People Dumber Than You Are Making Millions

Summary

In this video, the narrator recounts meeting a tattooed, bearded traveler who, despite appearing to live a carefree life, is a successful entrepreneur owning properties and businesses. The video challenges four common beliefs that hinder smart people from getting rich: the disdain for money, fear of looking stupid, overestimation of risk, and the curse of intelligence. It emphasizes the importance of playing the 'money game' with a clear definition of success, taking risks, and not quitting. The secret to success? Start and don't stop, regardless of intelligence, as perseverance can turn a perceived 'idiot' into a genius.

Takeaways

• 💡 The speaker initially thought that intelligence was a prerequisite for wealth, but later learned that many successful entrepreneurs are not necessarily exceptionally intelligent.
• 🏛️ The speaker met a tattooed man who owned multiple properties and businesses, challenging the speaker's preconceived notions about wealth and intelligence.
• 🌐 A study from Sweden suggests that there is a plateau in cognitive abilities among top earners, indicating that being exceptionally smart is not a requirement for making a lot of money.
• 💭 The first limiting belief discussed is the notion that caring about money is shallow or greedy, which can prevent people from pursuing wealth.
• 🚫 The second belief is the fear of looking stupid or failing, which can deter smart people from taking risks that could lead to financial success.
• 🤔 The third limiting belief is the overestimation of risk by smart people, which can lead to inaction and missed opportunities.
• 🧠 The fourth limiting belief is the awareness of what one doesn't know (the Dunning-Kruger effect), which can prevent smart people from taking action due to perceived incompetence.
• 🎯 The speaker encourages viewers to redefine their view of success and to not let the fear of failure or the pursuit of perfection hold them back.
• 🚀 The importance of taking action and getting into the 'arena' is emphasized, as most people won't take the risk due to limiting beliefs.
• 🔄 The speaker points out that the ability to imagine worst-case scenarios does not equate to an accurate assessment of risk, and that humans are often poor at calculating probabilities.
• 💼 The 'curse of intelligence' is described as a double-edged sword, where smart people's ability to foresee potential pitfalls can prevent them from taking necessary risks.
• 🏆 The secret of success, as learned from a billionaire, is perseverance and the belief in one's abilities despite setbacks and the perception of others.

Q & A

What was the narrator's initial perception of the man with tattoos and a beard?

The narrator initially thought the man was either a drug dealer or financing his lifestyle with a credit card and accumulating massive debt due to his carefree lifestyle and lack of a traditional job.

What were the man's actual sources of income?

The man owned five apartment buildings, ran a shop fixing up old Harleys he bought off Craigslist, and built a recording studio for musicians in his garage.

What did the narrator learn about the correlation between intelligence and wealth from the man's story?

The narrator learned that being smart is not necessarily a prerequisite for making big money, as the man was of average intelligence but very successful.

What study from Sweden is mentioned in the script, and what does it conclude?

The study mentioned is about the plateauing of cognitive ability among top earners, which concludes that there is a drop in cognitive abilities corresponding to the top 5% of earners.

What are the four limiting beliefs discussed in the script that keep smart people from getting rich?

The four limiting beliefs are: 1) I don't care about money, 2) I'm afraid of looking stupid, 3) It's too risky, and 4) I don't know what I don't know.

Why do some people say they don't care about money?

Some people say they don't care about money because they believe that caring about money is shallow, greedy, and materialistic, and they want to distance themselves from societal pressures and misconceptions about status and value.

How does the fear of looking stupid affect smart people's approach to making money?

The fear of looking stupid can prevent smart people from taking risks and trying new things, as they are more concerned about maintaining their identity and reputation as intelligent individuals.

What is the 'curse of intelligence' mentioned in the script?

The 'curse of intelligence' refers to the tendency of smart people to overestimate risks and imagine all the things that could go wrong, which can prevent them from taking the actions that could lead to success.

What is the Dunning-Kruger effect, and how does it relate to smart people and their approach to making money?

