Guerrilla Business School

Keith Cunningham

• Introduction by T Harv Eker
• Keith Cunningham

Introduction by T Harv Eker

T Harv Eker: The gentleman I have the privilege of introducing, this next gentleman, he’s got over 35 years of business experience. He started over 15 different companies on his own. He has negotiated hundreds, what’s the word?

Audience: Hundreds!

T Harv Eker: Hundreds of million-dollar deals and has helped raise over a billion dollars in capital for the companies that he's worked with. Cool or cool?

Audience: Cool!

T Harv Eker: Check this out. In 1979, he started a company with his partner. They started it with their own money, $500,000. Right? Their own money, $500,000. Twelve years later, they sold the company, $1,600,000,000. Cool or cool?

Audience: Cool!

T Harv Eker: Do you think you might be able to learn something from this gentleman?

Audience: Yes!

T Harv Eker: I think so, too. He is a phenomenal speaker. He's been on the stage with Brian Tracy, with Tony Robbins, with T. Harv Eker, with Robert Kiyosaki. Truly an amazing gentleman. You’re gonna love his presentation today. Robert Kiyosaki acknowledges him. How many of you have read the book Rich Dad, Poor Dad? Alright. He acknowledges this gentleman as the inspiration for that book. Based on this gentleman’s teaching, Robert put the book Rich Dad, Poor Dad together. This is Robert Kiyosaki’s teacher, and he's here to teach you this morning. Are you guys ready for some cool stuff? Alright.

>He loves taking the theory and like all the business strategies and skills like from out here and all over and bringing them down into concrete terms so you can get started. How many of you are in business right now? And how many of you would like to take that business to an entirely new level? Alright. That's what he does. How many of you are not in business right now? How many of you would like to start a business, though? Yes? Starting from scratch is something that he does also.

You know, taking any business or any person and getting them into, hooking them up with the strategies, the skills, all the technologies that they need so that their businesses will zoom and soar is exactly what this individual does. And aside from being a presenter and starting mega-businesses and being a phenomenal entrepreneur and a teacher, he's also an amazing author. So, please, help me give a huge round of applause for Mr. Keith Cunningham!

Keith Cunningham

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you! Thank you! Thank you! Thank you very much! Thank you! Thank you! Thank you! Have a seat. Have a seat. Take a seat in a peak state. Thank you so much. I am so thrilled to be here.

I’m very appreciative of the opportunity. Every time Harv invites us to speak, I’m always so grateful, and I’m grateful not only for the opportunity to speak but I’m also particularly grateful for the fact that you’re here. I think that money and time have a lot in common. You can spend them or you can invest them. You can spend your time. You can invest your time. You can spend your money. You can invest your money.

And I think one of the reasons that people don’t have the financial success that they would really like to have has to do with the skills that it takes in order to successfully invest your money and the skills it takes to successfully invest your time, and your being here for these four days with Harv at Extreme Wealth is all about an investment in yourself, an investment of your time, and I love working with people who are willing to invest, so thank you for being here very much.

I’m gonna start today, I have three outcomes that I want to have today to be about. Outcome number one is I wanna be transparent, and what that really means to me is that I wanna be able to teach you the best skills and tools that I have available, the best skills and tools that I have available over the next two or two and a half hours.

My goal is not to tell you what works in theory. I think there are a lot of people who are really good at teaching what works in theory. Sadly, it doesn’t work in the real world. I mean I think if you’re gonna get coaching, if you’re gonna get teaching, if you’re gonna learn from somebody, then for goodness’ sakes let's learn from somebody who has actually been there, done that.

Let's learn from somebody who is eating their own cooking and not throwing up, and my experience is there are a lot of people who wanna teach you something that will help them sell books and seminars and all that kind of stuff, but at the end of the day, you gotta learn something and you gotta learn critical skills and tools in order to be successful with your life.

So, the number one outcome that I have for today is to be transparent. Second outcome I have for today is to cause you to run out of ink. Run out of ink. In other words, for the next two or two and a half hours, I want you to take notes. If you hear something that's good, write it down. They’ve done all kinds of studies and what they found out is that if you write something down, you will remember it 500% better or your memory goes up 500% than if you don’t write it down.

So, always, here’s the rule, write this down. Write this down, what I’m about to say. Think on paper. Think on paper. Get it out of your mind and get it onto a piece of paper. So the first outcome I have today is to be transparent, to teach you what really works in the real world. The second outcome I have is to teach you skills and tools to have you run out of ink, so take lots of notes.

Third outcome that I have today, just so you know, is that at the end of my presentation I’m gonna be talking to you about an opportunity where you can continue your business education with me, so I’m letting you know upfront that's something I’m gonna be talking about towards the end.

The educational programs that I do, just so you know, I have in excess of 615 different skills and tools that I’ve developed over the last 35 years of being in business. Think of it like a tool belt. I mean, I’ve got this tool belt that has over 600 different tools in it, so regardless of what the situation is that I encounter, I usually have a tool that will fit that particular problem.

And the problem that I think most people have is they don’t have a very big tool belt. In fact, most people only have one tool. You know what the problem is if you all have is a hammer? I mean, to the man with the hammer, everything looks like a nail. And so if you only have a hammer in your tool belt, you’re constantly pulling out your hammer when what’s required is not a hammer, what’s required is a screwdriver or a saw or a level.

So the idea is, today I’m gonna give you a half a dozen. That's about all I have time for in two and a half hours. I’m gonna give you a half a dozen of the best skills and tools that I have, and then I’m gonna talk to you at the end about how if you’d like to have more skills and tools, there's a way to do that.

I think what we’ve just handed out to you is a piece of paper, and on that piece of paper I think there are two sides to it. We’re gonna look at the side of that paper that does not have, it does not say Rotoblock. Rotoblock is gonna happen in a minute. We’re gonna look at the other side of that piece of paper. And what it’s gonna say, what that piece of paper says, is it’s a game, and we’re gonna play a marble game. How many people in here have played the marble game before? Oh good, a number of you. So you’re gonna have an opportunity to play it again.

How many people in here have never played the marble game? Oh, good. You’re about to have a great time. And it’s gonna go very quick, and then I’m gonna pull some very important lessons out of the marble game. The way the marble game works is that I’ve got a sack, and in this sack there are 10 marbles, and I’m gonna pull the marbles out right now. Six of these marbles are green and four of these marbles are clear.

What’s your name? Jennifer, will you come look at this please? You see six green ones?

Yes.

You see four clear ones?

Yes.

Good. Watch. Here they go. Alright? They’re in the bag. Alright, will you hold the bag for a minute? Good. Now, you can go sit down. Or you can come stand up here and teach this.

I’ll let you do it.

Alright. Good. So there's 10 marbles. So what’s gonna happen is you’re gonna start off with $100,000, and we’re gonna do a series of pulls. We’re gonna select a marble. In fact, you’re gonna select a marble. I’m gonna walk around the audience and you’re gonna select the marble, and if a green marble comes out of the bag, you’re gonna win the amount that you wagered; however, if a clear marble comes out of the bag, you’re gonna lose the amount that you wagered.

So, on your piece of paper, I think what you see is something that says Equity, and I think that number right now is 100, and then what’s the next column say? It’s Amount Risk. So Amount Risk, and then what’s the next column say? Win/Loss, good, and then what’s the final column say? Good. So Total, and that's gonna be a dollar amount.

So here’s the way that's gonna work. Watch this. You’re gonna start with a hundred, and let's suppose you decide on the very first pull that you wanna wager, you’re feeling lucky so you say, “Good. I’m gonna wager 30,000.” Then, I’m gonna walk around and you’re gonna pull the marble out, not me. You’ll pull the marble out and everybody will see it, and then if it’s a green marble, do you win or lose on a green marble? You win on a green marble.

How much do you win? Good. So let's suppose that we risk 30, we pull out a green marble, we’re gonna write down a W. How much did we win? We won 30. So how much in the next line is my new Equity? How much is…130, that's it. So now I’m really doing good and I say, “Well, I think this time I wanna bet 50.” And you have to place your bet before we pull the marble. Let's suppose we win again. Then, how much do I have now? One-eighty. Sorry, I won 50. I won 50, so this number right here is now gonna be 180.

Do you know what you’re gonna do? Good. It’s gonna go very fast. It’s gonna go very fast. You’re gonna have to make the decisions very quickly on what you do or don’t wanna do. The object of the game is to win as much as you can. If by chance you go bankrupt, then you’re out of the game until we’re finished, and then we’ll figure out what happened, okay? Is that good?

Yes, ma’am. The marbles will always go back into the bag, so we’re always dealing with 10 marbles. Good. Make your first bet. Make your first bet. Let me ask you a question, Jennifer. Are you feeling lucky?

Yes, I am.

She says she is feeling lucky, ladies and gentlemen. Got your bets ready? Here we go. Here we go. First marble. Green! It’s a winner. You won the amount that you risked. You won the amount that you risked. Hi Don. Dan. Dan, how you doing? I’m Keith. Get your next bet ready. Here we go. Next bet. Dan, do you feel lucky?

Very lucky.

He feels very lucky. Here we go. A white. A clear. You just lost. Put it back in the bag. You just lost. You just lost however much you just bet. So get your new total. Now, keep in mind that Dan said he felt lucky, and he just lost. Now, here’s a rule I didn’t tell you. Dan is gonna have to keep drawing until he draws a winner. Dan’s gonna keep drawing. So Dan, now how you feeling?

Not quite as lucky.

Dan is not feeling quite as lucky, so you may wanna kind of gauge back on your bets. Get your bets ready. Here we go. Here we go. Here we go. It’s another clear one. Another loser. That's two losers in a row. What’s the odds of us having three losers in a row? Holy cow! We’re due for a winner, don’t you think?

We’re due.

Alright. So are you feeling lucky?

Not quite as lucky.

He’s not feeling very lucky. If I were you I would kinda pull back on the size of my bet. Get your bets ready. Get your bets ready. Here we go. Here we go. Another clear one! Another clear one, ladies and gentlemen. Three in a row. How could that happen? Has anybody gone broke? Holy cow! I guess some people are just gonna get to sit and watch. That's what happens when you go broke. When you go broke you don’t get to play anymore. You just have to sit and watch, sorry.

