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  • Alex Becker’s Principles for Wealth and Success

    Alex Becker, claiming a net worth approaching multi-nine figures, argues that achieving significant wealth and success boils down to adopting specific principles and a particular mindset. He asserts that these principles, though sometimes counterintuitive or harsh, are highly effective. He emphasizes that conventional paths often lead to mediocrity and that true success requires a different approach focused on leverage, risk, focus, and a specific understanding of how to manage one’s own mind and efforts.

    🏛️ Core Principles for Success

    These are the foundational principles Becker identifies as crucial:

    1. Everything Is Your Fault:
      • Take absolute ownership of everything that happens in your life, both good and bad.
      • Avoid a victim mentality; blaming others removes your control over the situation.
      • Using the drunk driver analogy: while the drunk driver is legally at fault, focusing on your own decisions (driving late, not looking carefully) allows you to learn and potentially avoid similar situations in the future.
      • This mindset forces you to think ahead and strategize to avoid negative outcomes and trigger positive ones.
    2. Volume Overcomes Luck:
      • Success isn’t primarily about luck, especially in business.
      • Consistently putting in high volume of effort (e.g., 10-12 hours a day for years) inevitably leads to skill development and results.
      • If you take enough shots (e.g., try enough business ideas with full effort), one is statistically likely to succeed, overcoming the need for luck.
    3. Embrace Being Cringe:
      • Accept that the initial stages of learning or starting anything new will be awkward, embarrassing, and “cringe”.
      • Becker cites his own early videos, jiu-jitsu attempts, and guitar playing as examples.
      • Willingness to look bad, be judged, and make mistakes is essential for growth and achieving mastery.
      • Fear of looking like a beginner or being judged prevents most people from starting or persisting.
      • Consider this willingness a “superpower”; putting yourself out there forces rapid learning and improvement.
    4. Get Rich From Leverage (Not Just Hard Work):
      • Hard work alone doesn’t guarantee wealth; leverage multiplies the impact of your efforts.
      • Types of Leverage:
        • Assets: Owning assets (like a business) that generate value or appreciate.
        • Systems/Delegation: Building systems and hiring people so your decisions or processes are executed by others, multiplying your output. Example: Training a sales team vs. making calls yourself.
        • Capital: Using money (often borrowed against assets) to acquire more assets or invest.
      • Focus work efforts on activities that build leverage, not just repeatable low-leverage tasks.
      • This is the key to working fewer hours while making significant money (the “one hour a week” concept) – build leverage, then delegate its management.
    5. Understand and Take Calculated Risk:
      • Avoiding risk is the surest way to guarantee failure or mediocrity. Almost all success comes from taking risks.
      • Structure your life to enable risk-taking. This primarily means keeping personal expenses extremely low, so failures don’t ruin you.
      • View risk-taking as a skill that improves with practice. Each attempt, even failures, provides learning for the next.
      • The reward potential in business/wealth creation often vastly outweighs the downside if you can take multiple shots. Position yourself to be a “chronic risk taker”.
    6. Don’t Stay In Your Comfort Zone:
      • Comfort leads to stagnation at every level of success.
      • People plateau (e.g., at a comfortable job, or even at $2M/year income) because they become unwilling to take new risks or face discomfort.
      • Continuously ask yourself if you are comfortable; if yes, you need to push yourself into something challenging or scary to grow. Time is limited for taking big swings.
    7. Sacrifice Ruthlessly:
      • “If you fail to sacrifice for what you care about, what you care about will be the sacrifice”.
      • Audit your life: identify activities, possessions, habits, and even relationships that don’t align with your core goals.
      • Cut out the non-essentials ruthlessly (e.g., mediocre friendships, time-wasting hobbies, bad habits like excessive drinking or video games).
      • Prioritize work over social life, especially early on. Becker argues most early-life friendships fade anyway, and financial stability enables better long-term relationships.
      • Reject the justification of “living a little” for habits that hold you back; often these are just dopamine traps or addictions.
      • Live poorly initially to free up time and resources to invest in yourself and your goals.
    8. Focus: One Thing is Better Than Five:
      • To achieve exceptional results and beat competitors, intense focus on one primary objective is necessary.
      • Splitting focus leads to mediocrity in multiple areas (Tom Brady analogy).
      • Most highly successful people (billionaires) achieved their wealth through one primary business or endeavor. Identify your main thing and say no to almost everything else.
    9. Enjoy the Process (The Game Itself):
      • Peak happiness often arrives relatively early in the wealth journey (e.g., when bills are comfortably paid). More money doesn’t proportionally increase happiness.
      • Find fulfillment in the process of learning, growing, and playing the “game” of business or skill acquisition, much like leveling up in a video game.
      • Avoid “destination addiction” – thinking happiness will only come upon reaching a specific goal.
      • Recognize the ultimate pointlessness (in the grand scheme of mortality) allows you to define the point as enjoying the journey itself.

