Why Buying A Car Is A Bad Idea

Why Buying A Car Is A Bad Idea (and what you should do instead)

If you were given $1,000,000 today what is the first thing you do?

The first time I won a bunch of money playing poker, I bought my dream car.
And it made so much sense at the time.

It was a reward for my hard work.

A lined crossed off my bucket list.

A measure of my success.

But all my immediate satisfaction came with a hefty price tag. Because cars depreciate immediately once you drive them off the lot, that impulse purchase costs 30% right off the bat.

And once the newness of the car wears off, all you have is a car.

Hedonism isn’t sustainable. You keep needing more to produce the same high. And even though I loved my M6 BMW more than life itself –  so much, in fact that my 20 year old self would buy it again – I’d never make the same decision now.

Because my priorities have changed. If I could go back and talk my 20 year old self, here’s what I’d tell him.

Status symbols don’t define you.
Invest in things that actually provide you a return.Always buy something used.

If a fancy ride is a must have, at least have the humility to buy it used. Do you really need to spend 30% more to have that fresh car smell and drive it off the lot?

But this conversation is about more than just the car. It’s about how we as a society approach money and decision making

Coveting status symbols robs us from the opportunity to grow rich. Instead of your money making a return of say, 5% per year, it’s doing the opposite!
That 10% difference multiplied over a 10 year period (average life of your car) can seriously add up.

Let’s do the math, shall we?

Your car costs $35,000, but had you bought it used you could have got it for $25,000.

That’s $10,000 you just lit on fire. You’ll never get it back.

Now let’s invest that same $10,000 into a fund that pays 5% annually, for example a Verizon stock that pays dividends (of course, I know that returns aren’t guaranteed. Thank you for playing along with me).

That’s an additional $500 per year. It doesn’t sound like a lot, until you compound the interest.

Year 1: $10,500
Year 2: $11,025
Year 3: $11,576.25Year 4: $12,155.06
Year 5: $12,762.82
Year 6: $13,400.96
Year 7: $14,071.00
Year 8: $14,774.55
Year 9: $15,513.28
Year 10: $16,288.95

So that MUST HAVE new car didn’t just cost you $10,000, but how much you could earn by investing the same $10,000, which in this example is $16,288.95.

How many dream vacations can you take with that money?
What countries could you see? What real memories can you make that will last a lifetime?

It’s missing the big picture to only consider this example in a vacuum. What else in your life can you apply this to?

Are designer clothes, handbags and watches really necessary, or are they eating away at the lifestyle of your dreams.

Don’t trade material for freedom. Because in the end, one is useless. The other is priceless.

Check out today’s video and learn once and for all why buying a car is a bad idea!

What do you think? Would you buy a car new or used? What should our friend do with his new tournament winnings?

Share your thoughts in a comment below!

Thanks for reading.
Alec


How to Think Like a Poker Pro

How to Think Like a Poker Pro (and why it’s important in decision making)

Why is learning how to think like a poker pro important in the first place?

Poker professionals are very analytical.

They evaluate situations logically and most importantly, separate the facts from the noise.

They do two things extremely well:

1) They go deep into analysis.
2) They think independently of the results.

Just because I got caught bluffing, doesn’t necessarily mean it was a mistake. If for example, our opponent folds 80% of the time, then surely it’s a great opportunity to bluff.

Which means that before making the play, bluffing is the correct decision.
Things get confusing when the play doesn’t work.

Was it a mistake to bluff?

Of course not. Just because you got caught (meaning it was one of the unlikely 20% times), the play is still correct.

Why?

Because your expectation in making the play is fixed, and it is not influenced or altered by the results.

The ability to separate the result from the expectation is the very essence of what it means to be a successful poker player.
And that ability is crucial.

How else could a poker player maintain confidence and play well during the inevitable downswings?

In the real world however, situations aren’t always evaluated objectively.

Sports are a great example of a world that is incredibly biased by the results. Rarely do you see commentators evaluating decision making.
‘Well, he made the shot so you have to give him credit,” is a much more common line than “he took a terrible, low expectation shot and got lucky to make it.”

It’s equally rare for coaches (and especially plans) to punish players for poor decision making. Too often they praise outcomes.

The court system is another outcome based industry.

If someone shoots a bullet with intent to kill another human being (but misses), they are punished with an entirely different crime than had they actually shot and killed someone.

It begs the question, does the accuracy of the shooter really change his crime? Shouldn’t he be punished regardless of the end result? (since, in the end, the likelihood he was going to kill someone at the moment he committed the crime is what we are punishing)

Why does this all matter? Because basing one’s opinion on results is dangerous.

Results oriented thinking (formulating one’s opinion based on outcome) neglects the decision making process (which ultimately increases one’s desired outcome).
It rewards people based on outcome, which is often and largely related to luck.

The most trivial example in poker is winning a tournament. The results oriented assumption is that the winner is the best player.
But everyone with a rudimentary understanding of luck knows that it’s not always the case.

To better illustrate my point, I share an example from one of the greatest sporting events of all time, the 2015 SuperBowl.

It talks about game theory and the strategy behind the crucial interception which cost Seattle the game.
Click below and see for yourself how to think like a poker pro and why it’s important to making decisions and formulating opinion.

What did you guys think? Was Pete Carroll a fool for throwing the ball? What would you have thought if they completed the pass and scored a touchdown?

Share your thoughts in a comment below.

Cheers,
Alec

P.S. Want to be featured in future episodes? Have questions about poker or life?
Write to me with questions and I’ll answer them in a video!

P.P.S. Still think I’m crazy? Check out the eloquent analysis from a game theorist in the New York Times who defends me!


Overcome Irrational Fears

How to Overcome Irrational Fears

Mark is a superstitious young man and struggles with how to overcome irrational fears.

He always loses whenever he’s dealt a certain hand. Every time he plays with this one particular dealer he’s destined for defeat.

We all struggle with unfounded worries and crazy superstitions, (which to us, don’t seem crazy!).
But it’s important to remember most of them have absolutely no roots in math or science.

Flying. Needles. Getting eaten by a shark.

They don’t possess any real danger (the chances of dying in a car accident is ten times higher than all these combined), yet they literally paralyze us from taking action.

In this weeks video I share one of my biggest weaknesses, and how, by using logic and the math that I’m taught in poker,
I’ve learned how to overcome irrational fears…. sorta :)

I almost lost it here, but thanks to my lovely wife, I made it through.

What are YOUR biggest fears? Are they really logical or have you been classically conditioned?

Share your thoughts in a comment below!

Cheers,
Alec

P.S. Want to be featured on next weeks episode? Write to me with questions!


How to Make 2015 the Best Year of Your Life!

How to Make 2015 the Best Year of Your Life!

We’re 3 weeks into 2015… right about the time when most new years resolutions fade to black, and are put back on the shelf.

Today we break that trend.

I’ve received so many questions about how to make 2015 better.

“How do I improve at poker?”
“How do I make more money?”
“How do I travel more often?”
“How do I free up my time to pursue my dreams?”

It’s all the same. It doesn’t matter what you want because the ways to get there require similar steps.

Instead of focusing on one specific dream, I’ve systematically broken down the following:

* why dreams fail
* how to turn ideas into reality
* think outside the box to live, do and be whatever you want
* four simple steps to guarantee your success
* create a life of freedom, excitement and choices

Are you ready to make 2015 the best year ever?

Success happens now. Tomorrow is never.

Share this with someone you know and make a commitment to helping each other see your goal through until the end.
And, for my poker players, subscribe now and get your hands on three incredible pieces of content customly designed to up your game, free.

Alec