Here we go. That's three in a row. Now, let me ask you a question. Don’t you think that we’re due for a green one? I do. I mean, if there was ever a time to back the truck up, this would be it. I mean, let's load this baby up. I mean, what’s the odds of four losers in a row? I mean, how are you feeling? Are you feeling lucky?

Yes.

He’s feeling lucky, ladies and gentlemen! Here we go. Here we go. Here we go. Here we go. Here we go. It’s a clear one! It’s another clear one. Are you kidding me? Now, how many people are bankrupt? A few more hands. Okay. So, what is that? Four? Four green ones in a row? Four white ones in a row. Four clear ones in a row, so that we have four losers in a row. What is it? What is she telling me? No, they’re in there. Look. Look inside. Look inside.

Yeah, they’re there.

Are they there? Are they there? Are there six green ones in there? There are, aren’t there? Six green ones. I haven’t messed with it. We’re good. Are you feeling lucky?

No.

We got no way of knowing with this guy. This guy’s in shock. Make your bet. Make your bet. Here we go. Sorry, he’s got to keep going till he gets a winner. Here we go. Here we go. Here we go. Here we go. A clear one! Another clear one! That is five in a row! Holy cow! How much money would you all give me to go to somebody else?

A lot.

I mean, this is unbelievable. Five bad ones in a row? Are you kidding me? She just said he never wins. Here we go. Here we go. Here we go. Are we due? Are we due? Yes, we’re due! Here we go. Here we go. Here it comes. Here it comes. He’s using a different hand. A green one! Yaay! Okay, you just won however much you just bet. You just won however much you just bet. How you feeling?

I’m feeling good!

Are you out of the game?

I’m out of the game.

She’s out of the game. She can’t pull. Patrick, are you still in the game?

I’m in the game.

Good. How are you doing?

I’m doing good.

Who’s got more than a hundred thousand? Who’s got more than 50,000? Good? Oh, that's a bunch. Good. Who’s totally out of the game? Okay, good. Here we go. Patrick, are you ready?

I’m ready.

Are you feeling lucky?

I am.

I know we had a whole ton of bad ones. We’re due for a whole ton of good ones.

We are.

How much you betting?

One thousand.

One—what a weenie.

[Laughter]

I mean, if you’re gonna run with the big dogs, let's play.

I’m playing 60% of my…

Let's play. No, really, let's play. If we’re gonna play, let's play. What’s all this puss-around mess? Let's go.

[Laughter]

Let's go. Come on. Make a bet. Ten grand.

I don’t have it.

How much you got?

One thousand five hundred.

You got one thousand five hundred? And you’re betting a thousand? You’re a good man.

[Laughter]

Here we go. Here we go. Here we go. Here we go. Are you ready? A green one! Attaboy! Attaboy! Here we go. Are you still in the game, Chuck? He's out of the game. How you doing, Jim? Totally out. Bradley, how you doing?

Doing well.

How much?

Ninety-four thousand.

Ninety-four thousand, ladies and gentlemen. Give him a hand. That's pretty good. Are you feeling lucky?

Lucky.

He feels lucky. How much you gonna bet?

Three thousand.

Three thousand. You got 94,000. Let's go. Let's make a bet. Fifteen, twenty grand.

Thirty grand.

Thirty grand! Thirty grand, ladies and gentlemen! Here we go. Here we go. Thirty grand. He's gonna bet thirty grand. So you’re really feeling lucky. I’m feeling lucky, too. Go ahead and bet. Here we go. Blow on it. Blow on it. Rub it. Here we go. Clear one. Not good. Not good. Not good.

Here we go. Are you feeling lucky this time? You know, this is a time you would double down. I mean, you just took a hit of 30. Let's get it back, and then some. What do you think? Let's go ahead and swing for it because if you hit it, if you hit it it’s good. How much you gonna bet? Fifty. Fifty. Say fifty. Say fifty, let's go. Fifty.

Fifty.

Fifty! He did it! Here we go. Here we go. Let's pull it, Bradley. Here we go. Here we go. Here we go. Green! Attaboy, Bradley! I knew it. We doubled down. That was good. That was good. How many pulls have we done? Ten? Ten. We’ve done ten. How are we doing, by the way? Who’s got over a hundred? Who’s got over 200? Who’s got over 300? Who’s got over 400? How much do you have?

Four ten.

Four ten. Four hundred and ten thousand. This is the guy that won 12 grand last night. Is that right? Are you feeling lucky?

Yes.

He's feeling lucky, ladies and gentlemen. He's gonna pull the next marble. So how big is the bet?

Two hundred.

Two hundred thousand. Ladies and gentlemen, he’s betting half the pot. Here we go. Are you ready? Obviously, he feels lucky. Obviously, he knows what he’s doing. This is a very talented guy. Green! I told you. There you go. Put it back in there. He just won 200. He’s up to 600. Anybody got more than 600,000? Who’s got more than 600? You do? How much do you have? Six thirty-four. How much do you have? Six ten. Are you feeling lucky?

Yeah, I am.

He’s feeling very lucky. How much you gonna bet?

About a hundred.

[Laughter]

Thousand. Hundred thousand.

And you feel lucky? I mean, if you feel lucky, you go ahead and take a swipe at it. Let's go.

Let's bet 600,000.

Six hundred thousand, ladies and gentlemen! If he wins, you’re in trouble. How you doing?

Six hundred.

You’re going 600 too? Okay. Here it is, the battle of the titans. Here we go. These guys feel lucky. Here we go. That's it. Here we go. Here we go. Here we go. Here we go. Green one! Man, all we gotta do is get these guys that are winning a lot. Now, they got over a million bucks. How many people are bankrupt? Good. This is our last one. This is the last one. This is the last one. We’re not gonna do it again, so you better, if you’re gonna win, you better go ahead and bet. Are you feeling lucky?

Yes.

How much are you betting?

Ten thousand.

Ten thousand? How much do you have?

Hundred thousand.

You have what you started with. You’re just betting 10,000, 10,000, 10,000, 10,000, and you’re even. Is that right?

Yes.

Ten percent of the game. Here we go. Here we go. Here we go. You betting 10,000?

Yes.

This is it. Here we go. Last pull. You better bet big. Better bet big. Green! Alright, good. Okay, good. Let's figure out what happened. What’s this game really about?

Strategy.

I love that. How many people, let me see, how much did my big boys get? How much did you guys over here, how much did you all have? One point three. One point what? One point two three five? So, 1.3 is the high? Anybody in here higher than 1.3 million? Anybody higher than that? Good. Give him a hand! Stand up. We’re gonna give you a hand!

What? What happened? Hang on. Hang on. Hang on. A million…? Ten million? Ten million? Wow. Give her a hand. That is huge. Ten million. How many people have less than a hundred but more than zero? Less than a hundred but more than zero? Good. How many people have zero? Alright. That's good. And how many people have more than 200? Good. Good.

What was your strategy? Because somebody said it, and this is very, very important. That's why I love this game. This game has a whole lot to do with strategies and emotions and all of that gibberish that I was doing, you know, talking about, okay, well you need to bet big, and we’ve had four white ones in a row, and if you’re good and feeling lucky then go ahead and pump up the volume, back the truck up, bet big. All that kind of stuff is just nonsense.

And the truth is there are people that are busy pumping you full of nonsense all of the time. All of the time. I mean, brokers are there to get your money, to cause you to do a transaction, and the bigger the transaction you do the more money they make. So brokers typically are there to get you to do a transaction, and whether you win or lose makes no difference to the broker.

And my experience is, oftentimes, people wind up using their emotions instead of their intellect to make decisions. I mean, people at one point or another during the last 15 minutes made an emotional decision. I mean, might as well tell the truth. I mean, holy cow, I mean it’s only a game. Let me see your hands again. Let me see them. Thank you for your honesty. How many people during the last 15 minutes did not once, not once, did you make an emotional decision?

I mean, you stuck with it, you stuck with it, this is your plan, you will not deviate from your plan? Tell me your plan. I need a mic right here. Tell me your plan. So, just a mic right up here in front. We’re gonna be doing a little talking. We’re gonna figure out what her plan is. What’s your name? Marie. Give Marie a hand, very nice. Alright, Marie. Tell me your plan. What was the strategy?

Well, my strategy was to go in, like risk a chunk, because I didn’t do a big chunk last night. I did a little and I won a little, and the guy behind me got the jackpot, so I didn’t want that to happen.

Okay. So what was your strategy?

So, go in with the chunk, but then the first loss I reduced what I bet. And then, when I…

Right, but what was your strategy? I understand the plan. What were the percentages? Did you have percentages or was it just kind of based on your gut?

No, I actually was gonna, I took over one-third.

You what?

My strategy was to go in in chunks of about a third. My first bet was 40.

A third! So you’re betting a third of your money, is that right?

Yup. Yup.

Good? Now, let me—give her a hand.

But when it went on a loss, I did not. I bet 10% on a loss.

Okay. So every time there was a loss, you reduced your bet, is that right?

I did. I did.

Alright. And some people, every time there was a loss, they increased their bet. Give her a hand. Very nice. Let me ask you a question. How in the world could we get this many different results? I got people in here with nothing, I got somebody in here with 10 million, I got a couple of people with over a million, I got about half the room that's got less than a hundred, I got more people that have got more than a hundred but less than a million. How in the world could that happen? We all were playing the exact same marbles.

It was the exact same marbles. Every time a green one came out, it was green for you, green for you, green for you. Every time a clear one came out, it was clear for everybody in the room. Do you know what dictated your results? Yes, the size of your bet. The size of your bet. It’s called a position. How big of a position did you take?

And I agree with Harv, how you do anything is how you do everything. And my experience is, how people play this game usually is a reflection of how they play in real life, only people usually play this game better than they do in real life. The truth of the matter is that if you wound up with over probably 250,000 or if you wound up bankrupt, you got the same problem.

I’m gonna say that again. If you made a ton of money or you went broke, there is no difference in the mentality of those two people. The people who made a ton of money, the people who went broke, they got the same mentality. There was no way in this game to make a ton of money unless you used your emotions. You got lucky.

