We Study Billionaires - The Investor’s Podcast Network - TIP 059 : The 7 Habits of Highly Effective People (Business Podcast)

Starting point is 00:00:00 We study billionaires, and this is episode 59 of The Investors Podcast. Broadcasting from Bel Air, Maryland. This is the Investors Podcast. They'll read the books and summarize the lessons. They'll test the waters and tell you when it's cold. They'll give you actionable investing strategies. Your host, Preston Pish, and Sting Broderson. Hey, how's everybody doing out there?

Starting point is 00:00:30 This is Preston Pish, and I'm your host for The Inverston. investors podcasts. And as usual, I'm accompanied by my co-host Stig Broderson out in Denmark. And today where you got a book that we've summarized and we're going to be talking about, and it's a really popular book. The name of the book is The Seven Habits of Highly Effective People. And this is written by Stephen Covey. And this one's gone on to probably set a lot of records as far as book sales. So this is a really popular book. If you've never heard of it, it's an extremely popular book. And it gives out some really, really concrete guidance. So before we get to the book, what we're going to really discuss is the current market

Starting point is 00:01:08 conditions, because Stick and I haven't done this for a while. And there has been some really interesting things happen in the market. It was kind of funny. I checked on the forum. And for anybody that knows me personally, they know that I've had a very, very busy schedule lately and really have not had a lot of time to focus on my investments and the podcast and things like that, even though we're rolling out episodes, I'm really struggling to keep pace with my current schedule these days.

Starting point is 00:01:35 And so one of the comments on the forum, this was hilarious, one of the people on the forum said, Preston's been really quiet lately. And I loved the comment because somebody was calling me out because the market, as everyone knows here in October. Stig and I are recording this episode on the 30th of October, just so you know, because some of our episodes have a little bit of a lag, maybe a week or two.

Starting point is 00:01:55 At the end of October, it was probably one, of the strongest months on record in the history of the stock exchange, you can look up these facts here. I don't know if it was the strongest month on record, but it's very close to being the strongest record month. And to be honest with you, folks, if I had to call that, or in August after we saw the market to make a 10% correction in August, I would have never, in a million years thought that we would have such a strong October. And most of that opinion was based on the fact that I thought that the third quarter earnings were going to come in and be very weak and that that was going to drive multiples lower, which is how stocks are traded. We saw our

Starting point is 00:02:41 expectation basically play out with respect to the earnings. The earnings came in extremely weak, which was a result of the dollar, which Stig and I had been talking about for a while. But the market went in the exact opposite direction. So what's important here is that we have no idea what's going to happen in the short term. We can expect certain things. We expected the dollar being extremely strong to have an enormous impact on earnings in the United States. And that happened. We saw that play out. But what we didn't see was the subsequent expectation that we had. And this was very clear that you have to understand. That's an expectation. That doesn't mean that it's going to happen. We don't know what's going to happen. But we expected multiples to

Starting point is 00:03:22 trade lower with those lower earnings calls. You didn't see that happen. What you really saw play out, and this is the way that the market reacted to the circumstances, is the dollar got weaker because the Federal Reserve made the decision to basically extend their dovishness on raising rates. And they kicked it out to November. And we now know that they're going to kick it out to December. And so that change in the Federal Reserve policy made the dollar weaker, which then changed the expectations for the coming quarter where people made the market go much higher. So that was something that I can tell you that totally would have, if I was betting on odds, I would have totally bet against that.

Starting point is 00:04:04 But that just shows you how you cannot make decisions based off of what the Fed's going to do next or any of that stuff. What you have to make decisions on is what kind of yield am I going to get based on the current market prices. And that's how Stig and I have been talking about this from day one. Okay, so whenever we look at the current market conditions and we say the Schiller PE is at a 26 or a 27, that means our expectation is that you could get a 4% return by owning stocks or equities in the U.S. market specifically. That's the thing that people need to know. And that's what you need to prepare for. And that's where we're saying we think that there's risk in the current market conditions.