The Dunning-Kruger effect is a cognitive bias where people with low competence in a domain tend to overestimate their abilities, while those with high competence tend to underestimate them. Smart people may get hung up on what they don't know, leading to inaction, whereas less knowledgeable individuals may take more risks due to their overestimation of abilities.

What is the 'secret of success' shared by the narrator after meeting a billionaire?

The 'secret of success' is that you can't win if you don't start, and you can't lose if you don't quit. It emphasizes the importance of taking action and perseverance despite the challenges and the perception of others.

How does the narrator suggest re-framing the perception of risk to overcome the fear of failure?

The narrator suggests re-framing the perception of risk by reminding oneself that the risk of mediocrity is greater than the risk of failure, which can help overcome the fear of failure and encourage taking action.

Outlines

00:00

🤔 Encounter with an Entrepreneur

In this paragraph, the narrator recounts a pivotal encounter with a tattooed, bearded man dressed in black at a climbing gym. This individual, who had no formal education and no job for years, lived a carefree lifestyle traveling the world. The narrator's initial suspicion that the man was a drug dealer or in massive debt was proven wrong when he discovered the man was an entrepreneur with multiple income streams, including owning apartment buildings, a Harley repair shop, and a recording studio. This encounter sparked a curiosity about the secret to the man's success, leading to a realization that intelligence is not the key to wealth, as supported by a Swedish study showing a plateauing of cognitive ability among top earners.

05:00

💡 Rethinking the Money Mindset

The second paragraph delves into the societal misconceptions about money and success. The narrator challenges the belief that one must be smart to make money, pointing out that societal status symbols do not equate to value. They argue that many people disengage from the pursuit of wealth due to a flawed view of money, which they believe is a game that everyone must participate in. The narrator emphasizes the importance of redefining one's relationship with money and understanding that financial success can enable a greater positive impact on the world. They also introduce the idea that smart people may be held back by their fear of looking stupid, which can prevent them from taking risks necessary for wealth creation.

10:01

🚀 Overcoming the Fear of Failure

In this section, the narrator discusses the fear of failure and the underestimated risks taken by those perceived as less intelligent. They explain that being underestimated can be a motivator and a freedom to take risks without the fear of losing status. The narrator contrasts this with the high expectations placed on intelligent individuals, which can lead to a fear of failure that prevents them from pursuing unconventional paths to wealth. They argue that the ability to predict and plan for potential outcomes is a double-edged sword, as it can lead to overestimating risks and underestimating one's ability to succeed. The narrator encourages viewers to redefine their understanding of risk and to embrace the potential for success over the fear of failure.

🧠 The Curse of Intelligence and the Dunning-Kruger Effect

The final paragraph explores the concept of the 'curse of intelligence,' where smart people's ability to foresee potential pitfalls can prevent them from taking risks. The narrator introduces the Dunning-Kruger effect, explaining how people with limited knowledge in a domain tend to overestimate their abilities, while those with more knowledge tend to underestimate them. They discuss the four stages of competence, highlighting how smart people, being in the stages of conscious incompetence or conscious competence, may be more aware of what they do not know and thus hesitate to act. The narrator concludes with the 'secret of success' learned from a billionaire: persistence and the belief in one's abilities despite challenges and setbacks, emphasizing that success comes from taking action and not giving up.

Keywords

💡Entrepreneur

An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. In the video, the man with the beard is described as a true entrepreneur because he owns multiple properties, runs a shop fixing up old Harleys, and has built a recording studio in his garage. His story exemplifies the entrepreneurial spirit of innovation and self-reliance.

💡Cognitive Ability

Cognitive ability refers to the various aspects of mental capacity, including memory, attention, and problem-solving skills. The video mentions a study from Sweden that suggests there is a plateauing of cognitive ability among top earners, indicating that being exceptionally smart is not a prerequisite for wealth accumulation.

💡Limiting Beliefs

Limiting beliefs are fixed mindsets that hinder personal growth and success. The video outlines four such beliefs that prevent smart people from getting rich, such as the belief that one does not care about money or is afraid of looking stupid. These beliefs are challenged as the video progresses, encouraging viewers to reconsider their own mindsets.