And I think there's a lot of people out there in the world who are getting lucky. I think there's a lot of people that got lucky in real estate over the course of the last three or four, five years. And then, in the last six months all of a sudden, all those people who got lucky we’re busy giving that money back because they got lucky.

You know, I’m not saying they didn’t do anything. You know, they bought real estate and then real estate went up in value. But they didn’t do anything to create that increase in value. This is a game where if you made a ton or if you went broke, the only difference was whether you did or didn’t get lucky. I mean, that's the only difference. The only way you could have 10 million is if you made some huge bets.

How many people in here at least once bet it all? At least once you bet it all? Now, why in the world would you do that? Why in the world would you do that? I mean, that's a crazy thing to do. I know. I know. The game was about over and people do that sometimes. When there's a clock ticking, all of a sudden their emotions kick in and they say, “Oh, well, it’s just a game. I wanna see how much I could end up with.” And instead of using their brain, they use their glands.

And my experience is most people are glandular investors. Most people are glandular in their business decisions. I would tell you this. Write this down. This would be one of the things you should write down. Business is an intellectual sport. Investing is an intellectual sport, and the people who do the very best at it are the people who use their intellect, who use their brain and not their emotions, not their gut, not their intuition.

Look, I’m great with gut feelings if the gut feelings are based on something. So, if I asked you the question, alright? “I’ve had these heart problems and I’m feeling like and I’ve been told I need open-heart surgery.” Would you just kind of go in and do open-heart surgery on me and just use your gut, use your intuition? I mean, that's what people are doing all the time. They’re going in and they’re asking somebody to use their intuition or their gut on something that doesn’t respond well to gut kinds of things.

Business and investing is the same way. I would rely on Michael DeBakey’s gut. If I went to Michael DeBakey and I said—you know who he is? Michael DeBakey is the original guy who started doing heart transplants. I mean, he is one of the first two people who did heart transplants. This guy’s done over 50,000 open-heart surgeries.

So, if I went to Michael DeBakey and I said, “Michael, look, I got these heart problems. Use your gut.” I would be willing to rely on Michael DeBakey’s gut. Why? Because his gut and his intuition is based on experience as opposed to emotions. In this particular game, and the reason I love to play it is because there are so many—I could teach you about this game for three or four hours.

But in this particular game—where’s my guy over here that bet 10,000, 10,000, 10,000? Bring him a mic real quick, okay? What’s your name? What? Real? Did you say Real or Rial? Rial? Good, I’ll call you Rial. Is that better? Give him a hand. Give him a hand. Rial, stand up. Stand up. Rial, what was your plan in this game?

My plan was that I would bet 10% of the total take. There was a hundred grand on the table. Only play with 10% of the available money you have.

Alright, good. And so at the end of the game, how much did you end up with?

A hundred and ten thousand.

He wound up with 110,000. How many winners did we have in this game? No, I mean, green marbles. How many green marbles? Sorry, that was a bad question. Seven green marbles! How many clear marbles? Six! Is that right? So we had seven green, six clear. Is that right? Was there one more green than clear?

Yes!

Yes, that would be true, which is how he wound up with 110,000. Now, if he’s betting 10%, by the way, that was very nicely done because, number one, could he ever go broke by only betting 10% of what he made? No, he could never go broke, because if he got down to 50,000, then he’s—how much was your low point?

Seventy thousand.

Seventy thousand was his low point, so at that point you were betting 7000, is that right?

No, I kept it at 10,000.

You kept it at 10,000, 10,000, 10,000, which is okay, but would it have been possible in this game for there to have been 10 clear marbles in a row?

Oh, yes.

Is that possible? Yeah, it is. So under your theory, you were still exposed to some risk. Don’t sit down. I wanna come back to you. Did anybody in here use just a percentage, a percentage, a percentage? Good. Right there. Yes, stand up. We’re gonna bring you a mic. Hang on. Leave this mic here. They’re gonna bring you a mic right now. Good, tell me.

Yeah, I did exactly the 10% and it finished at 103,000. That wasn’t exactly, I rounded a bit, so I went from, you know I was down at 77,000. I bet 7000.

And how much did you end with?

One oh three.

One oh three. So by doing 10%, 10%, rounding a little bit, you wound up at 103.

Right.

You wound up, Rial, at 110, is that right?

One ten, correct.

Now, I want you to think about something. There are two things. Give both these guys a hand. Thank you. Thank you. I want you to think about something on this game. The game took how long, 15 minutes? Fifteen minutes, there are four of those in an hour. Let's suppose there's eight work hours, so that's 32 fifteen-minute chunks. Suppose every 15 minutes you could make a 10% return on your money.

See, here’s what happens. People get all enamored with this idea of making 10 million, which I’m glad you’d made 10 million, but the truth is you got lucky. It’s the only way it could have happened. You don’t make 10 million in this game with seven winners and six losers. You don’t make 10 million in this game unless you guessed right, and you don’t go broke in this game unless you guessed wrong.

But the truth is if you made a ton or you lost it all, either way you were guessing, and what’s required to be successful in investing, what’s required to be successful in business is take the guesswork out. Now, here’s the whole problem. Rial had this problem. This guy, I’m sorry, I didn’t get your name. Clay. Glenn! Glenn and Rial and who were the rest of the people that did a percentage or a fixed amount? Good.

Here’s the problem. They were bored out of their skull. That's the whole problem, and nobody wants to be bored, and so what we do is we say, “Oh well, this is the last one. Well, we’ve had three bad ones in a row. You know, I know I’m supposed to be doing 10%, 10%, but boy, we’ve had four bad ones, we’ve had five bad ones in a row, I’m gonna load up, ” and that makes it fun, it makes it exciting.

So here’s the problem with all those people who bet a percentage. Every one of them, number one, had more than they started with. If you bet a percentage or a fixed amount and didn’t change, you wound up with more than you started with. In this game, you had to. Here is the problem they all faced: Boring. Boring. Boring. I’m going crazy. Hurry up. I hate this. Nothing’s happening. Boring. Boring. Boring. But I’m rich. But I’m rich. Ka-ching. Ka-ching. Ka-ching. Ka-ching. Ka-ching.

I’m gonna suggest something to you. Getting rich is boring. Write that down. Going broke is exciting. Getting rich should be boring, and for most people the truth is they are addicted to adrenalin, they’re addicted to the rush, they want excitement. You don’t put excitement into your money. Making money should be boring, and the reason is because you’re removing all of the emotions. Does that make sense? Alright, good.

Tell me something you just learned. You guys have been taking notes. Somebody tell me something that's either, “Ah! Boy, oh boy, am I glad I was reminded of that,” or something where you saw your own behavior, just something you learned. Hang on, they’re bringing you a mic. Right here. What’s your name?

Azita.

Azita. What’s something you learned?

I play emotional. I take huge risks when, when we were losing I was taking risks, huge risks.

Yes?

And betting that it would work out. And so what I learned is to take the emotion out, to have a system…

Good!

To be knowledgeable, and be bored.

And be boring! Thank you, that's a great lesson!

Yes!

Give her a hand! Very nice! That's a lesson I hope you would get. I hope you would get the lesson that, look, you have to have some rules. Write that down. If you try to invest, if you try to become wealthy and you don’t have rules, then you are speculating. You are gambling. Your emotions are in play.

Look, I don’t know about you, but I have a worst enemy. You know what his name is? Keith! Keith is my worst enemy! That little sucker never sleeps! He is constantly rearing up, trying to screw me up. It happens over and over and over again. I have to have some rules that will protect me from me!

Check it out! I don’t know about you, but all of my problems started out as a good idea. How about you? Is it true? I mean, who wakes up in the morning and says, “Okay, today’s the day. I’m gonna go out and wreck my life!” Nobody does that. We all go out every day, we think we’re doing the right thing, and all of our problems started out as a good idea. I have to have rules in place that protect Keith from Keith! Keith is my worst enemy. It’s unbelievable!

I’m gonna be talking more about rules in a second. I’m also gonna be talking about investing and investing mastery. That's kind of what my theme is for today. It’s what Harv asked me to talk about, and in fact, on the flip side of the piece paper that you guys have been playing this game, oh, by the way, give yourselves a hand for playing the game. Very good.

On the flip side of that piece of paper is something that just recently came in the mail to us, to Sandy and I, my wife and business partner Sandy. We have a significant amount of money that's being managed by other people, and once or twice a month they send us a little write-up, and right before we came over here to Las Vegas, in fact I just flew in last night from London. I’ve been teaching in Europe for the last two and a half weeks.

So last night we landed, and Harv called me in London a few days ago and he said, “Keith, I know that you got a bunch of people that are gonna be at Extreme Wealth, and could you bring along one of the deals that has recently been presented to you?” And so I said, “Sure.” So I brought this deal along not for you to do it necessarily but for you to look at it, and this is some of the kinds of things that we’re saying that are opportunities.

Let me give you a summary. It looks like they got a patent. It looks like this particular motor that they have will increase the power of about 50%. It looks to me like it’s environmentally very friendly. It’s hydrogen and ethanol. It looks to me like there’s less complications than there are with conventional kinds of engines. It’s easy to repair, and their primary target market appears to be China and India, which are both very large, very emerging markets.

So, at the bottom of your piece of paper, just based on what you’ve read, if this is something that you would be interested in doing, just write down, and I’m gonna suggest we just play with a thousand dollars. You write down zero as the amount that you’d be interested in investing or you write down up to a thousand.

If you want to write down more than a thousand, that’d be fine, too, but someplace on your piece of paper, just write down, based on what you know right now, kind of what would be your interest level in this deal, and then we’ll talk about this whole subject of investing and come back to this deal in a minute. Is that good? Everybody written something down? Good. Alright. Someplace put in zero and a thousand. You know, if you’re a high roller like these guys back here and wanna bet more, then you could do that, but zero to a thousand. Alright.

I believe that one of the biggest problems that people have when it comes time to make decisions, particularly around the subject of money, is that they don’t take time to think. I mean, what most people do when they think about thinking is that they yawn and get ready to take a nap as opposed to really doing thinking.