Starting point is 00:04:48 that is not a big at return at all. And you have to be prepared to get that return over the next 10 years if you're buying into the stock market today. That's what we're saying. That's what we're pushing. We don't know if it's going to go up or down. And we've been saying that since day one. But you do have to realize that there is risk, enormous risk, whenever you're buying stocks and the prices are high because that means your yield is actually lowered. Yeah. So it's really interesting that you talk about yield because Jack Bogle, the founder of Vanguard, He's been now talking about a 4% yield in the years to come. And he has this need to look formula that uses.

Starting point is 00:05:24 He's saying that he starts with the present dividend yield, it's around 2% of the moment. Then he adds the expected earning growth, and he is doing that to be approximately 5%. So that would be 7% in total. And then he's looking at the current PE ratio, and he's talking about the current PE and not the shield of PE, but he's saying that's around 20 at the moment.

Starting point is 00:05:44 And he assumes they will come down to the historic average which is around 15. So he deducts 3% for what he called speculative returns. So he has this very simple equation which is 7% minus 3%. So he's just saying, well, if you invest your money in the stock market right now, you can expect 4%. And then he says, remember there's a thing called inflation. I know that we don't have that much right now, but remember we have a tax that is called inflation. Aside from that, you have to pay normal tax, of course. I think it was very interesting hearing that from Jack Bogle because he is really a gentleman that knows what he's talking about. And that's another thing that we've been saying this whole time is we're telling you other

Starting point is 00:06:26 people's opinions. So whenever Carl Icon comes out with a video and he puts it out there that he thinks the normal investor should be in cash, we tell you guys those things. We're not necessarily saying that's 100% our opinion. We're showing you other billionaires' opinions on where the market's at. And so I really want people to understand that although the market had one of the best months on record in the history of the market in October of 2015, that does not change my opinion whatsoever on the amount of risk that I think exists in the current market conditions at all. In fact, I think it makes it actually stronger to have the opinion that I had before. So I'm not changing my opinion. I'm looking at it purely from a

Starting point is 00:07:06 return standpoint. So this is something that I really want to discuss with people. So whenever I take a look at time now, which is the end of October in 2015. And what I want to do with my cash flow, because that's how you got to treat this. How am I going to invest my cash flow that exists at this point in time right now? There's two different paths you can go. I can create assets with that cash flow or I can buy assets with that cash flow. Those are really the two paths you can take. So whenever I look at, okay, is there anything out there that I can create? Can I create a new product? Can I create a new service? That's me thinking from an operational standpoint. How can I invest my money in that respect? Then the other option is what assets that somebody else created can I

Starting point is 00:07:55 buy? And what price are they charging for that? And so that's whenever you look at stocks, that's whenever you look at bonds, that's whenever you look at any other asset that somebody else created and you're asking yourself, what price are they asking me to purchase this at and what yield do I expect to receive? Okay. And so that's where my decision making occurs at any given point in time. And so as I look at that condition right now at the end of October in 2015, and I look at the stock market, I say, you know what?

Starting point is 00:08:25 I get about a 4% return. And I'm talking collectively about the S&P 500. There's other individual stocks out there that will give me a higher return than that. I mean, a perfect example of that would be the oil industry, although I talk about it on the show that I'm kind of a bear because I think in the short term it's going to go down or whatever in the long term, and that's really how you need to look at this as an investor. There are stocks out there that'll give you a higher than a 4% return, and that's really kind of in the oil industry, or in the commodities industry, that's where I think

Starting point is 00:08:54 those picks are located at. Now, what return, you'd have to really go in and do discount cash flows and things like that. But collectively, talking really big picture, you're going to get a 4% return by buying stocks at this point in time. Then I look at, okay, what am I going to get in bonds? I'm going to get about a 2% return by owning a 10-year treasury, a little higher if I go into a 30-year. So that's a lower return. And then if cash, so if I continue to hold cash, what return is that going to give me? Well, it's going to give me nothing. In fact, it's going to be impacted by inflation. but inflation is extremely low.