💡Risk

Risk is the possibility of an event occurring that will have a negative effect on objectives. The video discusses how smart people tend to overestimate risk and how this can prevent them from taking the entrepreneurial leaps necessary for wealth creation. It contrasts this with 'dumb' people who may underestimate risk and thus are more likely to take action.

💡Dunning-Kruger Effect

The Dunning-Kruger effect is a cognitive bias where people with low ability at a task overestimate their ability, while people with high ability underestimate their competence. The video uses this concept to explain why smart people might not take risks in business, as they are aware of what they do not know and may hesitate to act.

💡Unconscious Incompetence

Unconscious incompetence is a stage of learning where a person does not understand or know how to do something and is unaware of their incompetence. The video references this concept to illustrate how people might overestimate their abilities when they are ignorant of their own lack of knowledge.

💡Conscious Incompetence

Conscious incompetence is the stage of learning where one becomes aware of their lack of knowledge or skills in a particular area. The video suggests that as people become more aware of what they do not know, they may underestimate their abilities, which can be a barrier to taking action.

💡Conscious Competence

Conscious competence is the stage where a person has acquired a certain level of knowledge or skill but still needs to think consciously to perform the task. The video implies that being in this stage can make smart people overly cautious, as they are aware of the effort required to perform at a high level.

💡Unconscious Competence

Unconscious competence, also known as mastery, is the stage where skills are so ingrained that they can be performed without conscious thought. The video suggests that reaching this level in a few areas is rare and requires significant effort, but it is where true expertise lies.

💡Mediocrity

Mediocrity refers to a state of being average or ordinary, without distinction. The video argues that the risk of remaining mediocre is greater than the risk of failure, encouraging viewers to take risks and strive for success rather than settling for an unremarkable life.

💡Success Secret

The success secret mentioned in the video is the idea that persistence and not quitting are key to achieving success. It is illustrated by the story of a billionaire who, despite looking like an idiot to others, continued to believe in his vision until it finally paid off, transforming him from a fool to a genius in the eyes of others.

Highlights

The narrator met a free-spirited man with a carefree lifestyle, sparking curiosity about how he affords his adventures.

Contrary to initial assumptions, the man is a successful entrepreneur with multiple income streams, including real estate and a motorcycle shop.

The narrator challenges the belief that intelligence is necessary for wealth, citing a Swedish study showing a plateau in cognitive abilities among top earners.

Four limiting beliefs that prevent smart people from getting rich are introduced as the main focus of the video.

The first belief discussed is the dismissive attitude towards money, which the narrator argues is a barrier to playing the 'money game' effectively.

The societal equation of money with status and value is critiqued as flawed, leading to a problematic relationship with money.

The narrator's personal realization that money is essential for survival and one must define their own 'winning' in the money game.

The second limiting belief is the fear of looking stupid, which can prevent smart people from taking risks due to the pressure of meeting expectations.

The advantage of being underestimated is explored, as it can motivate and free individuals to take bold actions without fear of judgment.

The third belief, that taking risks is too dangerous, is countered by arguing that smart people often overestimate risks due to their ability to foresee potential problems.

The 'curse of intelligence' is introduced, suggesting that the ability to predict outcomes can lead to inaction due to fear of failure.

The fourth limiting belief is the lack of awareness of one's own ignorance, which can prevent smart people from taking action due to perceived gaps in knowledge.

The Dunning-Kruger effect is explained, showing how competence can lead to an underestimation of one's abilities, while lack of competence can lead to overestimation.

The narrator shares a personal anecdote about meeting a billionaire who exemplified persistence and the ability to continue despite looking foolish.

The 'secret of success' is revealed to be the combination of starting and not quitting, regardless of one's level of intelligence.

The video concludes with an encouragement to viewers to take action, redefine their relationship with money, and challenge limiting beliefs.