I was hired in the early 1970s by two guys who became my mentors, and when they hired me what they said is, “Keith, we promise you that over the next two years we will teach you everything we know.” These guys were very, very successful businesspeople, and they hired me as their protégé to learn and carry their ball, so the very first thing I said I wanted to do was learn.

And then, after I learned and I practiced a little bit, then all of a sudden I had some competence. I had some competence and was able to actually start doing deals on my own. By 1981, ’82, I had made an enormous amount of money. I was very successful, literally had millions and millions. In 1982, I was 32, so for those of you doing the math, it’s 2007 so I’m 57.

So, in 1982 I had made an enormous amount of money, we were very successful, and I was buying a business. I was buying another company and I was raising money for this deal, and who I was raising money from is an investment bank named Drexel Burnham. Now, Drexel Burnham was kind of the king of investment banking in the 1980s and kind of like Goldman Sachs is today, but back in the ‘80s it was Drexel Burnham.

And Drexel Burnham was the inventor of something called junk bonds. Junk bonds is debt that is very low-quality debt, but it’s how in the 1980s, you know, T. Boone Pickens and Carl Icahn and all of these, Ivan Boesky, were all busy buying companies, and they were the corporate raiders. Well, in the 1980s, I was buying a business. The business price was 140 million, and I went to Drexel Burnham and I said, “Could you guys provide the financing in order to allow me to buy this business?”

And Drexel Burnham said, “Yes, we would love to provide the financing, Keith. You got the track record, you got the experience. We’d love to help you raise this money.” The deal is totally buttoned up, everything is all ready, the paperwork has been prepared, we’re within a matter of maybe a week of funding this deal and closing the transaction, and my guy in New York whose name is Leon, Leon said, “Keith, there’s only one final hurdle. The hurdle is that you need to go and fly to Los Angeles and meet with Mike Milken.”

Now, Mike Milken in the 1980s was the father of junk bonds. He was like incredibly well-known in the Wall Street financial world. He was extremely rich. His salary and his bonus from 1979 to 1985 averaged, his salary, averaged a billion dollars a year, so he’s very successful, very rich. And Leon says, “Keith, you gotta go have a meeting with Mike Milken before we can do this deal.” And I said, “Alright. I’ll go meet with Mike Milken. Where is he?”

And Leon said, “Well, he’s in Los Angeles, and Keith, what you’re gonna do is you’re gonna fly to Los Angeles. They’re gonna show you into a little room. In this room, there’s gonna be a total of seven chairs. There's gonna be five of the Drexel people in this little conference room. There's gonna be a chair for you, and right next to you there's gonna be an empty chair, and the meeting is gonna get going.”

And Leon said, “Keith, you’re just to start making your pitch. You just go in and get going on this thing. Tell him why this is a good deal, and at some point into the meeting, the door is gonna open and in is gonna walk a little-bitty short guy with a bad toupee. That guy is Mike Milken. Mike’s gonna sit down next to you. Don’t say a word. Don’t stand up. Don’t break stride. You just keep right on going. Don’t say anything. Just keep on going, and then at some point, if Mike likes everything he hears, he’s gonna leave. He’s not gonna stay the whole time.”

“Now,” he said, “Keith, you’re gonna get nervous if he stays too long, because that's not good if he stays too long. It’s gonna be very short, in and out. Don’t say anything to him. He doesn’t like that. This is not about him. This is only about the deal.” I said, “No problem. I got it.”

So I fly to L.A., I get to the little conference room, seven chairs. I’m in there, five of their people in there, empty chair right by me. The five people say, “Okay, let's get going.” Man, I am rolling. I am smoking. I’m telling them why this is a good deal, about competition, about market value, value propositions, competitive advantage, management teams. I am cooking.

The door opens, in walks this little-bitty short guy with a bad toupee. He sits down right next to me. I don’t break stride, I just keep on going, and I go for another five minutes and the door opens again. They didn’t tell me that was gonna happen, so I stopped. I turned around, I looked at the door, this guy sticks his head in and says, “I’m sorry to interrupt. Mike, we have to have a decision on the takeover of Gulf Oil.”

I went, “Whoa, that's big deal.” Mike Milken, who’s sitting right next to me, says, to me and the rest of the room, he says, “I’m sorry, give me one minute.” Mike Milken opens his little day-timer, turns the page, turns the page, and says this, “The next time I’m scheduled to think is from 3:00 a.m. to 5:00 a.m. on Thursday morning. You will have an answer at 5:00 a.m.”

I went, “Whoa.” These boys are playing at a whole different level, you know what I mean? I mean, first of all, they’re scheduling time to think. Are you kidding me? I’ve never done that in my life. I’m a gunslinger. I’m a ready, fire, aim, like this woman said over here. That's kind of how I did it, and I said, “Whoa, here’s a guy who’s obviously very smart, very successful, he’s made a ton of money, and he is scheduling time to think. Not only that, it’s from 3:00 a.m. to 5:00 a.m. in the morning.”

So I sat there and I opened my little notebook, and I said, “Note to self: Schedule time to think.” Now, let me ask you a question. Has anybody in here besides me ever learned something and then forgot to use it? Yeah! That's what happened to me. So here I am, I buy this company. I mean, I’m hot, I’m on a roll. Everything is good. I start buying real estate. I’m loading up with debt, and pretty soon I get hundreds of millions of dollars of debt.

The economy started turning and the liquidity, kind of like it is today, got drained out of the market, only it was worse, and ultimately I couldn’t sell any of the assets that I had, and my assets kept going down in value but my debt stayed right here. So, for a while, I was like this, worth a ton, and then pretty soon, I mean, here’s my debt and here’s my assets, and I’m going, “Boy, this is getting worse and worse and worse.”

It reminds me of what W.C. Fields said one time, “I sure hope I break even on this deal. I really need the money.” That's the way I was feeling. I was just hoping I was gonna break even on this thing. I spent four years of my life negotiating my way out of several hundred million dollars of personal liability debt. I had a lot of cash, I had a lot of net worth, and I just started trading.

For four years I made no money. All I did is go to the office every day and call my lenders and say, “Okay, look, I’ll give you back your property, I’ll give you back the assets, and I’ll give you a little bit of my cash,” and I was successful. After four years, I got back to zero.

My accountants came to me in 1990, and they said, “Keith, congratulations on getting out of debt.” I said, “Thank you very much. I’m even. I have no assets. I have no debt. I got zip, nada, nothing. I got nothing. But I’m very happy. I broke even.” And my accountants said to me, “Keith, the bad news is you have…”

When there was debt forgiveness, so if I owed a bank 10 million and I only gave them back six million, then I had four million of debt forgiveness, right? Does that make sense? They said, “Keith, the bad news is that that debt forgiveness is phantom income to you.” I said, “Alright. So what?” They said, “Well, you owe taxes on that phantom income.” And I said, “Well, I didn’t ever get the money.” They said, “We know. That's why it’s called phantom.”

I said, “Well, how big is the problem?” They said, “Nine million dollars. You owe the IRS $9 million dollars.” I said, “Well, I don’t have that much anymore. I used to have it, but then I had to solve all these other problems.” I said, “I tell you what we’ll do. Since it’s phantom income, why don’t I pay them with phantom cash? Fair is fair.”

They said, “That ain't gonna work.” I said, “Good. What’s my option?” They said, “Well, your option is you can either pay it or you can file bankruptcy on February 12, 1991.” Worst day of my life. February 12, 1991. I had to declare personal bankruptcy. I mean, I had pissed away an enormous fortune, and the reason that happened is largely because I had learned a skill in 1982 that I forgot to use, and it was the skill of thinking.

I’m gonna suggest something to you. It’s that when you learn something and you practice and you get competent at it, what that usually leads to is arrogance. That's what it usually leads to. I mean, the problem with success is that success breeds complacency. Success breeds arrogance, and I see it all the time in the teaching that I do with entrepreneurs and people who wanna be entrepreneurs. I mean, people who get their first bite at the apple and start getting some success all of a sudden start getting cocky, and that's what happened to me.

I told somebody one time at the height of my wealth, and my wealth was real, I mean I had a lot of cash. It wasn’t just on paper. I told somebody one time that I was kind of like Hailey’s Comet. You know, a guy like me only comes around about once every 70 or 80 years or so. I mean, that's the height of arrogance. But that's where I was, and so I started a sabbatical, and this sabbatical started in 1991. I didn’t know how long it was gonna last. It ultimately lasted 18 months.

There's a reason I’m telling you this story. The sabbatical lasted 18 months. During this sabbatical, I said my goal cannot be to get rich. I’m broke. I’m broken. There is a part of Keith who is broken because I’d spent my entire life up until then going for success and it wasn’t working. My marriage wasn’t working, I was a sorry dad, I was a sorry husband, I was bankrupt, I had no money, and I said, “I gotta work on Keith. That's the primary thing that needs to happen.”

I grew a ponytail, I got my ear pierced, I studied the world’s religions, I read 180 books of theology, philosophy, psych, all of the –ologies, psychology. And the way I describe this time is it’s like being a basketball player and it’s halftime, and I’m one of the players, and the buzzer goes off, and as I’m trotting off the court to go into the locker room, I turn around and look at the scoreboard, and the scoreboard says the score is 87 to 3, the other guy is winning.

So I sat in the locker room in my halftime and asked myself the question, “How do I win this game? How do I win this game? How do I win this game?” I was stuck. I was stuck. It turns out that's a horrible question. It wasn’t until I changed the question from “how do I win this game” to “how am I gonna play?” It’s not about winning the game. It’s about how you’re gonna play. I changed the question and very quickly was able to emerge from this sabbatical that I was in. The sabbatical lasted 18 months.

Within three years after I left my sabbatical, I had recreated my entire net worth. The entire thing. I’d made all the money back. Now, the question is, how’d that happen? I’ll guarantee it happened because I had skills and tools. If you don’t have skills and tools, you can’t do it the first time unless you get lucky and rely on hopium. You know what hopium is? That's what most people are busy relying on, hopium. “I hope it’ll work.”

And I went bankrupt because I took my eye off the ball, got cocky and arrogant. I didn’t think it could happen to me. During the sabbatical, what I had to do is make a decision, and the decision that I made was a decision not to pursue success but instead to pursue mastery. That's an entirely different ballgame. Mastery is a different ballgame from success, and really that's what all my teaching, if you took all my teaching and put it on a bumper sticker, that would be what my teaching is about. So, around the subject of mastery. I’m gonna talk more about that in a little while.

