really, really low percentage to be bad. You can't always protect against the 1 or 2%. Hopefully you're making your decisions based on what's the most mathematically sound decision and not just because you want to protect yourself against the 1 or 2%, which, by the way, you could never do. And the problem is that, particularly if it's unexpected, when that 1 or 2% occurs, we can then go back and say, oh, well, then the decision must have been bad, and we'll start mucking around with a decision that was perfectly good in the first place. But just the fact that the interception there was only like, you know, it's between 1 and 2% to happen automatically tells you that probably it wasn't the worst call in super bowl history. And by the way, what the Seahawks get in return for that is that, well, if the ball is caught, you know, obviously they go up by three, assuming the extra point is good, which is really important because there's going to be, like, no time left on the clock, or if the ball is dropped, they get to stop the clock and they still have one timeout left, and they get to hand it off to Marshawn lynch twice anyway. So it's nearly a free option at the two running plays that everybody wanted them to call in the first place. I mean, this really shows you something deep about human decision making, that we act like we're playing chess, where decisions and outcomes are super, super tightly linked. You make a bad decision in chess, you're probably going to lose the game. But actually, we're more like playing poker, where you can make perfectly good decisions. You can play the best hand, you can have aces, you can do everything right. And you know what? Someone hits a lucky card on the end and you lose.

[OG]

I think this is really super interesting in investing, what we talk about here on the show a lot, Andy, because obviously we've had a very volatile stock market lately. I don't know if you knew that, but.

[Annie Duke]

But I did.

[OG]

But in times like this, there are people that doubt their decisions. Right? Because they do what you warn against, which is they say, oh, maybe I shouldn't have invested in stocks, because look, stocks are down. Well, historically over long periods of time. Stocks and real estate are two fantastic ways to reach your goals. And yet today you've got people going, oh man, I should have never invested. Which is clearly the wrong decision.

[Annie Duke]

Exactly. I mean, I think we don't want to take too much out of the short run. We have this really big problem, which is that we really get zoomed in on what's happening in the moment as opposed to sort of what's happening over the long trend. Right. So let's say that you, you took, you know, some amount of money and last Monday you decided to invest in the stock market. One would assume, I mean, assuming that you're taking a long position or investing in ETFs or an index or whatever it might be, that you're planning to just hold that for the long term. And when you make that decision, it's because you understand that over the long term there should be an upward rise. This should be a pretty good investment. In that case, what happens on Monday shouldn't really matter because it's a pretty momentary fluctuation in the stock market. You can see this. Look, I mean, if you had invested in Berkshire Hathaway in the beginning, obviously you would have done really well over time. And if we can really get that 10,000 foot view over, you know, the 40 some years of that stock, you'll see that it looks like a very, very smooth upward trend. But God forbid that we zoomed in on what that looked like on Monday, we would start to think that Berkshire Hathaway was a terrible investment if that's all we looked at. So we always want to be trying to take the long view as much as possible.

[OG]

One of my favorite parts of your book is where you talk about beliefs and the fact that our beliefs get in the way a ton of. And in fact that sometimes we just completely ignore facts because of our beliefs. Talk to that for a moment.

[Annie Duke]

Sure. So one of the arguments that I make in the book is that really all decisions are bets. Because what really is a bet, right? A bet is I'm going to make some sort of investment of some sort of limited resource, predicting that the future that I'm hurdling myself to is going to turn out better because of it and that's going to be informed by the beliefs that I have. So our decisions are only as good as our beliefs and any decision sounds like bets, right? So we have some sort of belief, we make a decision about it, we choose between A, B or C. And how we're choosing that is we have a certain amount of information, we believe the things we do and then we decide, okay, I'm going to go with option A because I think the future will be better for it. That sounds a lot like a bet because I have to forego B and C and I'm kind of guessing, you know, there's a lot of luck involved there.

[OG]

Right?

[Annie Duke]

So if we know that our decisions are only as good as the beliefs that are informing them, we better try to make sure that our beliefs are accurate, right? That we have the most accurate representation of the world. Because can we agree if you and I bet on something, the person whose belief is better calibrated is going to win on that bet in the long run. Do you agree to that?