Transcripts

so 12 years ago I'm working at a

Climbing Gym making minimum wage when

one day this guy walks in he's dressed

head to toe in Black every inch of

exposed skin is covered in tattoos and

he's got this gigantic beard so we get

to chat and he he tells me about his

life how he dropped out of school hasn't

had a job in years and he just spends

all of his time traveling the world on

one random ass Adventure after another

like hiking the John Mir Trail or biking

across the country or surfing down in

Bali and I'm sitting here scratching my

head cuz at this point I'm 28 and I'm

living in a van because I got $80,000 of

debt and I'm just trying to figure out

how is this guy affording this crazy

Carefree lifestyle and my initial

reaction was to think he was either a

drug dealer or doing something stupid by

just financing his life with a credit

card and racking up massive debt but

turns out on both accounts I was dead

wrong this dude owned five apartment

buildings he ran a shop where he would

fix up old Harley that he would buy off

Craigslist and he built a recording

studio for musicians in his garage he

was was the first true breed

entrepreneur I ever met and I remember

thinking what the hell is this guy's

secret like what makes him so special

because as he himself was quick to point

out he really wasn't particularly Smart

in fact on like the BT curve of

intelligence he was probably smack dab

in the middle and it just kind of threw

me because my whole worldview I guess in

the back of my mind I always thought

that you had to be smart to make big

money the truth is the richest people in

the world they're not necessarily any

smarter than you or me in fact a study

out of Sweden called the plateauing of

cognitive ability among top earners

confirms this they found that there's

actually a drop in cognitive abilities

corresponding to the top 5% of earners

so in this video I'm going to break down

why exactly that is why people like me

who are most likely dumber than you are

making millions and to do that we're

going to unpack four limiting beliefs

that keep smart people from getting rich

and then at the end of the video I'm

going to share with you the secret of

success that I learned after having

lunch with a

billionaire

[Music]

