Taken from a page of Ray’s book Zen of Zinn 3, in this Tough Things First podcast, Ray Zinn discusses how honest assessment is the difference between gambling and investing.
Rob Artigo: Ray, let’s turn to page 89 of Zen of Zinn 3, your book in the series of three books. Page 89, and this is what it said, very short writing, “Gamblers are not investors. To gamble is to take a chance on a random event. Don’t gamble on your future. Have a strategy that eliminates or at least reduces the chance for failure.” Tell us a little bit about that.
Ray Zinn: Yeah. Okay. So I was trying to differentiate between a gambler and an investor. So a gambler is one that’s investing in a random event, which not necessarily has high degree of probability of success, because gambling, again, is based on a random, very low probability of success.
So when you talk about investing in something, whether it be education, whether it be a marriage, whether it be your business or a job, make sure you study it out, make sure you understand the pros and cons. You should have as many cons as you do pros. List them out on a piece of paper, write down all the cons.
What most people do is they have two or three times as many pros to a decision as they do a con. And what I do is I know there’s opposition or there are cons to every event, whether it be a marriage or starting a company or where you’re going to live, the job you’re going to take. List down all the cons, because I don’t have to tell you to list all the pros because you’ll do that automatically. But make sure when you make your list that you have as many cons as you do pros as to why you should not enter into that venture. That way you can better establish a higher probability of a good outcome if you do that.
And I know it sounds silly because if you have equal number of cons you do pros, you say, “Well, I might as well just flip a coin.” No, that’s not what you’re doing. You want to look at all the downside. In other words, look at all the things that can go wrong. And then it’s Murphy’s law is what can go wrong will go wrong. That’s Murphy’s law. And all the downsides, all the reasons why something will not succeed, if you do that, you have a better chance of making a good decision. So again, equal number of cons as you do pros.
Rob Artigo: Well, a lot of gamblers would say that, “Oh, I have a strategy for this.” They’re in a casino. “I have a strategy for playing this game. This is my strategy.” And they use a lot of the lingo, but they’re really just gambling.
And I think recently of this big story about these millionaires and some former NBA player and an actual player right now getting ensnared in this gambling scheme. And I’m not going to say that they’re guilty or whatever, that’ll be dealt with in other ways. But to see, and this has happened before where you have people who really have money to invest, and money to even pay somebody to help them with a strategy, take enormous chances with the money that they have and ended up losing a lot.
Ray Zinn: Well, Ponzi schemes, it was a classic example of that. But the purpose of this podcast is to reinforce the need for having, sitting down, write down the pros, the reasons you want to do it, and then the cons, the reasons you shouldn’t do it, and they should be equal.
As we know in life, there’s ups and downs, and so you want to make sure that your ups are countered with as many downs so that you can make the proper decisions and prepare for these probabilities of a poor outcome or a bad outcome.
That’s when I ran my company, I was always looking at also the downside. In other words, what’s the downside to working with this customer or this product? And part of the approval process for developing a product was my engineers had to list and the marketing people had to list all the reasons why we shouldn’t do it. And therefore, I know that they’re looking at all the downside.
Unfortunately, we always look at, they say optimism, you want to be optimistic. Optimistic is okay because it also relates to you want to see what all the reasons why something won’t work, and that’s also being optimistic. In other words, or realistic maybe is a better term. You want to be realistic as you proceed down a particular path.
Rob Artigo: Well, it’s a great reading. Zen of Zinn series is a lot of writings like this, and some of them are a little longer, some of them are a little shorter. There’s always great wisdom in here.
And I guess maybe we’d take a minute as we get ready to close this out to just talk about why you felt… This is something that has grown over a lot of time, and I remember you telling me once that your wife would say to you, once say, “I don’t know how you come up with this stuff, it’s so many things, so many ideas in your mind.” But tell us a little bit about why these writings are put together the way they are.
Ray Zinn: Well, again, the purpose of the Zen is Zinn is to give people some ideas, some thoughts that they can think about that’ll keep them really on the straight and narrow, as I call it. If they get a chance to read these, I guarantee you that if you follow these passages that I’ve written in these three books so far, actually we got a fourth one coming up called the Bedside Zen of Zinn, but if they read those and they follow through with them, I guarantee you, you won’t go wrong.
Rob Artigo: That forthcoming book is all set. We’ve got the cover ready to go and it looks like we should be able to get that out pretty soon. And I hope people will take that and really run with it, because that’s a 365 kind of thing, that’s one daily reading and it gives you something to power your day and grow with, so it’s going to be a fun book.
Ray Zinn: I agree.
Rob Artigo: Thanks, Ray. I’d like the listeners to join the conversation at toughthingsfirst.com. Your questions and comments are always welcome.
Follow Ray Zinn on Twitter, Facebook, and LinkedIn. And of course, pick up Ray’s books, Tough Things First, and the Zen of Zinn series 1, 2, and 3, which we were just talking about. And on sale now, The Essential Leader: 10 Skills, Attributes, and Fundamentals That Make Up the Essential Leader, an Amazon top seller. Thanks, Ray.
Ray Zinn: Thanks, Rob.