[OG]

Absolutely.

[Annie Duke]

Seems pretty non controversial. But here's the problem is that we don't approach the world trying to make sure that our beliefs are accurate. Instead what we do is we try to make sure our beliefs are right. So let me explain what I mean by that. We have a prior, right? I believe something, right? Let's say that I believe that you should always buy in a bear market. Okay? Let's just say I have some overarching belief like that. And what I'm going to do now is I'm going to process information in a way that's just going to try to make sure that I always feel like that belief is right. Which means that when I see situations where it's really worked out investing in a bear market, then I'm going to go and look at that. I'm going to bring that in as a data point to confirm that I'm right. If there's other information out there that maybe says, hmm, that might not be true, look, in this situation, investing in a bear market didn't turn out very well. I either will ignore it, that's one way to get around it, or if you show me that I'll go through all sorts of contortions to try to discredit it, I might try to discredit the source. I might say it wasn't a large enough data sample. I might say that there were unusual outlying market conditions that make that not apply in general and that my general Belief is still true. I mean, you can probably fill in the blanks of the way that you can discredit information that disagrees with you.

[OG]

Which is why you say, Andy, that being smart just makes it worse because your ability then to discredit all facts becomes even worse because your biases are heavier.

[Annie Duke]

That's exactly right. Like, I love that you just pointed that out. So I think a lot of us feel like, okay, but if you tell me that I have this problem, right? If you tell me that I'm going to go find information that confirms my prior and I'm going to go discredit information that doesn't. Well, now that you've told me that I'm good to go now, I'm going to be fine. And also, by the way, I'm a really smart person, and so I can analyze the world really well. And I can obviously really work with data and understand what data is trying to tell you better than the average Joe. So I'm going to give you that. You're a smart guy. Great. That's wonderful. The problem is that that actually makes it worse because what that means is that you can actually spin a story out of the data that makes a lot more sense, right? So you can cut and slice and dice that data in a way that supports your belief a lot better than the average person can. And you can come up with a rationale. Like, if I present you an alternative case, you can come up with all sorts of reasons to discredit the source that someone may be less smart. Couldn't. You can figure out all sorts of arguments about why it's an outlier, why this data set isn't big enough. You know, the N is too small, the statistics that you ran over it weren't Right. Whatever. Those are all very smart things to say. And so the problem is, because we're all really good at being our own best PR agent, right? If you're a smarter PR agent, you're better at the spin,

[OG]

and it's all downhill from there.

[Annie Duke]

Well, yeah. So the good news is that it's not all downhill from there. Obviously, I've painted a pretty bleak picture so far, right? So here's the thing about this, is that you can actually shift your mindset and you can say, look, I don't want to approach the world from this frame of. I want to be right where I just want to confirm what I already believe. Because in the moment, I want to feel like I'm smart and my ideas are correct and bad things that happen in the world aren't my fault, and that I'm just generally a smart and intelligent and believable and competent actor in the world. And I don't want to approach it that way anymore. What I want to do is I want to start to approach the world with the goal of accuracy. What I want to do is view my beliefs, as opposed to this category of right and wrong, as works in progress, being informed by the information that I have thus far, but with this idea that, of course, there's always more to learn, and I can always sort of keep them under construction so that I can always learn more. And once you understand that there's uncertainty in the beliefs that you have and you really wrap your arms around that idea and you embrace it, you have this incredibly open mind to information that disagrees with you. Whereas before, when you were approaching it as a right and wrong problem, you're swatting away information that disagrees with you because you view it as a threat. You view it as a threat to the beliefs that you already have. But if you view your beliefs as under construction, as works in progress, as things to be calibrated now, information that disagrees with you is no longer a threat. It's actually quite helpful to making the building more sound.

[OG]

I think it also makes my life more exciting because then I look at every day as an opportunity to learn more instead of I'm shut off from the world.

[Annie Duke]

Exactly.

[OG]

Makes me a much more powerful person. The book is called Thinking in Bets. Making smarter decisions when you don't have all the facts. By the way, one thing I learned from the forward that I didn't know about you. Your dad was an English professor.

[Annie Duke]

He was.