The critical part of this story is the turning points of the story. It’s the Learn, Practice, Competence. This one fouled me up. I got cocky. I then had to make a Decision. That's what happened in the sabbatical, and ultimately what I concluded was in order for me to create the life I want, what I need to be dedicated to is not success. What I need to be dedicated to for my life is Mastery. Mastery to me simply means being the best me that I can. Write that down.

Mastery means being the best me that I possibly can. The truth of the matter is, when I die, I have no interest in somebody standing over my grave delivering a eulogy to say, “Here lies Keith. He was super-rich.” That's not the difference. What I have an interest in is saying, “Here lies Keith. He planted a stake. He gave it everything he got. He made a difference.” That's a whole different ballgame. That's what mastery is about.

I believe mastery is what you learn after you think you know it all. Mastery is what you learn after you think you know it all. I heard a saying one time that really sums up mastery to me. It says this, “There is nothing noble in being superior to someone else. The only true nobility is being superior to your former self.” There's nothing noble in being superior to someone else.

This is not a race, and for sure, it’s not something I’m gonna win. There's nothing noble in being superior to someone else. The only true nobility is being superior to your former self. It’s very powerful. What if the level you decided to play was at the level of “how do I create the best me?” That's a whole different ballgame.

So, critical thinking time. I learned a lesson. I now take very regular breaks to do thinking, but I think one of the reasons people don’t get rich is because they don’t ever bother to think. If you’re gonna think, I have over 450 questions that I have developed that I use when I’m about to think about something.

If I’m about to think about buying a business or starting a business or growing a business, or if one of my businesses isn’t as big as I want it to be, I know how to do that, and so I just begin asking myself these questions that I’ve developed, and that's what critical thinking time is. Critical thinking time is really asking yourself questions.

I think the second part that goes along with this, and I’ll show it up here in a second so you can take notes, critical thinking is not only about thinking time, it’s also about clarity of the problem. Clarity on the problem. What is the problem? Here’s the way that looks for me. Can you all see this okay? Are they getting it up there? Okay, good.

All of us have an “is” line in our lives. There's something that is, and I think one of the problems that people have is they rarely tell the truth about what is in their lives. People don’t tell the truth. I mean, think about it. When was the last time you truly told yourself the truth about anything? Not only that, we don’t even have people around us to tell us the truth.

You know how I know that's true? It’s because right now, every single person in this room can think of a friend or a family member who is in the process of screwing up. I mean, not a little, big. You’re watching them screw up right now and you’re not saying anything. You’re keeping the peace. You don’t wanna screw up this year’s Thanksgiving. So let's say nothing. People don’t tell themselves the truth. People don’t surround themselves with people that will tell them the truth. People don’t have someone around them that watches them swing.

I think one of the great things about being in a partnership—it’s a partnership that I have with my wife Sandy, I mean it’s a partnership not only in relationship, it’s a partnership also in our life, in our business—there is no separation. I mean, it’s work and personal and everything is kind of in one big blob, but we’ve given ourselves permission to tell each other the truth.

That's extraordinarily powerful. Without somebody else telling me what they see, I will be blind. It’s called a blind spot. You have them, I have them. That's why Tiger Woods has six coaches. The reason Tiger has six coaches is because he can’t see himself swing. You can’t see yourself swing. And so what we tend to do is keep doing the same thing over and over again, and we don’t tell ourselves the truth.

Is there anybody in here who really and truly believes that they have been consistently telling themselves the truth? I mean, really? We don’t. We don’t tell ourselves the truth. I mean, we don’t put on a seatbelt, we don’t eat right, we don’t exercise. We somehow are relying on hopium and luck in order to become wealthy. We think that we can become wealthy without learning critical skills and tools. Have we lost our mind?

We think we can become wealthy by changing our mind? Michael Dell did not get rich by changing his thinking. That's not how he did it. It’s not how Warren Buffett did it. Is it important that you have good psychology? Of course. But if that's all you do and you expect to get rich off of that, you just look at the most successful people on the planet and ask yourself the question, “How did they do this?”

Is it because they sat down and read a book and changed their thinking or is it because—their psychology was good, but what’s the core reason they got rich? It isn’t because they read a book. It isn’t because they took a seminar. It’s because they got off their big fat butts and went out there and learned critical skills and tools, and then practiced and corrected and practiced and corrected and practiced and corrected until they became a master. That's how they did it.

Name one person who is one of the 10 wealthiest people on the planet who got there by doing the least, who got there by cutting in line, who got there by relying only on their natural talents. Name one. Name one person who is the best in the world at anything, I don’t care what it is, riding a bicycle. There's somebody out there who is the best in the world at it. Making money, investments, there's somebody out there that's the best in the world in them. Building computers, there's somebody out there that's the best in the world at it.

Whatever business you happen to be in, there's somebody out there who is the best in the world at it. Name one person who is the best in the world who got there by doing the least, who got there by cutting in line, who got there without learning critical skills and tools, who got there without being an apprentice. I just said something very important. Very important.

Every single master on the planet, I don’t care if you’re talking about Tiger Woods, if you’re talking about Warren Buffett, if you’re talking Vladimir Horowitz who is one of the great pianists of all time, you could be talking about Michelangelo, every single master at one time was an apprentice. Why were they an apprentice? So that they could learn what doesn’t work.

Holy cow, if you had to go out and remake every single mistake that Michelangelo made or that Lance Armstrong made or that Warren Buffett made, the reason you study with masters is so that you don’t have to repeat all the mistakes and you can find the things that do work, and then stand on their shoulders. You have to be an apprentice.

And most people don’t wanna be an apprentice anymore. Most people, the concept of being an apprentice has totally been lost. You go back a hundred years and if you found a master cobbler or a master craftsman, at one time they were an apprentice, and once they become a master, they have apprentices working under them. We’ve lost that concept.

I was giving a speech to a bunch of MBAs, and somebody in the audience raised their hand. These are freshly minted new MBAs. Somebody raised their hand and said, “Keith, who do you think is the best person we could go to work for?” and I looked at him and I said, “Well, I mean, the person you should go to work for is the person you admire the most.”

And about two weeks later, I received a call from the dean of the MBA program and the dean said, “What in the world did you tell all those people?” I said, “Why, I told them they should go to work for the person they admire the most.” He said, “I know. They’re all going into business for themselves.”

You gotta tell the truth about what is. If you don’t have skills and tools, you can’t be hacked off that you’re not accelerating your pace to what you want. So, telling the truth about what is. So, we all have an “is” line. We also all have an “ought” line. An “ought” line is an ought. Ought is the way we would like for it to be. Is is the way it is.

What’s the difference between is and ought? What’s the difference? What do we call that? Yeah, we call that the problem. The difference between what is and what ought is what we identify as the problem, right? Hello? Yes, that's the way we do it.

So what I want you to do on your piece of paper right now—nobody’s gonna look at it. Nobody’s ever gonna see it. I’m not gonna call on you. You’re not gonna have to turn around and share with your neighbor, so here’s an opportunity to tell the truth. What I want you to do is write down on your piece of paper one of your top three problems. Now, watch. Here’s how you do it. Here’s what you do. Watch me.

You get your pen and you cover it up so nobody can see it, and you write really, really, really small so nobody can see it. But you’re not gonna have to think about this. Everybody in here knows what one of their top three problems is. Ten seconds, write down one of your top three problems. Ten seconds. You already know what it is. You don’t need to think about it.

Good. You got your top problem down? Everybody got it? Anybody sitting there going, “I don’t know. I don’t have anybody problems.” Everybody’s got problems. Everybody’s written one down, right? Let me ask you a question. Is what you just wrote down really the problem? No, it’s not. I guarantee you what you just wrote down is not the problem.

What you just wrote down is the symptom, but you did not write down the problem. People are unaware of what their problems are. That's part of what this is. You gotta get clarity on what the problem really is. Most people are trying to solve the problem that isn’t. If you wrote down that “I don’t have enough money,” if you wrote down “my health,” if you wrote down “my relationship,” I don’t care what you wrote down, that is not the problem.

If you wrote down “I don’t have enough self-discipline,” that is not the problem. The only people fooling around with self-discipline and self-motivation are the people who are doing the best they can. There's a reason why we don’t have what we want in our lives. The reason is because we’re all busy doing the best we can. When’s the last time you got up in the morning and said, “Okay, today I’m gonna do the third best I can all day long?”

We don’t do that. All day long we’re doing the best we can. You got up and for the last umpty-ump years you’ve been doing the best you can, and here’s what you got right here. It’s your life. It’s not that there’s anything wrong with it, but all of us would like to have more in our lives, and one of the things that’s holding us back is this issue of doing the best we can, and the people who are fooling around with self-discipline and self-motivation are people who are doing the best they can as opposed to masters who don’t do the best they can. Never have, never will.

Masters do whatever it takes, and that is an entirely different ballgame. That's a whole different ballgame. I mean, I want you to think about it. If they brought in a whole tableful of crack cocaine and put it right here, a hundred kilos of crack cocaine, put it on this table and said, “Keith, you can use this crack cocaine, you can sell this crack cocaine, you can have a party with this crack cocaine, nobody will ever know.”

I’m not gonna sit here and go, “Oh my God, crack cocaine. How am I gonna keep myself from taking a toot?” It ain't gonna happen. Crack cocaine is a nonevent. I don’t need any self-discipline. I don’t need any self-motivation to take that crack cocaine, dump it in the toilet, presto, bingo, I’m done! I’m not doing the best I can with crack cocaine. That is non-negotiable.

Write this down. The quality of your life has nothing whatsoever to do with your standards. The quality of your life has nothing whatsoever to do with your standards. The quality of your life, where you are in your life, is a direct reflection of what you have made non-negotiable. The quality of your life is a direct reflection of what you have made non-negotiable, and most people when it comes to critical thinking, a) don’t do it, I mean what most people call thinking is nothing more than rearranging preexisting prejudices.