so let's dive in the first limiting

belief is this I don't care about money

listen our society has a very

problematic relationship with money on

the one hand it's often used to Signal

status because we as a culture

mistakenly equate status with value and

this is why keeping up with the Joneses

is such a damn problem you might not

really care about getting that new fancy

car but if the neighbors have one then

that means they have more status and

therefore they must be more valuable to

society right well no of course not

saying it out loud just draws attention

to how stupid that sounds the truth is

it doesn't actually matter these things

they signal status but they don't

actually make you more valuable and I

think deep down we all understand this

and so a lot of people just do what I

did and they decide the game is broken

and stupid and they stop playing it all

together because after all the only

people who care about making money are

shallow greedy and materialistic right

well no it's it's actually wrong but

believing this gives you the permission

to not even try and the result of this

mindset for me at least was that my life

really sucked and I had no way of

providing for myself my family or my

community which made me feel terrible

about myself cuz I just felt like a

drain on everybody around me and it was

around this time that I realized the

fundamental truth you can't actually opt

out of the money game like it or not you

need money to survive so the real

question isn't whether or not you're

going to play the money game but how are

you going to play the money game and

truly answering that question in a way

that transformed my pursuit of money

into something greater than my desire

for status or material things that was

the key to unlocking my earning

potential so I encourage you to ask

yourself if you weren't limited by money

what impact could you have on the world

now the only way to not be limited by

money is to win the money game for

yourself and you can Define what winning

looks like in whatever way you want but

for me I Define it as just getting to

the point on your financial Journey

where money is no longer the limiting

factor in any of the decisions you make

now regardless of how you define winning

and how you decide you're going to play

the money game one thing is universal to

win you're going to have to put yourself

out there you're going to have to get in

the arena and you're going to have to

actually try and that might sound

painfully obvious but most people won't

do it because of the second limiting

belief that keeps smart people from

making money which is this I'm afraid of

looking stupid one of the reasons dumb

people have an advantage when it comes

to making money is because everybody

underestimates them they think that

guy's dumber than a box of rocks he's

never going to amount to anything he'd

be lucky to get a job at 7-Eleven now

two interesting things happen when

people underestimate you first it puts a

chip on your shoulder to prove everybody

wrong and that can be a powerful

motivator second it frees you up to try

anything cuz who really cares if you

fail people have already written you off

I mean what you got to lose it's great

to be the underdog nobody expects you to

win you've got nothing but potential

upside smart people on the other hand

well they have the opposite problem they

have nothing but downside because

everybody expects them to be wildly

successful in everything they do which

is obviously impossible but smart people

are now in a no- win situation because

if they try something crazy and it fails

then their very identity as a smart

person is at risk so the only smart move

that protects this identity is to follow

the well trodden path that everybody

else is following you go to school you

get your job you bust your ass for 40

years and then you retire and don't get

me wrong this can provide a great

lifestyle which is absolutely right for

most people but if you want to get rich

you can't follow com wisdom and expect

to get uncommon results you have to do

something different now the problem with

doing something different is that most

people perceive it to be risky what even

is risk how do we Define it like how do

you even measure it I mean you might

look at the guy climbing on a cliff and

think he's a reckless Daredevil whereas

he might look at you speeding down the

freeway in traffic and think you're

crazy and the truth is you're both crazy

Risk Takers we all are there's no way of

navigating this thing called life

without taking risk but something I've

come to notice is that dumb people tend

to underestimate risk whereas smart

people tend to overestimate it and this

leads to the third limiting belief that

holds smart people back from making

millions it's this it's too risky now

don't get me wrong the ability to run

simulations in our mind to predict what

may or may not happen in the future and

then plan accordingly this is the

perennial superpower that separates

humans from literally every other animal

on the planet but there's a problem with

this superpower it tends to skew towards

pessimism which makes sense if you think

about it from an evolutionary

perspective our ancestors were the ones

who survive long enough to pass on their

genes and one of the great survival

mechanisms when you're out on the

Savannah is just to assume pretty much

everything is trying to kill you if you

hear something rustling in the weeds you

should probably assume it's a tiger and

run away because if you're wrong you

just look silly running from the breeze

but if you're right then you ain't dead

so all that's to say we've evolved to

always assume the worst case scenario

now historically intelligence was a

great attribute in surviving out in the

wilderness because the smartest people

amongst us were the most capable of

calculating all the things that could

potentially go wrong therefore they were

more likely to survive because they were

better at avoiding taking risks that

could get them killed all told this

strategy kept our species alive for

Millennia so I'm not going to knock it

but it's important to recognize that the

game has changed over the past Century

as we've modernized as a society and

truly the number of existential threats

that you face on a daily basis is

practically zero compared to your

ancesters these days the punishment for

taking risks and guessing wrong is far

less severe as well maybe you lose some

money maybe you lose some status you got

to live in the back of a van for a while

and you start over but ultimately taking

risk to make money assuming you're not

doing anything illegal is unlikely to

end in any type of catastrophic ruin

that you can't recover from which is why

dumb people have an advantage when it

comes to making money these days because