[OG]

Well, I was an English major. So you got a really cool dad.

[Annie Duke]

Well, you know what? I was an English major in college.

[OG]

Nice.

[Annie Duke]

There you go. I'm in the club.

[OG]

I didn't know that either. Well, and it's funny, your whole background in cognitive psychology, just, of course, that plays into poker and decision making and obviously ends up in this fantastic book. And this is available everywhere, correct?

[Annie Duke]

Yeah. So this is available everywhere in all the normal online places in a bookstore near you. You know, I'm pretty active on Twitter. You can find [e-mail] and of course you'll find links there to be able to order the book. I also have a weekly newsletter and you can go sign up for that. If you go to annaduke.com you can see archives of the newsletter. So you can see if it's actually something that you want to have your inbox every Friday. And you can also find me there just to communicate with me or hire me or lots of ways to interact with me on the website.

[OG]

Good. And if you're out walking the dog on the morning run or on your way to work, I'll have that link on the show [e-mail] what's next for Andy Duke?

[Annie Duke]

You know, I don't know. This is a baby that I've been working on for a long time. So I'm trying to kind of let it out into the world and see what I can do to really enjoy this process. But I'm not going to lie to you. I am trying to think about, well, what's next? I mean, I'm certainly going to continue my speaking career. I do a lot of keynoting and corporate retreats. I do some deep dive consulting. And I'm going to continue to work in that, in the decision space because it's this kind of conversation about how to be a better decision maker is really what's exciting me right now. And I am thinking, you know, do I want to do another book? I don't know for sure yet, but it's on the radar. And then, you know, the other thing is that I'm just trying to think about, you know, how much I want to dive my body back into academics, which is also on the radar. So we'll see. It's uncertain. You're embracing uncertainty in every way because you know what? It's just an accurate representation of the state of the world.

[OG]

Andy Duke, thanks for hanging out with us for a few minutes.

[Annie Duke]

Thank you.

[Doug]

Hey there, poker fans. I'm Joe's mom's neighbor, Doug, and our poker tourney is just starting. Joe's mom, stretching out Gladys from the Sizzler bought three of her friends. I'll have taken money from the sheep. And OG keeps trying to hide cards in his sleeve. Yeah, that's totally OG this is going to get interesting in a hurry. Also interesting is today's trivia question. Which poker player has earned the most winnings during their career? I'll have your answer and an update on all of my poker winning right after the next hand. Hey there, trivia lovers. I'm Joe's mom's neighbor, Doug, and I'm here to tell you I have the perfect strategy for the poker game. After listening to Annie Duke, you know how she says to make better decisions, I just realized all these players are focused on the highest cards in the deck. What if I went the other way and Went for the lowest cards.

[Joe]

Genius.

[Doug]

Yeah, I know. I'll tell ya. Old Doug is about to take everyone's money when I go big with some pocket threes. Alright. Okay, okay. I gotta settle down. I'm going to start practicing that. But before the break, I asked you this question. Which poker player has earned the most winnings during their career? Would you like to wager a guess? I already know the answer. So I'm going all in with Daniel Negrinu. Daniel has won over 36 million since he's gotten in the game. It's decent money, you know, it's okay, but you can't really live on it. Okay, I'm off to perfect affect my low card poker strategy.

[Joe]

See ya,

[OG]

Phil. Hellmuth was a nice guess.

[Joe]

Close, I guess. No cigar.

[OG]

You know it's funny getting back to Annie Duke. By the way, thanks again to Annie Duke for stopping by the basement. You know it's funny OG when people make decisions. It totally is like poker. Like we. We don't know all the facts. We will never know. I love what she has to say there about beliefs. About our beliefs getting the way. I mean you see people that have this. They tie a bad outcome to a bad decision. And I'll give you an example. I've. I've met people before that bought a stock or a fund. Everything they did, their due diligence, they worked hard on it and it didn't go their way over the short term. And not only did they pull out too soon, but they also the lesson they got was investing in stocks is bad.

[Joe]

Yeah. Or I can't do this research on my own or I'm a big idiot or whatever. And that's as damaging, probably more damaging because of the self talk of you're the most trustworthy person you know of and if you keep on telling yourself that you're an idiot, pretty soon you'll try to confirm it.