Starting point is 00:09:29 It's one of the lowest points that you've seen in American history. So it's not going to get eaten up all that much. So as I look at all those different options, that's where my decision making is occurring. Yeah, and Preston, I really like that you talk about having a big picture here because I think we've been running this podcast for what, Preston, just a little over a year. And things that don't necessarily change in a year when it comes to the stock market.

Starting point is 00:09:52 Again, a real big picture. We're talking like five, 10, 20 years. And we put out a podcast every week because we love talking about the stocks and the stock market. It's really important that you feel sharp at the noise. So if you, like me and like Preston, you're reading the daily newspaper and you are probably listening to other podcasts as well, you kind of got the impression that you need to do something all the time. Like, so for instance, you just heard the new earnings from Apple or you saw the new earnings report

Starting point is 00:10:19 from Google. Well, things don't change quarter to quarter. That's why Warren Buffett talks so much about if the stock market was close for five years, what would you do? And I'm going to say that if I look at the stock market now and look at it a year ago, I was here before invested a year ago in the stock market, but not much has really changed. I mean, yes, we've seen a slight change in the Dow in the S&P 500, but basically I'm of the same opinion.

Starting point is 00:10:47 And we might do another 52 episodes, and we were sitting here in the year and say, well, the yield is 4%. And I don't know what it happened to the stock model until then, but that's really what I'm looking at. I'm not looking at this from week to week because the moment I start doing that, I know a loss in the game called stock investing. Yeah, it might look like we look at it from week to week just because we run a show week to week. And we've got to kind of talk about something. And I think that that's really important for people to understand is when we're running a show and we're talking about these things, it doesn't mean that our opinions really change that much. And I have the exact same opinion as Stig, where I see.

Starting point is 00:11:23 the market today. I'm definitely much more cautious than I was a year ago just because of the way things changed. They turned off QE. That was a really big thing for me. And the multiples are pretty much at the same level as far as what I expect to get out as a yield. But I really wanted to stress this point for people so that they understand my thought process. I am constantly at any given point in time asking myself, what yield and what return am I going to get by owning asset class X and what yield am I going to get by owning asset class Y and how much risk am I willing to assume? So whenever I would say, let's look at the equity market and we think that you're going to get a 4% yield over the next 10 years, what's my downside risk in the short term, midterm

Starting point is 00:12:07 around there. I think that there's a lot of downside risk. I think that the downside risk could be 30 to 50 percent in the midterm timeframe. So those are some of the things that we're talking about. Those are some of the things that we're thinking about. And I think it's really important to highlight those. This thing could run clear up to 20,000. It could be down at 10,000 within six months. I have no idea. But I do know this. As those dynamic situations would occur, we will continue to tell you what we think the yield is based on those changes. Okay. So, So if the, let's say the market falls through the floor and it goes way down, we'll then be saying things like, yeah, I think you're going to get a 10% yield based on the current market prices. If the market goes way high, we might start saying, eh, we think you're going to get a 3% yield based on current market prices.

Starting point is 00:12:53 That's the way we're looking at it. We're looking at it from a pricing mechanism as time changes and conditions change. So that's really important for you to understand as an investor. and the patient's piece of this is just truly one of the greatest assets that a person can possess. And you look at great investors and a lot of these billionaires, they are so patient. They know the underhand pitch is coming and they're waiting for it. Let me tell you, they're not getting sucked into a sucker's rally by no shape of the imagination here. They're waiting for the underhand pitch and they're going to blast it out of the park when it comes.

Starting point is 00:13:26 So that's something else to understand as well. Let's take a quick break and hear from today's sponsors. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year bringing together activists, technologists, journalists, investors, and builders from all over the world. many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to survive currency collapse,

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Starting point is 00:17:38 Back to the show. I know that there's a lot of microinvestters out there. When I said microinvest, I'm talking about picking of your stocks and looking at the financial statements, just like Preston and I. But Preston, I, we also love to talk about. macroeconomics so we might be saying as the situation is right now China just cut interest rate for the six times since last November and you might be thinking how so what does that do to my yield and how can I interpret that and what does

Starting point is 00:18:03 mean to the dollar and all these kind of things and I think it's interesting I'd love to talk about a lot to explain what I think will happen but basically if I to have to revert to what president saying before you need to look at this big picture and talk about what is the yield and because Europe is doing something me QE or China's kind of interest rates, well, if you're holding S&P 500 in your 401K, don't think about it. It's not that important to you. It doesn't really change anything. But if you want to learn or really to understand the market mechanism, that's really what we hear for definitely not to tell you what to do or what not to do in the short term.