often they're just ignorant of all the

things that could go wrong whereas smart

people they can see it all so clearly in

their mind and it stops them from ever

even getting in the game I call this the

curse of intelligence which I'll explain

more in just a second but before I do

it's important that you understand one

thing you are probably very good at

imagining all the things that can go

wrong right but studies show that humans

are really really terrible at

calculating the probability of those

events actually occurring I mean how

much time have you ever spent thinking

about worst case scenarios that never

came to fruition my guess is it's a lot

because the thing is worst case scenario

almost never actually happens so we

spend all this time worrying about

things that are unlikely to happen but

even worse we allow our fear of those

downsides to stop us from taking the

actions which would in all likelihood

lead to an amazing positive outcome now

I used to really struggle with this but

here's just a simple reframe that's

helped me get out of my own head when it

comes to calculating risk it's just to

remind myself that the risk of

mediocrity is greater than the risk of

failure and for some reason that just

helps me get out of my own way and

actually get in the game okay so this is

just one aspect of the curse of

intelligence but there's another side to

it which ties into the fourth limiting

belief keeping smart people from making

money it's this I don't know what I

don't know now one of the greatest

ironies in the world is something called

the Dunning Krueger effect this

cognitive bias has two interesting

aspects first people with low competence

in a particular domain tend to

overestimate their abilities whereas

people with high competence in a domain

tend to underestimate their abilities

understanding why this occurs is

actually quite fascinating so let's

break it down real quick so we can

understand and recognize this bias in

ourselves and hopefully eliminate it one

of my favorite learning models is

something called the four stages of

competence it breaks down like this the

first stage of learning is unconscious

incompetence where you don't even really

understand how bad you are at the thing

yet because you're effectively ignorant

the majority of us we're going to stay

in this phase on most topics for our

entire life and not even realize it but

if you stick with it and you continue

improving you're going to move out of

that phase and you're going to go to the

second stage which is conscious

incompetence which is just another way

of saying you're starting to see the

full breadth and depth of the topic now

you see enough to realize just how

little you actually know now with enough

time with enough effort you can make the

jump out of this phase and make it to

the next level which is conscious

competence now you possess the knowledge

and experience required to competently

execute this skill but the interesting

thing about this phase is that it still

requires your conscious intent for

instance you might be a fantastic guitar

player but it still requires your

focused attention you can't just turn

off your brain and execute like a true

mroo can because you haven't progressed

to the final stage of learning which is

unconscious confidence now we call this

level Mastery because you can now

execute the skill at the highest levels

without even thinking about it now you

will likely only Ascend to this level

and a handful of skills over the course

of your entire life because the amount

of work it requires to attain true

Mastery is enormous but the mistake a

lot of us make which gives life to the

done and Krueger effect is that when

we're in the lower stages of learning

specifically unconscious incompetence

that is we don't even know what we don't

know we're more likely to overestimate

where we are on the Spectrum because we

don't realize just how far there is

still to go whereas once you're in the

middle two phases of conscious

incompetence and conscious competence

now you tend to underestimate your

abilities only because now you can see

the top of the mountain you realize how

damn far away it is so let's bring this

full circle the reason smart people

struggle to make money is because they

get hung up on the fact that they know

they don't know everything for instance

if you've been working as an accountant

in the Fortune 500 company for the last

decade you have a breath of domain

experience that could easily be

translated into starting your own

profitable accounting firm but you're

likely to get hung up on the massive

discrepancy between your domain

experience and your general knowledge of

what it takes to run a business and

therefore you decide not to take action

the dumb person by comparison might not

have your accounting skills or

experience and so there's not as big of

a gap between that and their General

business knowledge which might lead them

to conclude that starting their own

accounting practice will be easier than

it actually will be in reality as a

result dumb people tend to take action

and get in the the game and because

things rarely play out as badly as we

think they will more often than not they

stumble on to success and if you walk

away from this video Having learned only

one thing Let It Be this I call it the

secret of success I stumbled upon this

secret a couple years ago after meeting

my very first billionaire and for

whatever reason I guess I guess I just

had it in my head that billionaires

probably had this business thing all

figured out and that they were operating

on this higher level than the rest of us

lowly entrepreneurs but I remember

leaving that meeting with only one

thought it was this holy this guy

had no clue what he was doing he was

just too stupid to quit and when I say

stupid I mean he overestimated his

abilities he didn't fully understand all

the things that could go wrong and why

his plan shouldn't work and he didn't

realize that after years of hitting his

head against the wall and things just

weren't working out that he should

probably just pack it up go home and get

a job that actually pays the bills and

yet he didn't give up he didn't stop

believing he could make it work despite

the fact that everybody to his friends

to his family he looked like an idiot he

looked like an idiot right up until the

day things started to finally work and

on that day after years of struggle he

suddenly look like a genius and I share

this with you because on my own personal

Journey I've learned this powerful

lesson that you can't win if you don't

start and you can't lose if you don't

quit and whether you're smart or you're

dumb in that simple concept is

everything you need to know about

finding success in life so I encourage

you to get started don't stop and I'll

see you in the next video

[Music]

yeah