[OG]

Yeah, yeah. Doug does that every day.

[Joe]

I was gonna say, I was gonna lay it on Doug. I was gonna say I was gonna make some self deprecating joke there. But. But no, that's cool. Let's use Doug.

[OG]

Hey, let's throw out Dave and Lifeline and tackle some of life's, or rather life insurance's most important questions. And somebody who's our billion dollar friend. That's a bad. It's a bad. I don't even know what that means. Our new friend Ethan calling in for help. Say hi Ethan.

[Joe]

Hey Joe and OG Sorry to bother you guys at work, but I have a question. About market cap weighted portfolios. I'm a boglehead and I've always kind of wondered why we weight our portfolios based on market capitalization. It seems easy from a number standpoint, but I don't know that it makes any sense for a return standpoint. Maybe you guys could share your thoughts and settle my fears. Thanks.

[Annie Duke]

Bye.

[OG]

Great question, Ethan. Market cap. So to get to this, dig down just a little bit about what Ethan's talking about. When you invest in The S&P 500, the stuff that's biggest in the S&P 500 is going to be represented as the biggest pieces. So a large chunk of your money in The S&P 500 is going to be in Apple stock as an example. And then the stuff down at the bottom of the S&P 500, you're not going to own that much of it. Same if you buy diamond, if you buy the qs, which is the nasdaq, whatever it might be. So market cap, why invest in a market cap weighted index versus stripping that off and just buying each of the 500?

[Joe]

Well, I think it goes back to the purpose of an index fund, right? So he said that he's a big Vanguard fan. The purpose of an index fund is to track tracking error, right? And what they call that is what's the difference between how this fund performed compared to what the index itself did. And so when you're indexing and you're trying to match the index, then you're going to buy products that match the index that are weighted the same way. There's a lot of research that suggests that there's other factors associated with outperformance or the potential for outperformance. For example, tilting your portfolio toward more well established companies instead of brand new ones or smaller companies instead of bigger ones. Those sorts of things. That three factor model that was made famous by Gene FEMA and Ken French. But when you're tracking the index, which is what Vanguard purports to do, your portfolio is going to look a lot like the index. So it's neither good nor bad. That's the thing you're trying to match. So if you're trying to match something that's all orange, you're painting better be orange if you got a chance to match it. And just as a matter of practicality, I mean, not very few people have the financial wherewithal to go out and buy 500 individual stocks and weight them equally in a portfolio. And even if you did, it's terribly inefficient. Because there are equally weighted S&P 500 funds. What you're trying to solve is already readily available. I think on the open market. You don't have to try to create it on your own. But if you're trying to match the index, if you're traditionally indexing and you go, I want to match the S&P 500, then your portfolio better look a lot like the S&P 500. Otherwise there will be times where it won't match it. Maybe it won't match it for the good, but that's not the purpose of indexing.

[OG]

Thanks for the note. Ethan and Doug also brought down the mail. And here's a note from our new friend John. John says new listener show and absolutely love it. I started two weeks ago and I probably listened to 30 episodes. John is a sick individual.

[Joe]

Oh, gee, I haven't listened to 30 episodes since we started this thing.

[OG]

I don't think Len Penzel's listened to too, and he's been here since the beginning with you and me. I've got some traveling coming up and wanted to get your recommendations or books to read. I really wanted Wealth. Can't wait. But my local library doesn't have it available. I'm 27, married, no debt, and I'm looking for more ways to invest rather than the Roth 401k and Ira roots. Thanks. You know, let's talk about our favorite books. We haven't done that in a little while. I love this question from time to time because for me it's change quite a bit. How about you?

[Joe]

No, my favorite books are still my favorite books. In fact, I'm staring at a couple of them. They're in the exact same spot they were last time we answered this question, which means I probably ought to get them down and thumb through them again. But my favorite books aren't necessarily money books.

[OG]

No, I think he's talking about money books. I want to get recommended bookstore. I really wanted Wealth. Can't wait. So he's talking about money. Let's pretend John wasn't explicit about what type of books. Let's pretend he's talking about money books.