Starting point is 00:18:41 Yeah, I think for a lot of people, they might be surprised to hear me say that I think Warren Buffett is one of the greatest reactors of all time. He's totally reacting to the conditions that he's served. And I think when people call him the Oracle of Omaha, they send out this connotation that he's predicting things. And he's really not predicting much. He's really a great reactor to the conditions that he served as the market goes way down. He's like, okay, now I'm getting this yield and I'm reacting to the conditions that I'm served. And I'm going capitalize on that. And that's really important for people to understand that he's really being very reactive to what everyone else is doing. Okay, now they're moving into this. That drops this yield down.

Starting point is 00:19:24 That's a buy. This over here is now a bad yield. So I'm going to stay away from that. And that's really how he's looking at things. So not to drone on, but right now what we're going to do is we're going to transition into the book. So the seven habits of highly effective people. This is one of those books that if you are in college, you are in high school or you're kind of a young investor and you're wanting to maybe be a business leader someday, this, in my opinion, is one of the most vital reads that a person could ever have because this is going to give you the foundation that you need to make great decisions as an individual. This book not only applies to business, but it also just applies to just general everyday life and how to be a better person.

Starting point is 00:20:10 I can't endorse this book enough, and I know I say that about a lot of books, but this is truly one of those books that if you read, you will become a better person. And what Stick and I are going to do is we're going to go through these seven habits that he outlines in the book and just briefly discuss it. And you know what? A lot of this stuff might sound pretty obvious to people. But sometimes the most obvious stuff that you hear or you read is sometimes the hardest to put into application. and I think that's where people listening to this and people who read this book are going to have the greatest challenge is not comprehending it or getting through the book. It's going to be actually applying what they read and what they learn and intuitively know is the right thing to do. So without further delay, let's go ahead and break this down.

Starting point is 00:20:59 So the way that Kovie goes through this book is he breaks it into three different categories with seven habits amongst those three categories. So the first category that he has is titled Private Victory. And this Private Victory category has the first three habits inside of it. According to Kovie, an independent person is proactive, centered on correct principles, driven by values, and capable of organizing and executing around priorities of integrity. To achieve this, he says that we have to be proactive. And that's habit number one. He's saying that these people that are highly effective have to be proactive. by taking full responsibility for themselves

Starting point is 00:21:40 and for understanding that their behaviors and actions are the results of all their choices combined. I think it's really important that whenever you think about what does a human do all day long. And at your essence, you're a decision maker. At any given point in time, if you could hit the pause button and crack somebody's head open, you know what they'd be doing?

Starting point is 00:22:04 They'd be making a decision. They'd be making a choice. They'd be making the choice to be doing a podcast. They'd be making a choice of getting in their car and driving somewhere. And what people don't realize is at any given point in time, you're making a choice between really an infinite number of possibilities. For example, I could say, hey, Stig, I'm going to stop recording. I'm going to go out in my car.

Starting point is 00:22:28 I'm going to get in the plane and I'm going to fly to Hawaii for an impromptu vacation today. I could do that. I know that sounds totally random, but what I'm trying to express to you, is that at any given moment in time, you have an infinite possibility of choices that you can make. What a lot of people don't realize is they kind of get polarized and they think of things in binary. They often think, my choice is to do the podcast or not do the podcast. But what you really have is an infinite array of choices at your disposal. And when we're talking about this first habit, we're talking about that ability to make a decision and be proactive in the infinite array of choices that exist.

Starting point is 00:23:05 I love that you say that we're always making a decision. And I think a lot of people, especially when it comes to stock investing, have to say, well, I don't know what to do, so I'm probably not going to do anything. But guys, it's a decision. It's not a neutral decision saying, okay, I don't make any mistakes because I don't do anything. It is an active decision not to do anything. And it might be the right one. It might be the right one not to do anything.