    💰 Specific Wealth Building Strategy: Equity over Income

    Becker advocates focusing on building equity (the value of your assets, primarily your business) rather than maximizing income.

    • Problem with Income: High income is heavily taxed, and much is often spent on lifestyle or agents/expenses, reducing actual wealth accumulation (Dak Prescott example). Pulling profits as income also starves the business of capital needed for growth.
    • Equity Focus:
      • Reinvest profits back into the business to fuel growth.
      • This growth increases the valuation (equity) of the business, often at a multiple (e.g., $1 reinvested might add $5 to the valuation).
      • Growth in business value (equity) is typically unrealized capital gains and not taxed until sale.
      • Live off a small salary or, more significantly, borrow against the business equity for living expenses or investments. Loans are generally not taxed as income.
      • This creates a cycle of reinvestment, equity growth, and tax-advantaged access to capital.
      • If the business is eventually sold, it’s often taxed at lower long-term capital gains rates.

    🧠 Mindset and Execution

    Beyond the core principles, Becker stresses several mindset shifts:

    • Be Unbalanced: Accept and embrace periods of extreme imbalance, prioritizing goals (especially financial stability) over a conventionally “balanced” life filled with mediocrity.
    • Value Specific Opinions: Only heed advice from people who have demonstrably achieved what you aspire to achieve. Ignore opinions from parents, friends, or the general public if they haven’t reached those goals.
    • Strategic Arrogance/Confidence: Reject forced humility. Cultivate strong self-belief and confidence (backed by work and sacrifice) as it fuels risk-taking and ambitious action. Frame life as a game where a confident “main character” mindset is more fun and effective, while acknowledging the ultimate lack of inherent superiority.
    • Embrace Dislike: Don’t fear being disliked or misunderstood, especially by those outside your target audience. Controversy can be effective marketing (Brian Johnson example).
    • Value Simplicity: Prioritize clear, simple thinking and communication over complex jargon that often masks a lack of results (contrasting Steve Jobs/Hormozi with “midwits”).
    • Ruthless Prioritization of Time/Focus: Be extremely protective of your time and mental energy. Say no often and don’t apologize for prioritizing your core objectives over others’ demands.

    ⚙️ The Engine: Optimizing Your Brain (The Sim Analogy)

    Becker argues the primary obstacle to achieving goals is the inability to consistently direct one’s own brain and actions. He suggests treating the brain like a Sim you need to program, optimizing three key areas through removal:

    1. Energy (Brain Health):
      • Remove: Bad food (sugar, inflammatory foods), poisons (alcohol, pot), poor sleep habits.
      • Add/Optimize: Clean diet (plants, meat, simple carbs), adequate sleep, exercise.
      • Result: Increased physical and mental energy, reduced brain fog.
    2. Focus:
      • Remove: All non-essential distractions. This includes financial stress (by drastically lowering living costs), unnecessary social obligations (friends, excessive family time), non-productive hobbies, politics, mental clutter (chores, complexity).
      • Result: Ability to direct mental resources intensely towards the primary goal.
    3. Motivation (Dopamine Management):
      • Understand: The brain seeks the easiest path to dopamine/reward and doesn’t prioritize long-term benefit. Modern life offers many “shortcuts” (video games, porn, social media, junk food, TV) that provide high dopamine with low effort.
      • Remove: These dopamine shortcuts. Smash the TV/game console, delete social media apps, block websites, eliminate junk food.
      • Result: By removing easy dopamine sources, the brain’s reward system recalibrates. Productive work and achieving goals become the most stimulating and rewarding activities available, making motivation natural rather than forced. Embrace the initial boredom until the baseline resets.

    By systematically optimizing energy, focus, and motivation through removal, Becker claims you can transform yourself into a highly effective individual capable of achieving ambitious goals.