[Joe]

It's a reasonable assumption, I suppose, considering the type of program.

[OG]

It's crazy talk. Let me tell you mine while you're getting your thoughts together. Og, you know my favorite financial book, the most even handed one that I can name is by Rick Edelman. It's called the Truth About Money. Love the Truth About Money. Fantastic book. I also like some books written the last couple years. I'll Tell you anything by our friend Emily Guy Birkin. I really like any of her books. She largely focuses on retirement. So if you're not interested in retirement, John, I wouldn't go there. If you're interested in building wealth quickly, which sounds like what he's talking about. I really like our friend Scott Trench's book Scott over at Biggerpockets. You can go back through our catalog of shows. Scott was on the show last year talking about his book Set for Life. It's broken into three pieces. The first piece is getting your first $25,000. The second is how to get your first hundred thousand and then how to be a bajillionaire. So all three of those. And then Aaron Lowry's book Broke Millennial that also came out last year, a great, great read. So I would point to those four if you just want money stories, good money stories. Bobby Rebel's book about how to be a financial grownup also like that one. But those are just how people that you already know have solved money problems. But much like a Tim Ferriss book where it's, you know, not older Tim Ferriss books, but the most recent one, Tribe of Mentors, where each chapter is just a couple pages, Bobby's book is just a couple of pages on each person. So good stuff there. Oh gee, how about you?

[Joe]

So a couple a little bit older ones that I think are great for rereading money wise and then just kind of slightly off the money, just a different angle. I think both books by Carl Richards. So Behavior Gap and the One Page Financial Plan I think are great. Maybe a little more starter esque type books, especially the one Page Financial Plan, I think. But the Behavior Gap is I think, a really important one to recognize how our mind kind of just helps us or hurts us with that. To play on our topic from today, the third book I really liked was a book written by a hedge fund manager, David Einhorn. I think the book's called Fooling Some of the People all of the Time, which is he runs a long short hedge fund in the east coast. And this book is all about how he played the long game with a position that he knew wasn't correct. And it's kind of all about the lengths at which companies will go to continue their propaganda machine of, hey, everything's great. And here's this hedge fund manager that goes, nah, I looked at the numbers, not great. And they're like, yeah, we're going to sue you because you're, you know, it's blasphemy. We're doing fine. And he's like, no, you're not. And let me show you why. And you know, and so here's this hedge fund manager that's kind of betting, you know, kind of betting the house, I guess, so to speak. Obviously, the Big Short is a great money book too.

[OG]

Yeah. Any of those money.

[Joe]

But story around it.

[OG]

Any of those Michael Lewis books are great money stories. Probability stories. Even the Oakland A's one is Moneyball is. Is fantastic about probability. Speaking of Annie Duke.

[Joe]

Oh, yeah. Probabilities. I think my favorite money book that's kind of a slightly different angle is a book by John Warlow called Built to Sell.

[OG]

Sure.

[Joe]

Personally, I love parable books like where you're the protagonist. Right. It's like you can put yourself in that guy's shoes and you're the architect trying to grow his firm and trying to sell it and the steps that you can do. So depending on what you're doing money wise, you know, if you're, if you're just looking to invest money in the stock market, that's fine. If you're a business owner trying to turn your business into something that can be sellable, obviously any of the big ones, stocks for the long run. Like Warren Buffett's biography, anything by Peter Lynch.

[OG]

Yeah.

[Joe]

Learning about how other people have done. Here's the thing with money. The recipe is already there. There's been thousands of successful financial people in the world. They've. And many of them have written down their recipe card. Here's what I did. Step by step by step by step. And it's like baking a good chocolate cake. You just follow the recipe, you know, and you can have the same chocolate cake. So I like learning from those people. Kind of like that Tim Ferriss book, right. Where he just takes a whole bunch of interviews and goes, here's the best people in the world at this thing.

[OG]

I'm digging in that one right now. Tools of Titans. Enjoying that. I just take one of the reads with me at breakfast and I sit and read it while I'm having my breakfast and it puts in place.

[Joe]

I think I loan my copy to our business partner. And frame of mind, hopefully it makes its way back here.