Starting point is 00:23:31 But you're always, as Preston, saying, making a decision. He's talking about two simple concepts, and the first one he calls the circle of concern, and the second one he calls the circle of influence. And we all choose to be in either one of those two circles. The way to think about these circles are, like, what can you do about it? Do you think as an owner or do you think as an employee? And if you think like an owner as you should, you're thinking about what can I influence. Too many people think about what they can influence.

Starting point is 00:24:03 But what he's saying is that it's okay to start small. What can you influence in your own life? What is important to you? And as you start doing that, you will also experience that your circle of influence expand, and you can influence more and more things in your life, again, by being proactive. And he's bringing this very interesting example of if you want to see if you are or people around you are in one of those two circles. He's saying that, which kind of words do they choose?

Starting point is 00:24:33 Do they choose works like, I will? And let's look at the alternatives. That's really if you're in the circle of influence. Or are they saying, I don't know if this is really right what I'm doing. I try to do something that's probably going to work. That's really when you're in the circle of concern. And that's where I don't want to be. So let's go ahead and move on to the second habit, which is under this first veil of private victories.

Starting point is 00:25:01 And that second habit is begin with the end in mind. And I really like this because this is talking about where in the world is it that we're going and what's my mission and what's my goal and really kind of writing those out. So in the book he provides this example where he went to this hotel and there was people working at the hotel and the service at this hotel was just extraordinary. And he was asking certain people at the hotel, where is this at? and the person would literally come from behind the counter, walk him over there and say, sir, this is where it's at. If you need me to assist you in any other way, just let me know and just really owned the situation.

Starting point is 00:25:40 And so Kovie was so impressed by the way that this hotel ran its management and its service that he went back. He said, what makes you guys so successful? Why are you guys so service-oriented? Why are you so good at it? And the guy took him back behind where the employees were working. He said, look up at this sign right here. this is our mission statement for the hotel.

Starting point is 00:26:00 And he read the mission statement. How did you develop this mission statement? And the gentleman said, well, every employee in the hotel got together and we developed the mission statement collectively. Kovie was very impressed. And so then he started talking to the individual and he said, you know what, if you go down to even the team level, the lower management level, each one of them have their own mission statements, which they developed themselves.

Starting point is 00:26:23 And they're all nested within the larger mission statement. And what he was really getting at with this story was how important it is to begin with the end in mind by knowing what's my end state. What is it that I'm trying to achieve here? So this is really the second habit. And this is what he's talking about by writing the scripts of your lives, looking first at the outcomes, the ends that we want to achieve and then envisioning the end and how you'll help get to that point and what the means are in order to achieve it. Then he talks about the third habit, and that is called Put First Things First. And the way to think about this, according to Covy, is the difference between what is urgent and what is important.

Starting point is 00:27:03 And what he's talking about is that way too many people, they're thinking about this is urgent, this is something I need to do. But it's not something that is important, meaning it's not something that would really develop them as people. Let me just come with a really down-to-earth example here. So I am a professor and I have a ton of students. And unfortunately, I see way too many students sit and texting during classes, which is not okay in my classes, just so for all my students to know. So what I'm telling them is that this is not important. I have never, ever gotten any chat messages on Facebook, which I couldn't check an hour later.

Starting point is 00:27:41 They're completely confusing what is urgent and what is important. What Coving is saying that, you should be focusing on what is actually not urgent, but really important to you. So for me personally, that would be something like developing new products for my business. That's something that's really important to achieve my goals. Now the interesting thing is this. If I don't sit down today and develop new products from my business, nothing will change tomorrow.

Starting point is 00:28:07 And that's where a lot of people are mistaken because if nothing is changed tomorrow, what then? I should not just be sitting or texting, checking Facebook, but not. But in the long run, you'll penalize yourself but not focusing on what's important. And I think that was probably my most important takeaway from this habit, put first things first. And I say this phrase a lot on the show. What is the critical variables? And the reason I like saying that is because it really gets at this point of put first things first. And how are you trying to achieve that second habit of your end state?

