How to Use Expected Value to Save Time and Money

Make Everyday Decisions with the Mind of a Poker Pro

Poker legend Doyle Brunson is rumored to have been asked whether he would take the following bet. A coin is flipped. If it comes up heads, Doyle loses his entire net worth. Tails, he wins 10 times his net worth. Doyle responded, “I’d have to take that bet.”

Man flipping coin, representing Doyle Brunson's expected value decision

He’d “have to” take that bet because of a concept called expected value. Even if some of us wouldn’t take that particular bet, the concept of expected value can help us make better decisions in many areas of life, especially those involving time and money.

In this post, I’ll define expected value and show how you can use it to save time and money. (more…)

How to Live the 80/20 Rule for What Matters Most

Why the 80/20 Rule is a Key Principle for Having More Time and Money

The 80/20 rule states that 80% of effects are determined by 20% of their causes. The rule is also known as the Pareto Principle, after the 19th Century Italian economist, Vilfredo Pareto. Pareto noticed that 80% of the peas in his garden came from 20% of the peapods. (Weird thing to notice.) He also showed that about 80% of the land in Italy was owned by 20% of the population.

Man contemplating how he can use the 80/20 rule to achieve 80% of the result with 20% of the input

The Pareto Principle is not a law, like gravity. It’s a rule of thumb. It fits a wide array of phenomena. Consider, for instance, these applications of the rule across a variety of fields: (more…)

Why Procrastination Increases Efficiency

And How You Can Achieve Greater Efficiency and Other Benefits Besides without Procrastinating

Have you ever been up against a deadline and found yourself accomplishing more than seems humanly possible? Final exams used to spark that feeling for me as a student. Now, my biggest work projects do. I also recall getting a million things done in the days leading up to my wedding.

Lots of pressure can be stressful. But for many of us, it is also energizing. Our focus skyrockets. We become super-efficient. We feel intensely alive.

Do you ever wish that you could live “in the zone” more often? After all, final exams, big work projects, and weddings don’t come around every day.

I’d like to discuss three approaches to being super-efficient more often. One I argue against, and two I argue for. (more…)

Maximize Time and Money with the Minimum Effective Dose

Why to Aim for the Smallest Dose that will Produce the Desired Outcome

Unlike my last two posts on how to save 46% on a hotel booking and how to save 40 hours per year by having your smartphone read to you, this post is a bit more abstract. That said, the principal I discuss here has much wider application. It will save you even more money and time than the previous two posts if properly understood and applied. This post is about the minimum effective dose.

Entrepreneur and author Tim Ferriss popularized the term in his book The 4-Hour Body. There, he defines the minimum effective dose simply as “the smallest dose that will produce a desired outcome.” (more…)