[OG]

Oh, you're right. You know what yours is Tools Titans. Mine's tribe of mentors. I've got the. I got the new new.

[Joe]

Yeah, you've got the newest one.

[OG]

You got the new one. I got the new new one. Right. And on business books, you know, it

[Joe]

could go on for days on business.

[OG]

I know our friend Deacon Hayes talks about one of the ways to wealth is to be a good entrepreneur. And the book all about that, of course, is the E. Myth, is. Is fantastic. And when you get into the E. Myth, you realize it's about processes. So that book leads you immediately to a book called the Goal, which is about process and logistics. Yeah. Yeah. But still heavier, I think.

[Joe]

But a parable book.

[OG]

I think it's still pretty easy to read. I mean, I just want to know if he was going to save the company or not. That's like, I was so interested in that.

[Joe]

It's a parable, so. Yeah, it is. You can. You can play it as a. As a movie. You're watching a movie in your mind.

[OG]

Yeah.

[Joe]

Rather than just like learning charts and

[OG]

graphs, you can apply it to you or you can just read the story. And. And it's a story about a company that's failing and they got to get it back together. So the Goal and E Myth, I think, are like books one and two when it comes to running a business. And it's telling, by the way, that when I was at American Express, that the CEO of American Express at that time, Ken Chanel, even said it was his favorite book. Like, I'm running.

[Joe]

You guys are two peas in a pod there.

[OG]

Well, I'm just saying I'm running a little, tiny company. You know, at that time, he's running this behemoth company, and he's pointing it out as the number one book, even for huge businesses.

[Joe]

He probably got it from you.

[OG]

He probably did. I know that, that, that.

[Joe]

I mean, you were. You were talking to Kenny and that crazy Ken, like, hey, hey, Kenny, what's up? He's like, hey, what are you reading these days, Joe? I need something for the executive team, Right?

[OG]

So we're making the turn at the ninth hole, and I go to my buddy Kenny and say, hey, yeah, hey, dude. Yeah, thanks for. For the question, John. If you've got a question for us, I'll tell you what you do. Head to Stack your Benjamin's dot com, and right there at the top, you'll see questions for the show. You can click on that link and bada boom, bada bing. You'll see all the different ways to leave us a question. Thanks to everybody who's left a review of the show. Mom puts those on the refrigerator and kind of brags a little bit about the show. So that's very nice to everybody that tells people what they're getting into when they listen to Stacking Benjamins coming up on Wednesday. Tell you we've got to get a great show for you then. Loved having Annie Duke. Here we have Scott Gerber. He is himself a super connector. We're going to talk about networking and it's funny if Scott's listening right now, oh, gee. You'll know that Scott just threw open his mouth a little bit because he does not like networking. He loves connecting and he's going to talk about the difference and how you can make yourself talk about a great way to make a lot of money. Become a connector. Talk about that on Wednesday. Go Stacks and Benjamins. Doug, what should we have learned today, man?

[Doug]

So what did we learn today? I'll tell you what I learned today. I know OG's tell is when he twists apart an Oreo. And I know Joe likes to splash the pot, if you know what I mean.

[Annie Duke]

What?

[Doug]

Oh, yeah, the show. Okay, sorry. What did we learn about money today? First, let's take some advice from Annie Duke. Worried about being right? Maybe. Maybe it's more fun and a better option to be correct. Instead, you'll welcome new information and make better decisions not just with your investments, but also with your life. Second, dropping huge money on your kids extracurriculars. Remember, there isn't a loan for retirement. Spend away on the young ones, but not at the expense of your future. But the big lesson, when someone lets slip that they're gonna have a royal flush, they're not talking about their. Well, let's just say there was some miscommunication during today's poker game. Special thanks to Annie Duke for joining us. You'll find her book Thinking in Bets wherever books are sold. This show was created by Joe Salsihai, produced by Richie Rudder Reese and engineered by the amazing Steve Stewart. Kathleen Selmans handles design, newsletter, letter and classroom opportunities. If you'd like to learn more, head to stackingbenjamins.com classes online. Visit us on Twitter at sbenjaminscast or on our Facebook page. Shannon Cowan is our community manager and social media guru. I'm Joe's mom's neighbor, Doug, and I'm pretty much the guy in charge of everything around here. Trust me, this well oiled machine did get like this all by itself. SB Podcasts may receive payment on the show from sponsors and guests in the form of books, giveaway items, discounts, or other remuneration. There's no way you would take advice from these dorks. But like Joe's mom always says, don't take advice from people you don't know. This show is for entertainment purposes only and before making any financial moves, consult with a real financial advisor. Thanks to Joe's mom for helping me with the rebuy. After the royal flush incident, she offered 20% interest, so I took advantage of that. Man, she is sometimes just a little too generous for her own good.