What most people call thinking is nothing more than rearranging preexisting prejudices. They don’t really think. And if they do think, they’re not clear on what the problem really is. They don’t tell the truth, or if they do decide to tell the truth, what they’ve identified is not the problem but rather the symptom, and what most people are spending all their time doing is trying to solve the problem that isn’t.

Holy cow, no wonder nothing’s changed and we’re all working on the problem that isn’t as opposed to the problem that is. Does that make sense? Hello?

Yes!

How you doing? Oh, you’re running out of ink?

Yes!

Good, that's what I want. Keep on talking, yes ma’am. Are you about to tell me something? Can I what? Of what? A practical example of what? The quality of your life is a direct reflection of what you have made non-negotiable. Not your standards. Everybody I know has high standards. Do you know what the problem is? The problem is exceptions are the enemy of excellence. That's the problem.

Exceptions are the enemy of excellence. That's not Keith. That's Aristotle. Aristotle said that. We wind up running our lives with exceptions. We don’t plant a stake. What’s your name? Ming. Ming, watch. We don’t do this: “I will not tolerate exceptions.” We don’t do that. We don’t even want to commit. You know why we don’t wanna commit? Because you can’t commit if you’re still looking. We don’t wanna stop looking. We wanna keep all of our options open.

Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness concerning all acts of initiative and creation. There’s one elementary truth, the ignorance of which has killed countless ideas and splendid plans, that the moment one commits, providence moves too. All manner of meetings and material assistance arise in one’s favor that no man could have predicted.

You’ve heard that all your life. We just don’t pay any attention to it. What’s non-negotiable? Your time? You don’t ever make exceptions? You do make exceptions? Sometimes. There it is. Sometimes, she makes exceptions, ladies and gentlemen. There it is. We all do, and that's what’s holding us back, because everybody believes that if you do the best you can, you can have what you want. You can’t. You can’t have what you want if you’re willing to do is the best you can.

So that's number two. Number two—I’m working on critical thinking here, critical thinking is about: Number one, taking thinking time. Number two is getting clarity on the problem. Number three, who in here has ever been on a debate team? On a debate team? Good. For those of you that have been on a debate team, you’re gonna recognize this. For those of you that haven’t, let me tell you what it looks like.

If I was on a debate team, my debate coach would bring me a subject. They would say “capital punishment,” and they would say, “Keith, you are to prepare for the debate.” They don’t tell me whether I’m for or against it. They just tell me to prepare for the debate. And my coach knows that I’m ready to go into the debate once I can successfully argue either side.

I just said something very important. You gotta be able to argue both sides. You gotta be able to win the debate arguing for, and be able to win the debate arguing against, and once you could win the debate by arguing either side, now you’re ready for the debate. The same thing happens with business, business decisions, investing. All of that is the same.

Most people get anchored to a certain way of thinking. They start seeing what they wanna see that supports their previous conclusion, and they begin seeing only the data or only the information that reinforces that. And what I tell people is this. Get ready to write this down. You have to take some notes on this.

“The quality of your investment decisions is a direct reflection of the number of competing thoughts you can simultaneously entertain.” Before you decide to invest, what you gotta do is have some conflicting thoughts. Why should you do it? Why shouldn’t you do it? What could go right? What could go wrong? And most people when they get ready to invest don’t ever have those kinds of internal dialogues. They don’t even think about it.

Most people get blinded and they say, “Oh God, love the idea,” and so they start moving towards that idea as opposed to saying, “Wait a second. Could something happen? Could something go wrong? Could this thing turn out to be a mess?” Most people never even bother to think about it. So that's number three. Have a debate. Have conflicting thoughts.

Number four. This is critical thinking. Number four is any time you’re using your emotions, rest assured that you’re thinking about the idea, the brilliance of the idea. So actually on this, it’ll come up in a second on the screen. So emotions equal idea. Most people get enamored with the idea, like old Rotoblock. They get enamored with the idea. “Holy cow, here’s this engine, 50% more horsepower and it’s more energy-efficient, and it’s going to these emerging markets. It’s not as complicated. Boy, what a great idea.”

I’m gonna tell you something. Pay very close attention. Name me any product or service. I don’t care what it is, cheeseburgers, shoelaces, hotels, casinos, magic markers, teaching. Name me anything. I don’t care, whatever business. What business are you in? Real estate. Charity business. Good. What business are you in? Wellness.

I don’t care what industry you tell me. [1:23:52] Pick it. Give me one week, and within one week I’ll name you at least one person who’s made millions in your business, in your industry, at least one person who’s made millions and at least a hundred people who have gone bankrupt. In your business.

Write this down. It’s never what you do, it’s how you do it. Your success, your wealth, will never be dependent upon what you do. It will always be dependent upon how you do it. Some of you have heard me—who’s heard me speak before? Oh, bless you. Thank you. I’ve used this example. I love this example.

Think about if you were gonna leave here and this next week there was gonna be an anniversary, a birthday, a celebration, there was gonna be a race, you just closed a big deal, made a ton of money, something was happening where you decided to go and eat out. You can think of the restaurant that boy oh boy, if you were really gonna blow one out, this would be the restaurant you would go to. You know which restaurant? Everybody in here thinking of a restaurant? Yeah?

Nobody in here’s thinking about McDonald’s. Nobody. Nobody’s thinking about McDonald’s, and yet nobody has made more money in the history of mankind in the restaurant business than McDonald’s. Let's take a hard look at the product. It sucks! It tastes like poo-poo! Their french fries are pretty good. The product is intergalactically horrible! The worst food on the market! And yet nobody’s made more money in the history of mankind! Not only that, if you eat enough of it, it’ll kill you! Right?

So here’s McDonald’s marketing plan. Let's serve truly crappy food to our customers, and if our customers eat enough of it, we’ll have no customers. It’s not about the product. Can you make a lot of money in cheeseburgers? Of course, you can. Can you go bankrupt in cheeseburgers? Of course, you can. Can you make a lot of money in real estate? Of course, you can. Can you go bankrupt in real estate? I mean, the list goes on and on and on. It’s never what you do, it’s how you do it.

And so the whole idea then is using your intellect. What you’re gonna be focused on is less about the idea and more about the execution of the idea. Execution, management intelligence. Who knows how to actually implement this idea? So this is part of critical thinking. So I’ve talked about think time, I’ve talked about getting clarity on the problem, I’ve talked about having a debate and some conflicting thoughts, I’ve talked about don’t use your glands, don’t invest money based on the idea. Invest money based on your intellect.

And the reason most people have to rely on their emotions—who in here has ever invested money and lost some or all of it? Look around. Look around. How in the world did that happen? I’ll tell you how it happened. I’ll guarantee you 99.9 times out of a hundred, looking back on it now, you’re looking and going, “What was I thinking about? I could have had a V8!”

We look back on it in hindsight and we can see that it was an emotional-based decision to invest the money, and the reason that most people have to use their emotions to try to make money is because they don’t have the skills and tools. Holy cow, if you don’t have the skills and tools, you have to use your emotions. You got nothing left.

You take a look at all the money that you’ve lost. Think about this. If you still had all the money that you lost, where would you be right now? Write down on your piece of paper. Here’s how much money I’ve lost. And that's just the stuff you wrote a check for. That didn’t account all the opportunities that are waltzing past you every day and you don’t have the skills and tools to recognize.

That didn’t account—how many people in here have a business right now? Good. Let me ask you a question. How happy would you be if your business was twice the size that it is right now? I can teach you how to do that. That's what I do. I’ve done it.

We were just in Paris teaching a followup seminar to a seminar that I taught in April. There were 60 people in April. There were a hundred people this last week in Paris, and every one of them came to me without exception. If they did what I told them to do, they had increased the size of their business by 20 or 30% in six months.

I had one person who is a lawyer, who is a patent lawyer, they say “[1:29:48],” we say “[1:29:49],” a patent lawyer, very narrow niche, her business hadn’t grown in eight years, and since April, what is that, seven months? She has doubled the size of her business and it has not grown a lick. I mean the reason people don’t grow their business—I’m gonna tell you right now, the miracle of Michael Dell is not that he started the business. Any idiot can start a business. Most idiots do.

It’s not that hard to start a business. Anybody can do that. The miracle of Michael Dell is that he grew it. That's the miracle. If you’re in business and you don’t know how to grow it, if you don’t know the next step, if you don’t know how to raise money, if you don’t know how to hire people and go to town—how many people in here have the thought that customers are number one? Customers are number one? I guarantee you your business ain't growing. If it is, it’s temporary.

Customers cannot ever, ever, ever, ever under any circumstances be number one. You make customers number one and you’re gonna not be in business very long. Your business will not grow. What’s required is not customers number one. Employees have to be number one. Indifferent people deliver indifferent service.

You know why most businesses aren’t growing? It’s not because they’re not adding new customers, it’s because they’re not keeping the customers they got. Let me ask you a question. How big would your business be if you still had every single customer that had ever tried you? How big would it be? It’d be freaking enormous, wouldn’t it? It’d be double, triple, 10 times the size that it is right now.

The problem is everybody’s focused on the wrong thing. The reason they’re focused on the wrong thing is because they’re not learning the critical skills and tools that will allow them to be successful, so therefore they have to rely on their emotions instead of their skills and tools.

Masters have rules. Masters always, always, always have rules. I got 21 investing rules that I have that protect me from me, and if I see a deal that doesn’t fit my rules, I don’t do it. I mean, too often people will eat anything that comes flying across the table as opposed to saying, “Wait a second, there are certain things if I’m gonna be successful with my weight, there are certain things I can eat, there are certain things that I can’t eat.”

But if you just eat everything that your eye catches, you’re gonna wind up having a weight problem, having a health issue. And so the people who are the most fit, who are the most successful with their health, are the people who have made rules, and then, Ming, they’ve made them non-negotiable. They quit doing the best they can. Are you with me on this, Ming? Good.

So you gotta have rules, and I think most people who invest don’t have investment rules, which then allows them to meet their worst enemy. I think one of the rules you gotta have is “stupid in small things.” Let me tell you what this is about. Warren Buffett, who I happen to think is an absolute stud, Warren Buffett was on the golf course, and he and his buddies got to a par three. And a par three on a golf course is the only hole where you have a legitimate chance of making a hole-in-one.

