Good Life Project - The Dark Side of Modeling Success

Episode Date: October 6, 2015

What if one of the biggest pieces of "success advice" was wrong?There's a particular strategy that's become hot in the world of success and personal development. It's been hailed as the secret to accelerated results and success on a level and at a pace, that'd be near impossible without it.It's called "modeling." On the most basic level, the advice is to find someone who has done what you want to do, deconstruct everything they've done to get where they are, then do those same things yourself.Problem is, that can be pretty dangerous advice. It can and often does lead not to success, not to a good life, but to a whole lot of angst, anxiety and failure.Why that happens and what to do about is what we're talking about on today's short and sweet GLP Riff. Hosted on Acast. See acast.com/privacy for more information.

So a bunch of years back, I was kind of a complete dork around the financial market. I was actually a securities lawyer, but the truth was, my secret hidden truth was that I was less interested in the practice of law, and I was just really fascinated by the psychology of markets. You know, what makes them tick? What makes them go up? What makes them go down? What makes them freak out and move?

What makes the people who make them tick make decisions that seem to be at times totally rational, at times massively irrational. And I became fascinated. So I spent years researching and researching and researching to try and find systems, methodologies. I would research and read about the most famous traders in history and how they developed their systems and their approaches and their methodologies. And I would talk myself into any room where I could be in the presence of some of these great traders and learn from them. I would read every book that I could. I would buy from newsletters and stuff like that, all the methodologies. And what I was really

trying to do was understand the psychology, but then find somebody who had developed sort of pragmatic, replicable methodology, a system that I knew, you know, worked, and then basically take that system and use it myself so that I could start to trade the markets using a proven methodology. What I found was that it turned into a big disaster for me. And here's why, and here's what happened. And here's a little bit of a cautionary note. We tend to look for success. And there's a term in the success sort of genre called modeling.

We look to people who have come before us and who have succeeded massively at something that we want to succeed at. And then we try and reverse engineer what they've done. You know, like what's their methodology, their approach, what was their thinking process, what were the actions that they took. And then we turn around and we say, okay, well, if I replicate all of those things, then I should be equally successful. And sometimes that's true. If it's a completely mechanical thing without a lot of psychology, then reverse engineering and then modeling, replicating those steps can work really effectively. But when you start to get into

something where psychology and risk tolerance and nuance is really involved, then modeling becomes pretty fraught with danger. So in my explorations, I finally stumbled upon a system methodology that was proven where the person actually literally took all of the rules, everything, they reverse engineered their own methodology themselves. And they literally built it into a trading software that replicated all the data points that they thought that they were sort of like taking, and then just kicked out buy and sell signals. So I figured, great, it's proven, I will take the system and use it myself, I opened an account. And I started, you know, following the systems and kicked out the first signal and

executed on the trade. And then all of a sudden, it didn't work. I lost a little bit of money. And it may be a little bit nervous, but you know, it's like, look, I'm modeling success here. I'm taking a proven system. It's been reverse engineered. And accurately, because the guy who actually did it, you know, was the one who reverse engineered, I'm just following the actions and decisions that he made. So eventually, I'll be fine. So then the second signal came, and I traded that, and I lost another chunk of money. And I started to get even more rattled. I'm a little bit freaked out here. And then the third signal came, and I traded that, and I lost an even bigger chunk of money. And then I'm totally freaked out,

and another signal. So I'm down a ton of money in my account now, but I'm modeling success in my mind. I'm taking the proven reverse engineered decisions and actions of somebody who's been successful. And I'm simply replicating them. I'm modeling them, but it's becoming a disaster for me. So instead of trading the next trade, I actually do something called paper trading, which means that I don't actually bet real money on it. I just kind of say, okay, well, if I had done this, how would it work out in my account? And it turns out that had I actually placed the trade, I would have actually not only made back all of my money, but I would have made a very substantial profit on top of all

of that. But by then, I was kind of so emotionally gutted from trying to follow the system that I just walked away from it. I shut down and I walked away a loser. A loser in money, but the more I thought about it, a winner in my understanding of modeling and trying to replicate the success

of people who come before us. What I realized was that when you're trying to replicate the decisions and actions that people have taken who've come before you as a way to accelerate your path to success, you also have to consider some additional things. You have to consider, you know, that person's sort of psychological profile, their risk tolerance levels, their abilities to make decisions, their industry experience, their soft information, their intuitive data that they're not even aware goes into the process, and also the moment in time and how that affects things.

What I realized was that my psychology was way more risk averse than the psychology of the person that I was trying to model. That they could have endured the extreme swings in the system that they had developed because their psychology was okay with it. But mine wasn't. So whereas they would keep going and trading and making decisions and eventually make their money back and make a lot more. I was much more risk averse and I freaked out and melted down and couldn't follow the system, even if I knew that it worked because it emotionally just wreaked havoc on me. And I think that's a missing step. When we look at modeling success, we really just looked all too often at the decisions and actions of the people

who have come before us and not the psychological makeup of the people that we're trying to model and whether our psychology, whether our presence, our lens on the world matches them closely enough so that we would actually be able to execute on the same decisions and actions that we took. So I want to plant that seed because it's something that I think is really important to think about as we explore people to potentially look to, to understand how they've succeeded in the past, and then look at the decisions and actions that they've taken and try to reverse engineer them or learn from them and replicate them. Understand it's not just decisions and actions. It's the deeper psychology that allows them to make those decisions and take those actions.

And on a more macro level, it's often a moment, a window in time that supports it that may no longer be there when you're trying to make those same decisions and actions. So think about that, explore it, look beyond what's on the surface, go deeper into the moment and the psychology when you're looking to people and systems and approaches to model as a way to accelerate your success. I hope you found this interesting and useful. As always, I love sharing these ideas with you guys. If you did find it valuable and you feel like sharing it with a friend, that would be awesome. And I always so appreciate if you leave a quick

review over on iTunes. It helps us get the word out. I'm Jonathan Fields, signing off for Good Life Project.