[OG]

Welcome to the after show. You know, we were talking earlier OG about parents selling their homes, dropping 100,000 bucks to fund kids extracurricular activities. I saw this and thought of a story a friend of mine told me immediately, which, which is. So it's like the icing on the cake that you're talking about when these extracurriculars are selling the dream, right? Oh yeah, selling the dream.

[Joe]

You do this, then give us 50 grand over the course of the next 10 years and maybe you won't have to give the colleges 50 grand.

[OG]

Friends of mine had kids that played hockey being in Detroit and they had ice time at 11 o' clock at night. Like for a nine year old, 11 o' clock at night playing a hockey game. So we, we had our kids, we didn't do any of that. We had our kids in this soccer league where you went to the same field all the time and they divvied the kids up into groups and you know, there were, there were some like junior high kids or high school kids that were the officials. You know, it was what it was, it was a home soccer league. Maybe there were four or five different fields in the area and you just went there. That wasn't a big deal. But travel soccer in southeast Michigan, I'm sure in a lot of communities around the world was huge. And we would get solicited all the time for travel soccer. And in southeast Michigan, I remember there's a big, a big soccer club called Varder, which I saw the Varter stickers on people's cars and people would tell me how great Varter was or how horrible. I don't know anything about Varter. I just know Varter. But we were in blazer country where I lived. So the blazers, we get stuff from, hey, try out for the Blazers. Try out for the Blazers. And we never did because travel, you know.

[Joe]

Yeah. You weren't going to do this stuff. Yeah, I'm going to do the hundred grand.

[OG]

Yeah, wasn't. No thank you. And I don't want every weekend taken up by. I'm traveling to XY City now. We did it for running some, but only at a certain time of year over a few weeks. I wasn't going to do it constantly. Like my friends were their kids. So my Buddy, his kid is a little younger than my kids. He and I had talks about soccer, and he gets this thing from the Blazers that says try out. And he thought, well, I. I didn't know you had to try out. Apparently, Joe's kids are pretty good at soccer, that they're on these soccer teams. He knows nothing about it, so puts it on the calendar that his son is going to go to this soccer tryout. Turns out that weekend, his wife is out of town on a business trip, and his son gets invited to a sleepover the night before. And his son, who I know is a very good kid, but this particular day, he's been up all night, and now he's in the car, and Doug's taking him to soccer tryouts, and the kid is just running on fumes, not having it. Won't stop crying. Being just how kids can be. I'm not doing it. I don't want to play soccer. You can't make me. Why are we doing this? And he pulls in to the parking lot. He sees all the kids milling around there. He even goes around to the back seat and tries to get his kid out of the car. And his kid's just throwing a tantrum. And I know his spouse. And if his spouse had been there, his spouse would have dragged the kid out of the car. Like, one of these parents in the piece would have dragged the kid out of the car and forced the kid over there and made him. Made him participate. And also would have watched the whole time. And his kid would have been sweating bullets, like, making sure that mom wasn't unhappy. So the kid would have done it. But my buddy's not that way. My buddy much more laid back, and he's like, you know what? Kid doesn't want to play soccer. I don't want to deal with this crap. Forget it. We're going home. But he has to run a couple errands. It takes a little long. Then they end up out for lunch because the errands run long. Then he looks and he's like, oh, shoot, I got to go pick up my wife at the airport. So he goes to the airport, which is across town, Comes all the way back. Well, after these hours go by, kid's been sleeping in the back seat, by the way, half the day. He gets back home, and he's got the light blinking on his home phone, because I'm an old guy, and I lived in the time when people had home phones, and there's the lights blinking on his voicemail. So he hits the button and it's some salesman. Then he hits the button again for the next one and it's this. Hey, this is coach Green from Blazers soccer. Got to tell you, we loved what we saw out of your son. Insert name here today, out there on the field. Want to offer him a spot on the team. Congratulations. Got a hard working kid there and we're very happy he's going to be a part of Blazer Soccer

[Joe]

marketing machine.