So they get up to the par three and Warren’s all ready and he’s about to take a swing, and his buddies who are with him say, “Warren, let's have a bet on this hole.” Warren said, “Okay, what’s the bet?” They said, “Twenty bucks. Twenty bucks, Warren. If you don’t hit a hole-in-one, you give us 20 bucks.” Warren said, “But what do I get if I do hit a hole-in-one?” They said, “Well, we’ll give you 20,000. If you hit a hole-in-one, we’ll give you 20,000. If you don’t hit a hole-in-one, you give us 20 bucks.”

Warren said, “Well, the problem with that is that that's only a thousand to one odds. I mean, I could stand here and hit a thousand golf balls and probably one of them wouldn’t go in the hole. I mean, it’d probably take me more like 10,000 before one went in the hole.” So Warren said to them, “Alright, look, I’m willing to do the bet. I’ll give you 20 bucks if I don’t hit a hole-in-one, but if I do hit a hole-in-one, you give me 200,000.”

They said, “No deal.” Warren said, “Well, then I’m not gonna take the bet.” They said, “Warren, it’s 20 bucks. Son, you got 45 billion dollars. You’re so rich you’ve given 32 of it to your friend Bill Gates to give away.” Last year, Warren Buffett’s income, net, was 100 million a week. A week. Warren said, “No bet.”

They said, “Warren, it’s 20 bucks.” Warren said, “Bad odds.” They said, “Warren, it’s 20 bucks!” Warren said, “Stupid in small things, stupid in big things.” Write that down. Stupid in small things, stupid in big things. You know what’s keeping you from becoming as rich as you want? It’s not the big things.

People are pimping their rides. They’re pimping their computers, they’re pimping their clothes, they’re pimping their vacations, they’re pimping their houses, and then they don’t have skills and tools. They don’t know what’s causing them to make money in real estate over the last three or four years, and therefore they’re doomed to lose it.

It is following the herd. “What are the Joneses doing? Oh, I’ll do that, too.” Do you know that out of a hundred people, by the time they get to 65, only two will be financially self-sustaining? Two out of a hundred. By the time they get to 65, two out of a hundred will be financially self-sustaining. Holy cow, if you look around to see what everybody else is doing, you’re gonna wind up like them. That's the problem.

So, stupid in small things, that has to be a rule. You have to have a rule, and this is one of my rules, speed kills. The faster you try to do anything, the harder it is. The faster you try to get rich, the faster you try to get healthy, the faster you try to create a great relationship. The faster you try to do anything, the harder it is.

See, the problem is there are two kinds of time. There are two kinds of time, and we don’t do a good job of making a distinction about this. There is vertical time, that's 24 hours, and then there is horizontal time. A horizontal time is a lifetime. And most people wind up using the wrong kind of time.

Let me give you an example. Let's suppose that we lived in a valley and in our backyard is a 300-foot-high dam that's going straight up, that's holding back this huge body of water. So there's a dam holding back this huge body of water. We wake up in the morning, we go outside onto our patio, we look up at the dam, we’re drinking our coffee, and we see a crack in the dam. What do we say? Dam!

We go inside, we look in the yellow pages under dam repair people, we call the dam repair person. The dam repair person comes out, looks at the dam and says, “I can fix the dam.” You say, “How long?” The dam repair person says, “Twenty-four hours. It’s gonna take me 24 hours. How would you like for me to do this? Would you like for me to repair your dam in 24 straight hours or would you like for me to spend 30 minutes a day for the next 48 days? How do you want me to repair the dam?” You say, “Twenty-four straight hours. Let's get this thing fixed,” right?

So while the dam repair people are fixing the dam, you think to yourself, “Well, I’ve always wanted to grow a tomato plant.” So while the dam repair people are fixing, you go to the nursery, and you get to the nursery and you find a pot, and you find the soil and the fertilizer and the right kind of mineral water and the grow lights, and you get the little tomato seeds, and you’re about to check out and you say to the nursery person, “How much of my time is it gonna take from the time I plant the seed until I eat a tomato? How much of my time?”

And the nursery person says, “It’s gonna take 24 hours.” So when you get home, do you plant the little seed, put some water on it, put some fertilizer on it, put the grow light on it, put the sand and loam in there, spray it for bugs, dig the seed up, replant the seed, go through this 24 hours just keeping digging it up, planting it, putting the fertilizer on it, putting the grow light on it, spraying it for bugs, do you do that for 24 straight hours or do you spend 30 minutes a day for the next 48 days?

Thirty minutes a day for the next 48 days, right? Anything that requires lots and lots and lots of vertical time is called a crisis. A crisis. And speed is not your friend when it comes to creating wealth. Wealth is built based on compounding, and compounding takes time. So, speed is not your friend when it comes to money because every time you feel like you wanna go fast, now all of a sudden you slip into your emotions instead of using your intellect.

Look at the money you’ve lost and think about how long it took you to make that much money. I mean, you know, maybe you’ve invested $40,000. It might have taken you two years to save up $40,000. Maybe you only invested 5000 and lost it. I mean, maybe you can earn 5000 in a month. I’ll guarantee you, however much money you’ve lost, you didn’t spend very much time, you didn’t even spend a fraction of how long it took you to make it in order to make the decision to invest it and lose it. Is that true? Yeah.

Holy cow, what are we doing? There's a reason why we’re not rich. We’re not using our brain, we’re using our glands and our emotions. Speed kills. I love this cartoon that you’re about to see, so watch this on the monitor up here. Here we go. It’s a cartoon. Lemonade, 500 bucks. “I just wanna sell one and call it a summer.” That's what most people are doing right there. I mean they’re trying to get there so quick that they’ll never be successful. I think that's a problem. Core competence.

Look, one of your rules has to be core competence. If you’re gonna invest money, it needs to be in something you know something about. Here’s what core competence looks like to me. Every time you invest money inside of your core competence, you’re investing, and every time you put money in something outside of your core competence, you’re speculating, you’re gambling, you’re hoping to get lucky. That's what you’re doing.

I remember when I was raising lots and lots of money, one of the things that I would do is if I had a real estate deal, I never took it to other real estate people. I always took my real estate investments to people who were doing oil and gas, because those guys are all looking over the fence going, “Holy cow, look how much money all those real estate people are making.” But they had no competence.

If I wanted to do an oil and gas deal, I never took it to oil and gas people, I took it to the real estate people. All the real estate people are sitting there going, “Holy cow, look how much money those oil and gas guys.” You can take any deal to a doctor and a lawyer.

I mean, think about it. You have to be very clear about what your competence is. What are you good at? What do you know something about? And what most people do is, most people lead with their money. So you can make your core competence get bigger, you’re not stuck with what you got. Everybody in here knows a bunch about something.

Everybody in here knows a bunch about something. It’d be very difficult for somebody to pull the wool over your eyes on what you know a lot about, but what you know a lot about is this size right here. This is how big it is. In order to increase the size of your core competence, you begin spending time and you start surrounding yourself with people who are experts, you spend time, you spend time, you invest time, you invest time, and pretty soon you have expanded your core competence, and now the investment is inside your core competence. But you don’t lead with your money.

And that's the problem. Most people hear about something, they start chunking money at it as opposed to saying, “Let me invest my time and learn about what I’m about to put my money into.” Does that make sense? It’s very powerful. I saw this cartoon, and this reminds me of kind of how we tend to do it.

“Through the hoop, Bob! Through the hoop!” We got a turtle trying to jump through a flaming hoop. I mean, the problem is the little turtle has no core competence. The little turtle can’t jump through the hoop, but we’re sitting there urging the thing along, and it’s totally outside of our core competence.

Critical thinking means asking questions. The better the questions, the better the thinking. Tony Robbins. I love him. Sandy and I do a lot of work with that organization. In fact, we’re very fortunate, we’re on the board of directors of his foundation, which is a very powerful foundation. Tony Robbins says that the quality of your life is a direct reflection of the quality of the questions that you ask yourself.

The quality of your life is a direct reflection of the quality of the questions you ask yourself, and I think most times people ask themselves either horrible or debilitating questions. I think the most powerful question you can ask yourself is the question you’re about to see on this screen. It’s by far the singularly most powerful question you can ask yourself in any aspect of your life, investing, business, anything. Anything.

“What don’t I see?” What don’t I see? I believe that question is the singularly most powerful question I’ve ever used in helping me, and I will tell you what I don’t see. What I don’t see is my assumptions. What you don’t see is your assumptions, which is another way of saying that the quality of my life is a direct reflection of the assumptions that I’m making, and most people don’t ever bother to look at assumptions. They don’t ever bother to look at the assumptions they’re making.

One of the things that I have is that I wear these little bands. You probably have seen some like this but this one has written on it, it has “What don’t I see?” And the reason I did these is because, and I have a whole slew of them back there at our table, there should be enough for everybody, but the reason I did these is because I think it is an extraordinarily powerful reminder. I think it’s an extraordinarily powerful reminder. That's all I got. That was a good snag.

It’s an extraordinarily powerful reminder, so if you want one of these, I highly recommend it, I took mine off and threw it out there. I’ll be getting another one at the break. It’s an extraordinary reminder to keep me focused. What’s going on in my life is a direct result of unquestioned assumptions.

What I don’t see is what costs me money over and over again, and I’m gonna suggest to you that what you don’t see is what’s busy costing you money. And if you’d like to have one of those little bands, come back to our table, we’d be happy to give you one. I’m gonna be around actually all afternoon, I’m gonna be here this evening, I’m gonna be here all day tomorrow to be able to answer questions, to be able to interface with you.

I mean, Sandy and I own a number of businesses, and we teach because that's what I wanna do. That's what she wants to do. We have at this point in our lives said that what our lives are about is mastery not success, and mastery is for me to be able to fulfill my dream of “if I could have one last thought.” It’s very powerful.

If you could have one last thought and then you died, what would you want that last thought to be? What a great idea to start with the end in mind. That's Stephen Covey. Shoot, that's Aristotle. That concept has been around for a long, long time. What would happen if you began designing your life so that if you had an opportunity for one last thought, what do you want it to be?

