How to Become a Learning Machine
He wasn’t born particularly large, but came to physically dominate his sport. He grew up a poor immigrant, but married into American royalty. He couldn’t speak great English, but became a world-renowned movie star. How does a man with little political experience become the governor of one of the largest economies on Earth? How does he succeed in every endeavor he attempts in both business and in life? How? As he would say:
Reps, reps, reps.
The person I am talking about is Arnold Schwarzenegger and his autobiography is chronicled in Total Recall: My Unbelievable True Life Story. While Arnold would attribute his many successes to his high work ethic (i.e. “reps, reps, reps”), it’s more than that. Arnold was able to succeed in so many domains because he coupled his work ethic with a heavy dose of intellectual curiosity — he became a learning machine. Just look at the way Arnold talked about work:
So for me work just meant discovery and fun…Everything I did could have been my hobby. It was my hobby in a way. I was passionate about all of it.
And Arnold wasn’t just saying this either. He had a very specific method for how he learned:
When I wanted to know more about business and politics, I used the same approach I did when I wanted to learn about acting: I got to know as many people as I could who were really good at it.
It’s this level of curiosity that helped propel him to be so successful so early on. For example, Arnold was a millionaire by 1981, before we ever knew him as The Terminator or Conan the Barbarian, because of his business dealings and real estate investments. He used the same method to succeed here as he did in other realms: meet the right people, learn as much as you can, and do the work.
I know what you might be thinking, “Nick, Schwarzenegger is an outlier. You can’t just pick one person and assume anyone else who acts like them will be successful.” You’re right. Small sample sizes are bad, survivorship bias is real, and luck always plays a role. But, consider what was stated in the study titled The Hungry Mind: Intellectual Curiosity is the Third Pillar of Academic Performance:
…the additive predictive effect of the personality traits of intellectual curiosity and effort rival that the influence of intelligence. Our results highlight that a “hungry mind” is a core determinant of individual differences in academic achievement.
There was even a followup study that had more specific findings:
Within this model, intelligence (.35) accounted for the greatest amount of variance while curiosity (.20) and effort (.20) had slightly smaller and equal and independent impacts on academic performance.
What these studies show is that curiosity and effort together explain academic success more than intelligence alone. In other words, by becoming a learning machine you can overcome deficits in your natural abilities. Grit and inquisitiveness beat genetics.
So how can this help you with your finances? Because by becoming intellectually curious and working hard, you can prevent yourself from making the same mistakes that other investors have made throughout history. Overconfidence? Buy and hold? How to think about risk? My views on all of these topics (and many others) have dramatically changed over the last 18 months because of the things I have learned through blogs, books, and discussions on FinTwit. And I can guarantee that my views will continue to change as I learn even more.
In a similar vein, Michael Batnick just put out his book Big Mistakes where he discusses the biggest mistakes made by some of the world’s greatest investors. The idea is that by seeing how the greats stumbled, you can prevent yourself from falling into similar traps. This is one of the best ways to learn because it allows you to model someone else’s thinking. It’s the same thing that Arnold did anytime he tackled a new topic and look how it worked out for him…
Preaching to the Choir
The irony of me telling you how to become a learning machine is that you probably don’t need this advice. The fact that you are reading these words right now illustrates that you are intellectually curious to begin with. In a world where 25% of Americans don’t read books (I bet it’s actually higher) and some people can’t even name a book, those that go out of their way to keep learning have an advantage. Those advantages, while small now, will compound and become massive over time. So stay curious and keep grinding it out, because I can tell you from personal experience that it is worth it.
With that being said, I will leave with one of my favorite quotes from Arnold’s book, which you should read if you have the time:
No matter what you do in life, it’s either reps or mileage. If you want to be good at skiing, you have to get out on the slopes all the time. If you play chess, you have to play tens of thousands of games. On the movie set, the only way to have your act together is to do the reps. If you’ve done the reps, you don’t have to worry, you can enjoy the moment when the cameras roll.
So enjoy that moment when the cameras start rolling and thank you for reading!
This is post 75. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data