[OG]

It turns out Blazer soccer has like an A team, a B team, a C team, a D team, an E team and everything.

[Joe]

Team.

[OG]

Yes. If you've got money, they're going to rate.

[Joe]

If you can write the check, you can be on the team you are in.

[OG]

Yeah. And that's when my buddy realized the truth isn't what you think it is.

[Joe]

Yep.

[OG]

How great is that? We loved what we saw out of your son today.

[Joe]

OG Your son was. Insert name here. Fantastic. It would have been better if he would have just read the insert.

[OG]

The insert name here. Yeah, that would have been great. It's so funny. Well, you're, you're. Let's change topics here a little bit. You're excited about TV Land right now.

[Joe]

Do yourself a favor and watch this program.

[OG]

This is coming soon.

[Joe]

No, it's out.

[OG]

Oh, is it out?

[Joe]

Yes. See episodes. I'm six episodes deep in it. It's fantastic. It's called LA to Vegas. You want to do the autos, Allen?

[OG]

Yeah.

[Joe]

No. You never touch this. This is Captain Dave time.

[OG]

Good afternoon everyone.

[Joe]

I'd like to welcome you on Jackpot Airlines Flight 1610 service to lost wages. Why aren't you laughing?

[OG]

I've heard it like 1200 times. Ronnie.

[Annie Duke]

Artem, what's the problem?

[OG]

There's a baby man sitting in my seat. If I sit here, I lose. If I sit, I win.

[Annie Duke]

Anybody sitting next to an unoccupied seat and is willing to move gets free beer.

[OG]

You.

[Annie Duke]

Not you.

[Joe]

All right, gentlemen, it's time to get high and also fly this old bird. Just a little captain's joke. I never get high when I'm flying unless I mistime the edible.

[Annie Duke]

You really think that's a good use of everyone's time?

[Joe]

If I can't have some fun with my passengers, why am I here?

[Annie Duke]

To fly the floor plane. Go do that.

[OG]

Only to fly the plane. Yeah. And by the way, the woman that got up for the free beer was pregnant.

[Joe]

Of course. Very pregnant. As a matter of fact, yes. This show is so friggin hilarious. It is ultra stereotypy. So? So everybody does exactly what Their stereotype would tell you that they would do. Which in today's day and age, I'm surprised it's.

[OG]

It's on tv, on the air. Surprised it made it.

[Joe]

Maybe it's because they make fun of everybody.

[OG]

Yeah.

[Joe]

But gosh darn it. So funny. 22 minutes on Hulu without commercials. Oh, joke.

[OG]

I need this show.

[Joe]

Joke, joke, joke. Show over.

[OG]

Were you the one that told me about the Consultants show with Kristen Bell and Don Cheadle? I started watching that and I only watched like one episode of that.

[Joe]

That's really good too. But I got in the second or third series. I kind of. Second or third season kind of took a weird turn and I just kind of kind of fell.

[OG]

Even in season one.

[Joe]

Lots of lies.

[OG]

Yeah, even in season one. I was having some trouble with. Sometimes it was serious, but I was a humor and I was having trouble going back and forth, like figuring out where the show really was.

[Joe]

Yeah, there's kind of some weird stories going in, storylines in there for sure. And it's R rated. So you, you know, you can't just have it on, you know. Yeah, this is, this is on Fox. I don't know when, but it's on Hulu. So just watch it on Hulu. If you are not laughing in tears,

[OG]

something's wrong with you.

[Joe]

I think so. I mean, it's fantastic.

[OG]

Yeah.

[Joe]

So funny.

[OG]

Good stuff.

[Joe]

LA to Vegas.