High Profit Thinking Part 2: CONTRIBUTION

“Manifesting Money” doesn’t work. Why not? Because commerce isn’t a letter to Santa Claus. If you want to make serious cash, you need to make a serious contribution. High profit thinking is the skill that helps you get this done, because it involves solving real problems. When you do this, you make real money.

WHAT YOU’LL LEARN FROM THIS EPISODE:

  • Why high profit thinking is like lemon oil
  • What high profit thinking smells like
  • Why Ryan Gosling is a high profit thinker to watch!
  • Why “manifesting money” is nonsense
  • A key difference between “manifesting money” (which doesn’t work) and profit thinking (which totally does) 
  • Why legitimate and powerful money-making activities attract shady folks who only want to make money
  • Why The Secret’s  process of “ask, believe, receive” doesn’t work in business
  • What actually does work

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TRANSCRIPT:

Welcome to Episode 33 of How to Make More Money, a podcast that helps you get seriously good at the game of making serious money. I’m your host Kelly Hollingsworth, and I’m so happy you’re here, because today we’re continuing our discussion about high profit thinking. Last time we spoke about a key element of high profit thinking: Logic.

Why is logic the first skill we started with? Because it’s the jumping off point to getting real about risk. When you bring your brain to the game and play logically, you separate the real risks from the imaginary risks. When you remove imaginary risk from your business, you very naturally feel safer, because what everyone else is afraid of, you can see isn’t actually scary at all. And when you do see this, you feel safer. And then the low-profit, protective behaviors that we discussed in Episode 31 just fall away. This is good not just for you–because you feel better–but also for your business and your bank balance, because these protective behaviors do not create cash. They repel cash, and when you use your brain logically to feel safer, it’s easier to drop these protective behaviors and start winning in your business.

I discussed an example of this last time, with a pit bull named Buster. He and his human were seeking a house to rent, and we wanted to rent them a house but everyone said, “No. Too risky. If he bites someone, you’re liable.” But I used logic to determine that this cash-sucking conventional wisdom was untrue, and then we were able to rent to Buster and his human and make extra money without additional risk of covering damages if a friendly pit bull did happen to bite someone. This logical thinking increased our revenue from rent, and Buster and his human got a nice place to live. Everybody won.

This is using your brain for fun and profit, but the amusement and the money are only just beginning. What’s even more fun, and far more profitable, than thinking logically to dissolve imaginary risks, is adding in additional elements of high profit thinking to also dissolve real risks. And here, I’m not suggesting that you leave logic in the dust. You need it with you, always.

So here’s something to notice about high profit thinking. You can use elements of high profit thinking in isolation. Logic, for example, is powerful on its own, as we discussed last time. But what’s even more powerful is stacking the elements of high profit thinking together, and using them all in combination with each other. When you stack the elements together, they are so much more powerful than the sum of their parts, and this helps you become exponentially more powerful in business and in life. This sort of reminds me of a magnet I have on my fridge that says Good Clothes Open all Doors. (Or at least I had that magnet on my fridge before we listed our house for sale.) But wherever the magnet is, the concept still applies. Think of the different elements of high profit thinking as a wardrobe. Logic is like a nice coat. Definitely useful. But a coat can’t serve every occasion. Having the whole wardrobe–an entire closet of high profit thinking elements that will take you through any occasion with ease and aplomb–is what you’re going for. If you really want to make a mark and make serious money, this is what you need.

So today we begin adding to the arsenal. Logic is the first element, and it generally takes care of imaginary risks. When the imaginary risks are gone, what’s left? The real risks, but the good news is that you can dissolve real risks when you are a high profit thinker. High profit thinking is the universal solvent that scrubs risk from your business. Imaginary risk. Real risk. High profit thinking takes care of it. It’s a little like lemon oil. Did you know that lemon oil is Nature’s Goo Gone? A high school friend of mine is pretty high up in doTerra, and she alerted me to this fact. So I bought some lemon oil, and now whenever I’m out at our fire pit and I get pitch on my hands, I grab my lemon oil that she sent me, and it takes it right off. And it’s not toxic. I love it. And this is exactly how high profit thinking works in your business. It’s like lemon oil. It dissolves the risk from your business with ease and it feels organic. Not toxic or harsh or scary. And it smells good.