    🚀 Practical Starting Advice

    • Just Start: Don’t get paralyzed by picking the “perfect” business. Start something. Skills learned are often transferable, and you’ll discover what works for you through action.
    • Find Breakage: Look for inefficiencies or problems in existing markets where businesses are losing money or customers are underserved. Solving these “breakage” points creates valuable opportunities.
    • Niche Down: In saturated markets, focus on a specific, underserved niche where you can become the best provider.

  • Trump Unleashes Reciprocal Tariffs: A High-Stakes Gamble Echoing ‘Art of the Deal’ Playbook

    In a move reverberating across global markets, President Donald J. Trump yesterday invoked emergency powers, unveiling a sweeping executive order imposing broad reciprocal tariffs on imports. Citing large and persistent U.S. goods trade deficits—now reportedly exceeding $1.2 trillion annually—as an “unusual and extraordinary threat to the national security and economy,” the President declared a national emergency, setting the stage for a dramatic reshaping of America’s trade relationships. This bold, confrontational strategy, detailed in the extensive executive order “Regulating Imports with a Reciprocal Tariff,” is being widely interpreted as a direct application of the aggressive deal-making principles famously outlined in Trump’s 1987 bestseller, “The Art of the Deal.”

    The executive order establishes an initial 10% additional ad valorem duty on nearly all imports, set to take effect shortly, with provisions for significantly higher, country-specific tariffs against major trading partners listed in an annex, including economic powerhouses like China and the European Union. This decisive action, rooted in the administration’s “America First Trade Policy,” directly addresses what the order describes as a fundamental lack of reciprocity in global trade, marked by disparate tariff rates, pervasive non-tariff barriers, and foreign economic policies that allegedly suppress wages and consumption abroad, unfairly disadvantaging U.S. producers and contributing to the “hollowing out” of American manufacturing.

    Observers familiar with President Trump’s long-professed business philosophy immediately recognized the hallmarks of “The Art of the Deal” in this expansive policy shift. The book, though focused on real estate, championed principles like thinking big, using leverage relentlessly, fighting back against perceived unfairness, protecting the downside, and employing bravado—all elements seemingly on display in the new tariff regime.

    Thinking Big and Aiming High: The sheer scale of the executive order—a near-universal tariff designed to fundamentally rebalance global trade flows—epitomizes the “think big” mantra central to Trump’s deal-making ethos. Rather than incremental adjustments, the order represents a monumental attempt to overhaul decades of U.S. trade policy, aiming for a dramatic impact rather than marginal gains.

    Leverage as the Ultimate Tool: “The Art of the Deal” emphasizes dealing from strength and creating leverage. The newly imposed tariffs function precisely as that: a powerful lever designed to compel trading partners to lower their own barriers to U.S. goods and address non-reciprocal practices. By making access to the vast U.S. market more costly, the administration aims to force concessions. The order explicitly reserves the right to increase tariffs further should partners retaliate (Sec. 4(b)) or decrease them if partners take “significant steps to remedy” imbalances (Sec. 4(c)), showcasing a dynamic use of leverage akin to high-stakes negotiation.

    Fighting Back and Confrontation: Trump’s book advises fighting back hard when treated unfairly. The executive order frames the trade deficit and associated manufacturing decline as the result of decades of unfair treatment and failed assumptions within the global trading system. The tariffs represent a direct, confrontational response, rejecting the existing framework and aggressively pushing back against trading partners and international norms deemed detrimental to American interests. The justification points fingers at specific higher tariff rates imposed by others (e.g., EU car tariffs, Indian tech tariffs) and a litany of non-tariff barriers detailed in the National Trade Estimate Report.

    Protecting the Downside: While often perceived as a gambler, “The Art of the Deal” preaches conservatism by focusing on protecting the downside. The executive order’s rationale heavily emphasizes protecting America’s “downside”—its national security, economic security, manufacturing base, defense-industrial capacity, and even agricultural sector (noting the shift from surplus to a projected $49 billion deficit). The tariffs are presented as a necessary defensive measure against the threats posed by reliance on foreign supply chains, geopolitical disruptions, and the erosion of domestic production capabilities, including critical military stockpiles.