Starting point is 00:28:41 and critical variables are those things that are vitally important and critical to the success and the end state of what you're trying to achieve. And I think that that's what Stig's explaining here is, let's say you're in class. Yeah, you can send a text or you can be checking your Facebook or whatever it is, but you can do that an hour later. You need to prioritize. You need to figure out what's the critical variable for me to get an A on the test? Well, if I listen to my teacher during this portion of it, my odds of getting an A on the test,

Starting point is 00:29:11 have just gone up by a much higher probability. So find those critical variables. Find those things that are going to help you achieve your end state. And those are your means in order to successfully lead to the ends that you want to achieve. So that was really the first of three categories is those first three habits that we just discussed. The next category that we have here is titled Public Victories, and this encompasses Habits 4, 5, and 6. So the first habit within this public victory category is think win-win. Totally agree with this habit.

Starting point is 00:29:46 I'm sure if you've listened to any number of our podcasts, you're going to know that Stig and I have a very strong opinion of what a win-win is. And it really comes back to our firm importance on the idea of reciprocity and the law of reciprocity. But I'm going to throw this over to Stig to have him explain some of this. I think the most important takeaway is that if some of the first thing, something is not a win-win. You should not even start building a relationship with that person. And I think way too many people think in terms of if I win, then someone else has to lose.

Starting point is 00:30:19 And Covey actually brings this horrible example from a good friend that he had who actually sold his $8,000 car for $50 because he was getting divorced. And that way, he only had to hand out $25 to his soon-to-be ex-wife. Simply because it was not about winning, it was about for her to lose. He didn't mind losing himself. He just wanted another person to lose. The minute you start to think in terms of win, lose, whether or not you're conscious about it or not, you bring your ego into it. And that's not how to be effective. You have to remove your ego and think about how is this good for both of us. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up. And customers now

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Starting point is 00:34:20 So that was a habit for. The next one under this public victory category is habit number five, which is seek first to understand, then be understand. When you talk about this, this is so important because what he's really saying here is, I need to understand the other person I'm interacting with way before I need to understand my own position. And this for a lot of people is the exact opposite of how they operate. I mean literally the exact opposite. Most people are, well, this is my interest. This is what I want.

Starting point is 00:34:53 And they don't even, for a second, consider the other person's vantage point, let alone put the other person's vantage point first. And that's what he's getting at here. He's saying when you're having an interaction, you're having an exchange with another person, it is so important to say, what is it that they want? What vantage point are they looking at this situation from? And let me not just understand it, but let me internalize it. Let me try to place myself in that situation. And what this really comes down to is a word called empathy. I think empathy is one of the most important things for a person to possess to become.

Starting point is 00:35:30 intelligent. I think empathy and knowledge and intelligence are so closely aligned that I almost use the words interchangeably because it's that important. I am definitely not the best person at this, but I can tell you that I know that it's vitally important to be empathetic and to try to understand the other person's advantage. How much of any little bit of success that I've had has been a direct result of being empathetic and trying to understand the other person's position, because you can maneuver in a completely different way, and you can understand and capitalize on experiences because you understand the other person's vantage point. I know in writing, you know, we've written a couple books. So in writing, one of the first things they tell you is know your audience. And that's

Starting point is 00:36:14 really what this is, is when you're going to write something, so many people write for their own ego or write for themselves, and they don't even consider, who's my audience? Who's reading this? What's their vantage point? And when you do that and you cater to that, you'll be amazed at how, successful and how highly effective you'll become. Yeah. When you listen to someone, do you agree or do you disagree? Is that your first thought? And then the second thought is that do you think about what to reply? And I was thinking, yes and yes. And obviously, you're saying, there is no such thing as the world. Like there is Stakes world and there is Preston's world. There is no like one objective truth. Before you can even start to connect with another person, you have to understand

