38 Weeks to Get Rich
What follows is my summary & key takeaways to help you digest the 127 page document.
Week 26: Judgment Is the Decisive Skill
Everything we’ve discussed so far has been setting you up to apply judgment.
In an age of infinite leverage, judgement becomes the most important skill.
We discussed how to get leverage is previous weeks. Either with permission (capital and loans, or labor and employees) or permissionless (writing code or content). But once you have leverage, then you want to slow down a bit because judgement really matters.
Leverage is a force multiplier for your judgement.
Without leverage, your decisions don’t make a huge impact. It’s okay to take risks, the downside is minimal. But if you have a lot of leverage, those downsides become much larger. If you have good judgement, leverage becomes a very great tool. But to those with bad judgement leverage can be detrimental.
Judgement is knowing the long-term consequences of your actions.
Wisdom and judgement are very similar in that regard. They both involve understanding outcomes and consequences. Judgement is hard to build up because it’s built at the intersection of intellect and experience.
Intellect without experience will give you a false-confidence in a world which experience teaches us that things rarely go according to the prevailing theory.
The real world is always far, far more complex than we can intellectualize.
So judgement becomes a throwback to week 13 (Specific Knowledge), it’s something that can’t easily be taught because you need the experience side of it to balance the intellect. Judgement is one of the greatest specific knowledges you can have.
The people with the best judgement are among the least emotional.
Emotions often cloud our judgment. If we can learn to set aside some of the emotional responses to the problems we’re solving, we can often find a better solution.
Judgement can be accelerated through short iterations.
The person who tries one thing in 10 years will have that one experience. But the person who tries 1,000 things in 10 years will have those 1,000 experiences. It is virtually guaranteed that the second person will have significantly more failures than the first; but they’ll also have earned better judgement in the process.
Go forward and try. Keep a clear head and a focused mind. Take risks with large upsides, and begin building things that will compound (relationships, capital, experience, intelligence, etc.)
Next week we’ll discuss when you should do a task and when you should outsource it.