    Knowing Your Market (and Sticking to Your Guns): Trump’s book advocates for developing a strong “gut feeling” about the market and trusting one’s instincts. The executive order reflects a deeply held conviction about the causes of trade imbalances and the necessity of tariffs, dismissing decades of conventional trade wisdom. It presents a specific diagnosis—failed reciprocity, suppressed foreign consumption (citing lower consumption-to-GDP ratios in China, Germany, etc.)—and prescribes a specific cure, demonstrating persistence in a vision pursued since his first term. The mention of R&D spending shifting overseas further underscores this specific market interpretation.

    Bravado and Getting the Word Out: Issuing such a far-reaching executive order under the banner of a national emergency is inherently a bold, headline-grabbing act, consistent with the “truthful hyperbole” and self-promotion tactics discussed in “The Art of the Deal.” It sends an unmistakable message of resolve to both domestic audiences and international partners, ensuring maximum attention for the administration’s policy goals.

    The order does include exemptions for certain critical goods (pharmaceuticals, semiconductors, energy, critical minerals, detailed in Annex II), previously tariffed steel and aluminum, and initially preserves preferential treatment for USMCA-originating goods from Canada and Mexico (though non-originating goods face duties tied to separate border EOs). It also notes adjustments based on U.S. content, attempts to address transshipment via Hong Kong and Macau, and anticipates changes to de minimis rules.

    However, the core thrust remains a dramatic, unilateral assertion of American economic power, justified by national emergency. Whether this massive gamble, seemingly drawn straight from the “Art of the Deal” playbook, will successfully revitalize American manufacturing, rebalance trade, and strengthen national security—or ignite damaging trade wars and harm consumers—remains the critical question. What is certain is that the President is applying his signature deal-making style to the complex arena of international trade on an unprecedented scale, betting that confrontation and leverage can reshape the global economic landscape in America’s favor. The coming months will reveal the consequences of this high-stakes application of the “art of the deal” to global commerce.

  • Diverging Paths: Marks and Buffett’s Contrasting Investment Philosophies

    Diverging Paths: Marks and Buffett's Contrasting Investment Philosophies

    While Howard Marks and Warren Buffett share a deep respect for intrinsic value and long-term investing, their approaches diverge in several key areas. These differences, while subtle, offer valuable insights into the diverse strategies that can lead to success in the financial markets.

    Risk Management

    Marks is known for his emphasis on risk management and avoiding losses. He believes that “if we avoid the losers, the winners will take care of themselves.” This focus on capital preservation is evident in Oaktree’s investment strategies, which often involve buying distressed debt or other undervalued assets with a margin of safety. Buffett, while also risk-averse, is more focused on the long-term growth potential of his investments. He is willing to take on more concentrated positions in companies he believes have a durable competitive advantage, even if it means accepting more short-term volatility.

    Investment Philosophy

    Marks is a proponent of value investing, but he also emphasizes the importance of understanding market cycles and investor psychology. He believes that these factors can create opportunities for outsized returns, but they can also lead to significant losses if not properly understood. Buffett, on the other hand, is a more traditional value investor who focuses on buying high-quality businesses at reasonable prices. He is less concerned with market cycles and investor psychology, believing that the long-term performance of a business is the most important factor in determining its value.

    Investment Universe

    Marks, through Oaktree Capital Management, has a broader investment mandate than Buffett. Oaktree invests in a variety of asset classes, including distressed debt, real estate, and private equity. This allows Marks to take advantage of opportunities in different markets and to diversify his portfolio. Buffett, on the other hand, primarily invests in publicly traded stocks of large, well-established companies. He has a more concentrated portfolio than Marks, and he is less likely to invest in alternative asset classes.

    Communication Style

    Marks is known for his clear and concise communication style. He regularly publishes memos to his clients that share his insights on the market and his investment philosophy. These memos are widely read and respected in the investment community. Buffett also communicates regularly with his shareholders through his annual letters, but his writing style is more folksy and anecdotal. He often uses stories and analogies to explain his investment philosophy, and he is less likely to share specific investment ideas.

    The divergent paths of Howard Marks and Warren Buffett highlight the diverse approaches that can lead to success in investing. While their shared principles provide a solid foundation, their differences in focusing on macroeconomic factors, investment universe, portfolio concentration, investment style, and communication offer valuable lessons for investors seeking to develop their own unique strategies. By understanding these nuances, investors can tailor their approach to their individual risk tolerance, investment goals, and areas of expertise, ultimately increasing their chances of achieving long-term success in the market.

    If you want to know where Marks and Buffett converge on investment philosophy read this.