Starting point is 00:37:01 their view of the world first. And I'm definitely guilty as charged when he's talked about all the mistakes we're making when we're communicating with other people. He's saying there are so many forces in communication couldn't come up with a course in listening. And that was basically what he was talking about with this habit. I'll tell you, doing this podcast is probably one of the best examples that I've been able to noticeably see myself of not trying to understand the other person's opinion first because sometimes we record the podcast, we go back and we edit it. And whenever I'm listening to myself and there's times when I'm like interrupting people and they're making a fantastic point and I'm thinking about things only from Preston's vantage point

Starting point is 00:37:42 of what my next question was going to be or whatever. And I get so mad at myself whenever I would hear that in the editing process or just going back and listening to the tape, especially when somebody has like such an amazing point. And I'm like throwing something totally in a different direction. It's like, why did you do that? Let them talk. And that's exactly what we're getting at this. You really need to understand the other person first.

Starting point is 00:38:04 Let them talk. Stop trying to come up with your counterpoint or your changing opinion. And now in the future, when people hear me do that, they're going to be like, Preston's not obeying habit number five. He's just thinking about himself. All right. So habit number six. This is the last habit under the public victory category, and this is called synergize.

Starting point is 00:38:25 So the sick habit synergize, that's all about how to value the differences you have with other people. Now, COVID talks about the importance of not thinking, I need to find people not exactly like me, because you can't develop if you don't meet people that have difference of an opinion. Now, that doesn't mean that you have to be very, very different. It means that you need to have the same first three habits. He is saying that if you are looking at people that as you are proactive, if they put first things first, and if they begin with the end mind, if you have those three habits locked down,

Starting point is 00:39:01 it really doesn't matter how different you think about the world. That will only help you in terms of your personal growth. And he talks about how synergy can really make things happen that you couldn't do by yourself. I mean, I think we all know this, very simple example when one and one is three, that's really the concept he's talking about here. And I think just real fast, I think that one of the important things about synergy is just having great communication skills. People that have the ability to listen, people that have the ability

Starting point is 00:39:32 to communicate effectively, really have this ability to synergize their teams and create this flow of information amongst people. People that lack that communication skills and maybe create an environment of fear around them. They just really have a hard time creating that environment with Habit 6. So let's move on to the last one. This is the final habit. And this is in its own category, which is the renewal category. And the title of it is sharpen the saw.

Starting point is 00:39:59 And what he's getting at with this is becoming more effective as a long-term process. And it requires an ongoing commitment to renew yourselves, your body, your heart, your mind, your spirit, all those things in order to, actually put all this stuff into practice and to do it effectively and to do it in a way that compounds and grows upon itself as time matures. And that's the hard part. That's really the hard part because here you are reading this book and you're saying, you know what, I agree with all that stuff.

Starting point is 00:40:31 I agree with all those habits. That's fantastic information. And then three months from now, it kind of goes by the wayside and you kind of forget about it. And so I think that's what he's getting at with habit number seven, and sharpen the saw is get the tool out, sharpen it up, re-read the, and that's one of the reasons you guys need to sign up for our list is because you can get this executive summary. You can reference this.

Starting point is 00:40:55 It's a couple-page document. You can go back and you can reference this in a quick manner that reinforces these ideas and you can remember it. And it's something that you could do quarterly or whatever you would think would be lead to your most effectiveness and referencing this and sharpening your saw, so to speak. It's the most important one because it's the foundation for really maintaining the six other habits. Really nothing more important that for you to still compound your knowledge. And I'm going to say that I'm reading a book a week.

Starting point is 00:41:27 I hear especially for some of those, let's call them personal development, personal growth books. A lot of the principles are real the same. But even though I read perhaps two of them a month, I still benefit from them because I find myself not applying what I've just learned. and I find myself forgetting what I just heard. Shopping is always really to develop yourself and to do something you don't use to do, to come out of your comfort zone. Yeah, because it's the one that leads to the long-term success.

Starting point is 00:41:54 And when you read this, you have short-term successes because you buy into it, but how do you put measures in place that effectively guide you to keep going down this path of effectiveness? If I was going to provide an example, so I have a son, he's three years old, and we go on walks all the time where we walk up the street and there's a gentleman that lives, you know, a couple houses down.