I actually was asked this question during my sabbatical. Part of my studying the world’s religions involved Hinduism. I’m not Hindu but I studied it, and I’ve actually spent time with a Hindu guru, and this Hindu guru taught me a lot. One of the things he asked me was, “Keith, if you had an opportunity for one last thought, what do you want it to be?” And by answering this question, it allowed me to exit the sabbatical, recreate my wealth and get on with my life.

And ultimately having thought and thought and thought, here is what I want the answer to be. If I get to have one last thought, it would be, “Whoa...whoa…whoa…that was spectacular. This is my life. I’m proud of it. I would gladly live it again if only given an opportunity. Whoa!”

I’m gonna suggest to you that's playing at a different level. I’m gonna suggest to you that's not about creating wealth. It’s about creating mastery. It’s about creating the best me. Is part of it getting rich? Of course. Of course, it is. Is part of it creating the best of me? Yes, that's it. Something to think about. Something to think about. How you doing?

[Applause]

Thank you. Thank you. Thank you.

It’s extraordinary to me if you think about the human spirit. I mean, today we live in the information age, and I’m telling you if the key to being successful was to have tons of information, everybody would be there. I think what’s needed is for us to leave the information age and to enter the inspiration age, and that's a whole different ballgame.

That's a whole different ballgame, finding and tapping into your spirit. I heard somebody say one time, I wish I could remember the author, so I’m quoting somebody, I just don’t know who, but they said this. They said, “Inspiration is a gift from the part of you who knows to the part of you who wonders.” I think that's exceptional.

Inspiration is a gift from the part of you who knows to the part of you who wonders. I think at some level we really do know. I think we really do, and there's a part of us that wonders. Whatever it is that inspires you, and for us it’s teaching. That's the thing that inspires us. I like making money. I’ve been rich, I’ve been poor. Rich is better. A lot better. But it just gives me more options, that's all it does. Getting rich doesn’t inspire me. There are other things that inspire me.

So whatever it was that you just tapped into when we were talking a second ago, that is the part of you who was inspired, and that's the part I think you have to keep tapping back into. I think you have to keep tapping back into, “What inspires me? What juices me?” And so thank you for letting me be a part of that. I’m gonna keep going. I’m gonna talk for a second because I told you one of my heroes is a guy named Warren Buffett. I’m gonna give you some quotes from Warren Buffett. They’ll come up here on the monitor. Critical thinking time.

Here’s what Warren Buffett said about critical thinking time. “All man’s miseries derive from not being able to sit quietly in a room alone. An investor who is encouraged by his advisors to do a deal responds much as a teenage boy who is encouraged by his father to have a normal sex life. It’s not the push he needs.” I think that's true.

Here’s what Warren Buffett has to say about conflicting thoughts. Why shouldn’t we invest? “Do all your thinking before you do the deal. Imagine all the things that could go wrong because they probably will. Optimism is the enemy of the rational investor.” Now look, I’m all in favor of intention. I love The Secret. But at the end of the day, what’s getting taught is not the law of attraction.

The law of attraction says you move towards it. You can’t sit in a room all by yourself, lock all the doors and somehow, presto, bingo, hocus pocus, there's gonna be a big old pile of money or a beautiful spouse sitting next to you. I mean, that ain't gonna happen. Come on.

We were teaching in London and this woman came up to me and said—it was this business mastery program that I teach where I teach critical skills and tools, and it’s always two sessions. There's a first session, and then a little bit of time goes by and everybody goes and does work, and then we do another session. And we were teaching and she came up and I said, “What are you gonna work on in between?” She said, “I’m gonna work on winning the London lottery.”

I said, “Well, how you gonna do that?” She said, “Well, I’m gonna buy lottery tickets and I’m gonna sit around and meditate, and with the law of attraction I’m gonna win a 10-million-pound lottery.” I said, “Look.” Her name was Sylvia. I said, “Sylvia, that's a great plan. Can we have a plan B just in case?”

I mean, because I do believe in the law of attraction, I really do, but I also believe that there's a big difference in the skills and tools it takes to make money and the skills and tools it takes to keep it. Those are two entirely different sets of skills. I know a lot about making money, and this time around I’m learning how to keep it.

This is my third fortune. I wanna avoid pissing those things away. I mean, it takes a lot of work to do that. So this one I’ve kept for about 12, 13 years, and I’m happy. I’m doing things very differently now than I used to. I have a different set of rules. But you gotta have conflicting thoughts, and optimism is not your friend. When you’re dealing with money, optimism is not your friend.

Warren Buffett on intellect versus emotions, he says, “Ignorance, when mixed with greed, is the stuff financial disasters are made of. A public opinion poll is no substitute for thought.” He’s right. Here’s what Warren Buffett says on the subject of rules. “Rule number one: Don’t lose money. Rule number two: See rule number one.”

I’m telling you. I mean, this stuff is very powerful. This guy clearly knows what he’s talking about. I mean, if we’re gonna emulate somebody, let's emulate somebody that's eating his own cooking, right? Does that make sense? I mean, when you think about it, there's two kinds of hay. There's hay before it’s been through the horse, and I think there's a lot of people out there that are grazing on the hay that's already been through the horse, and then they’re wondering why they’re not getting big and plump and fat. They’re eating the wrong thing.

Look, if you’re gonna model somebody, make sure you model somebody that's actually doing what they teach. Speed, I love this. Watch this. Here’s what Warren Buffett says about speed, “We adopt the same attitude one might find when looking for a spouse: It pays to be active and open-minded, but it does not pay to be in a hurry. You cannot produce a baby in a month by getting nine women pregnant.” Now, this is true. This is true. I like this.

Stupid in small, here’s what he says, “In my world, little things really do matter. An undisciplined mind in small things will also be an undisciplined mind in large things.” Look, either you’re intellectually rigorous or you’re not. If you’re stupid in small things, you’re gonna be stupid in big things.

Let me talk for a second about mastery and about core competence. In fact, if you look back at Rotoblock—sorry, here’s what he says about core competence. This is Warren Buffett. “The greatest personal fortunes in this country weren’t built on a portfolio of 50 companies. That's the Noah’s Ark way of investing. They were built on one wonderful business. Almost without exception, when they strayed from that wonderful business that made them rich, they ended up losing money.” That's what Warren Buffett has to say about core competence.

What don’t I see? Here’s what Warren Buffett says. “A pen lies in wait for every bubble, and when the two eventually meet, a new wave of investors learn some very old lessons.” I think it’s absolutely true. Look, if you’re gonna listen to somebody, don’t listen to me. Don’t believe me. Let's believe somebody who started with zero and in his lifetime created 45 billion of real live money, last year 100 million a week. A week! Clearly, he knows something and is doing something the rest of us aren’t.

Look at Rotoblock. Remember Rotoblock? You remember that? That little engine that could? Let's think about our investment. Whether you put down zero or a thousand or $5, I don’t really care. I’d be curious. How many people said they would do zero? Let me see those hands. Good, for you. How many people said they’d do something? Alright, good for you. This is a learning opportunity.

Let's look at Rotoblock in light of what we just talked about. Did we have any thinking time? No. Did we have clarity on the problem? No. Did we have any conflicting thoughts? Well, if you said yes, to invest, you had no conflicting thoughts. You didn’t look at what could go wrong. You just said, “Holy cow, look at this great idea.” You used your emotions versus your intellect.

Was Rotoblock within your core competence? If you said yes, what in the heck do you know about engines? What in the heck do you know about startup businesses? What in the heck do you know about India and China? What in the heck do you know about ethanol? I’m gonna tell you right now, the deal that I showed you is a real deal, only it wasn’t sent to me. It was sent to somebody else and they sent it to me to use as an example when I teach.

You should not, everybody look at me, look at me, whatever you do, do not go out and buy this stock. Don’t do that. I’m using it as an example. I don’t know whether this is a good deal or a bad deal. All I know is I don’t know anything about engines, I don’t know anything about manufacturing, I don’t know anything about automobiles, I don’t know anything about China and India, I don’t know anything about ethanol or hydrogen, I don’t know nothing about nothing.

So, therefore, I’m not gonna even look at this deal because I have rules. Did you ask yourselves the question, “What don’t I see?” Most people don’t. Most people don’t, and so they wind up being stupid in small things. “Well, Keith, it’s only 50 bucks.” “Oh well, Keith, it was only 500 bucks.” Stupid in small things. Does that make sense? Good.

There's a very famous football coach in the United States, no longer alive. His name is Paul “Bear” Bryant. Paul—what was it? Roll Tide! Crimson Tide. He was coach at Alabama. Prior to that, he won national championships. He was very, very well-known, very, very smart guy. Born in almost poverty, in fact born in poverty, and he became literally one of the most, and I think the most revered coach in the world.

Paul “Bear” Bryant said one time, “On any given Saturday, I can take my team and beat your team, or I could take your team and beat my team.”

That's serious. That's how good a coach he was. Paul “Bear” Bryant died a few years ago, and when they found him and looked in his billfold, they found what I am about to read you. He carried this around with him for 40 years.

For 40 years, he read it every day. Here’s what it said: “This is the beginning of a new day. God has given me this day to use as I will. I can waste it or use it for good. What I do today is very important because I am exchanging a day of my life for it. When tomorrow comes, this day will be gone forever, leaving something in its place I have traded for it. I want it to be a gain, not loss, good not evil, success not failure, in order that I shall not forget the price I paid for it.”

That to me is extraordinary. This is the beginning of a new day. I will suggest to you that you will not, you will not find what you’re looking for. What is required of you is not a search. What is required of you is a decision, a decision on who it is I want to create. What are the skills and tools that I need to learn? Mediocrity hates decision. Masters embrace decision.

If you’ve learned something over the last two hours, if you’ve made any notes, if this is what I was able to do for you in two hours, imagine what I could do for you in a hundred. If you need help in skills, this is the beginning of the new day. All I can tell you is I appreciate your allowing me to be here today, I appreciate the opportunity that Harv has given all of us to continue our education, and I truly, truly, truly hope that you decide that you will continue your business education with us.

I will be here all through lunch. I will be here all this afternoon. I would love to answer your questions, and I am grateful for the opportunity to have played a part in your education. Thank you.