Now, you may be asking yourself, what exactly does high profit thinking smell like? Did you see the movie THE BIG SHORT? If you haven’t, run, don’t walk, to see that movie. Ryan Gosling plays a high-powered salesman on Wall Street who’s alerting a handful of hedge funds to the fact that they can, and should, short the housing market before the great real estate crash of 2008. He and a few other hedge funds saw the real estate bubble bursting when no one else did, and he’s selling a swap—a financial instrument that allows people who see things no one else does to make money from when they happen.  There’s a scene in that movie where he’s presenting the idea for the trade to a hedge fund. They’re all sitting in a conference room, waiting for the pitch, and Gosling opens with, “Do you smell that? What’s that smell?” One of the men who works for the hedge fund says, “Cologne?” Then Ryan Gosling’s beleaguered and somewhat clueless assistant squints his eyes and says, “Opportunity.” He says it like “I am so the man right now.” And Gosling looks at his assistant in disgust and says, “No. Money. I smell money.”

It’s a great scene. I’m linking it in the show notes if you want to watch this clip, but the better thing to do is watch the entire movie. Why? Because it’s a textbook example of high profit thinkers and how they operate, and the low profit thinkers who attempt to thwart their entire process. Happens all the time, but in any case, that scene from the movie The Big Short describes exactly what high profit thinking smells like. It smells like money.

So now that we know what it smells like, let’s talk about making more of it. Making serious money means getting on the field and playing a bigger game, and this necessarily involves dropping the protective behaviors that keep you on the sidelines or render you ineffective on the field. We bring these protective behaviors that we’ve picked up in life into business because business feels risky, it feels scary, and what’s the first thing you do when you feel afraid? You reach for some protection. And you don’t let go of it until the danger has passed. In business, the inability to let go of protective behaviors because of perceived or actual risks that could be, but haven’t yet been, eliminated or mitigated, is the problem that costs you more money than anything else. And a primary way we solve this problem is through high profit thinking.

High profit thinking is about many things, but it’s largely about dialing down risk. It’s about showing your brain that there is no actual danger and it’s safe to proceed. We talked about that last time. And it’s about using your brain to mitigate or eliminate real risks. That’s what we’re talking today and going forward in this series of episodes on high profit thinking.

To use your brain in this way, it’s critically important to understand exactly what high profit thinking is and how it works, and the easiest way to understand what it is to understand what it isn’t.

Why is this comparison against “what it isn’t” helpful? Well, for one thing, comparison is a great way to dig deep into, and really solidify your understanding of, anything. When you can take two seemingly similar things and discern or recognize the differences between them, you are on your way to true mastery. For example, my brother-in-law used to think my sisters and I were a lot alike. Now that he knows us better, he says how different we are. This reveals that when you know something well, you see the differences, not the similarities. My brother-in-law recognized our differences over time and not intentionally, but a great way to get to know something well is to start out by looking for the differences and to do so intentionally.

This is how law school is taught, by the way. If you’ve never been to law school, you’ve never experienced the true joy of what’s called “distinguishing” cases. When you’re distinguishing a case, you look at the differences between two similar cases that have very different outcomes, and you use your brain to figure out why the similar cases had such different outcomes. Discerning the differences is the process of distinguishing two seemingly similar cases from each other, and when you can recognize the differences, you are acquiring an understanding about the law that goes far beyond what laypeople know. The recognition of these differences means you’re on your way to developing a useful understanding that is the basis of skill that makes you a lot of money.

So that’s one reason that understanding the distinction between what high profit thinking is, and what it isn’t, is very helpful. Comparison as a means of learning something well is a quicker path than just learning one thing in isolation. It’s so much better to compare it against something else.

But there’s a second reason. When we’re talking about using your mind to make money, there’s so much advice out there that is counterproductive–that can actually hurt you by increasing the risk in your business. I don’t want that to happen to you, so the other reason we’re going to compare high profit thinking to and against other advice or conventional wisdom about using your mind to make money is that there’s a lot of misinformation flying around out there. In conventional wisdom, the concept of using your mind to make money is typically called “manifesting money,” and for the most part, the ideas behind “manifesting money” are utter nonsense. They won’t help you, and they can actually hurt you.

In our discussions of high profit thinking, I won’t just talk about high profit thinking in isolation. I want to flag these harmful ideas for you today and in our upcoming episodes, so you can gain a better understanding of high profit thinking, and you can begin to see the differences between high profit thinking and nonsense ideas like “manifesting money” that will increase the risk in your business and cost you a fortune. You’ll see much more about this as we proceed through these episodes, but for now, please know that making the comparison between “manifesting money” and high profit thinking won’t just help put you on the road to mastery. It also will help you avoid problems that can cost you a fortune.

So now let’s dive in. The first major difference between high profit thinking and “manifesting money” is that for the most part, when people are talking about “manifesting money,” they are giving you advice that is diametrically opposed to you making money in your business.