Starting point is 00:42:16 He has these trains outside and my son loves it. I mean, absolutely loves to go on these walks to go over to Mr. Jim's house and see the trains. I'll come home and my son will be like, Mr. Jim's, Mr. Jim's. And so when we're walking up to Mr. Jim's, it's, you know, it's probably a half a mile away. And on that walk, my son just wants to keep diverting and going off the path, literally off the and just gets diverted and gets confused and goes over there, it goes over here. I look at that as such a symbolic reference to knowledge, creating habits for yourself that you actually want to retain,

Starting point is 00:42:55 and you have that parent that's guiding that individual saying, no, you need to stay on the sidewalk. We're going to walk down here. Remember you wanted to go see Mr. Jim. You don't want to go chase after the rabbit, you know, those kind of things. I know in my own personal life reading and studying and studying. doing these two books a month is really that parental guidance for me to try to stay on that path and to try to guide me and not get to distract it.

Starting point is 00:43:24 And so that's really important. It's almost like a lifeline for me personally to continue to develop my education and to read self-help books, not because I'm getting necessarily new information. It's reinforcing and creating those habits so that it gets to a point where it's just automatic. So really my final point here to end of this book is when COVID talks about developing the habits. He's saying that the Chinese bamboo tree doesn't show anything the first four years. And I think that's how you need to think about habits. You might not see short-term results, but in the long run, you will see the most beautiful development you can ever think of.

Starting point is 00:44:04 Wow, I know that sounded really non-stick like to say something like that, but I don't know. It's such a really beautiful quote. I actually got a tear in my eye. No, it's fantastic quote, Stig. I agree with you 100%. I really enjoyed doing this episode. I think that this is really important stuff. And I think that it's something that is going to ultimately lead to just

Starting point is 00:44:29 enormous success for people. If they actually put this stuff into application, and that's the hard part. And you're not going to see results tomorrow. It is going to take years of successful implementation of these. ideas to really kind of turn the corner and go in that direction of really excellence and really being effective as an individual. So highly recommend the book. The name of the book is the seven habits of highly effective people. You can see why it's like one of the number one sellers for

Starting point is 00:44:55 self-help books in the entire world. Sign up on our list. We're going to send out our executive summary of this for free and we'll send out our executive summaries. We don't send any spam. We really appreciate our audience. Stig sent me a message today that said that something like our podcast was in the top 15 worldwide for business podcasts. I am so humbled by that. I can't even begin to describe how humbled I am by our audience and putting us in that position because, man, that's just crazy. I can't even describe how good that makes me feel about what we're putting out there. We really want this show to be all about you. We want to be talking about the things that you want. So make sure that you guys continue the emails. I know it's getting a

Starting point is 00:45:39 lot harder for me to respond to every email that we get. We're trying, and I apologize, if you've sent me a message or stig a message and we have not responded to you, I seriously send my deepest apology that I have not gotten to your email. The harder ones for me to respond to are the ones where people send me a stock ticker and say, Preston, what do you think about this stock ticker? Those are very difficult for me to respond to because I get so many of those. But that's why we have our forum, and that's why we have so many smart people on our phone. forum, the Warren Buffettforum.com in order to discuss those finer questions of individual stock. Please push your questions there if it's something like that.

Starting point is 00:46:17 But truly, thank you, everybody, for putting us in that position to have such a strong performance on our podcast. It really means the world to us. So thank you, everyone, and we'll see you guys next week. Thanks for listening to The Investors Podcast. To listen to more shows or access to the tools discussed on the show, be sure to visit www. Submit your questions or request a guest appearance to the Investors podcast by going to www. www.com. If your question is answered during the show, you will receive a free autographed copy of the Warren Buffett Accounting Book.

Starting point is 00:46:52 This podcast is for entertainment purposes only. This material is copyrighted by the TIP Network and must have written approval before a commercial application.

We Study Billionaires - The Investor’s Podcast Network - TIP 059 : The 7 Habits of Highly Effective People (Business Podcast)

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