Here’s why. Did you ever read that book called The Secret by Rhonda Byrne? If you are not familiar with this book, the seed of it was a feature-length film, also called The Secret, that was released in 2006. Shortly after the release of the film Rhonda Byrne followed up with the book of the same name, and I just saw that now there’s also a new release called “The Greatest Secret.”

I have not yet read this new offering, and I will not have time to read it before this episode is published, but at some point, I will take a look at it and let you know if there’s anything new or interesting in there. For now, what I’d like to do is dive into what The Secret says, and how it can lead you astray, vs. how the world actually works and what’s necessary to be successful.

I chose The Secret as the jumping off point for contrasting “manifesting money” with high profit thinking, because it is perhaps this century’s best-known book on manifesting money and using your mind to attract whatever it is that you want into your life. The recipe that The Secret offers to you is “ask, believe, receive.” When you do this, the universe will deliver up whatever it is that you’re requesting.

The book opens with the basic idea that everyone can have everything they want, if they just know the Secret and they know how to apply it. The book suggests that previously, The Secret has been kept a secret by a few people in power, but now The Secret is going to be shared with everyone so that we can all have everything we want. So what exactly is “the secret?” It is, in no uncertain terms, “the law of attraction. Everything that’s coming into your life you are attracting into your life. And it’s attracted to you by virtue of the images you are holding in your mind. It’s what you’re thinking. Whatever is going on in your mind you are attracting to you. Every thought of yours is a thing — a real force.” That’s the end of the quote.

As for this emphatic suggestion that every though is a thing, we’ve heard this before, from Napoleon Hill, when he wrote, “Truly, thoughts are things.” That’s a famous quote from that book that I mentioned back in episode one. None of this is new. Napoleon Hill was talking about this in his famous book Think and Grow Rich, about 100 years before this latest book, The Secret, was published. So “the secret” isn’t really a secret, but in any case, the way the secret is described in this book is basically something the most successful people have known since the dawn of time. And the book says, that they’ve known it, but they kept it close to the vest, so they could have everything they wanted but few other people could, and now we are bringing the truth to use so that the riches of the universe will be available to you as well.

Interestingly, in this book, Rhonda Byrne never really comes out and says she is the recipient of the world’s riches because she knows The Secret. Instead, what happens in the book is that she quotes other wealthy, powerful people at length, and she talks about how The Secret has changed their lives. Bob Proctor, a best-selling author, self-styled philosopher and self-help guru, is quoted repeatedly throughout the book, and his quotes, and the quotes of others, are designed to lend credence to the idea that the wealthiest people in the world are the wealthiest people in the world because they know The Secret. For example, Bob Proctor is quoted as saying, “Why do you think that 1 percent of the population earns around 96 percent of all the money that’s being earned? Do you think that’s an accident? It’s designed that way. They understand something. They understand The Secret, and now you are being introduced to The Secret.” That’s the end of Proctor’s quote.

So we’re assured, in this book, two things about The Secret. One, it basically involves treating the universe like a giant letter to Santa Claus. “I want this, I want that, and I want something else,” and then believing that the universe is going to deliver, and receiving it when the universe does deliver.

The Secret is implemented through a process of “Ask, Believe, Receive.” The “Ask” piece involves considering yourself as Aladdin, with unlimited number of wishes, and treating the universe as the Genie, whose wish is your command. Here’s a quote, “Remember Aladdin is the one who always asks for what he wants. Then you’ve got the Universe at large, which is the Genie.”

Interestingly, a little further down on the same page, we’re told that “the Genie is the law of attraction.” So this is a little confusing. Is the Genie the universe, or the law of attraction? Whatever. It doesn’t matter. The point is that all you have to do is ask and believe, and you shall receive.

So exactly how do you do this? According to the book, you sit down and write a letter, in the present tense. I’m so grateful and happy that I now have ______________.” Fill it in. Be specific. The universe is Santa Claus, and you’re writing your Christmas wish list. You can have anything you want—just ask for it.

And then, make sure you only ask once. This is part of believing. If you believe you have ordered from a giant cosmic catalog, and what you’ve ordered is coming, would you ask again? No. Here’s what the book has to say on this: “When you book a vacation, order a brand new car, or buy a house, you know those things are yours. You wouldn’t go and book another vacation for the same time, or purchase another car or house. If you won a lottery or received a large inheritance, even before you physically had the money, you know it is yours. That is the feeling of believing it is yours. That is the feeling of believing you have it already. That is the feeling of believing you have received. Claim the things you want by feeling and believing they are yours. When you do that, the law of attraction will powerfully move all circumstances, people, and events for you to receive.”

Now, you may be asking yourself, how the heck do you do this? And fortunately, the book answers this question for us. You start by, “make-believing. Be like a child, and make-believe. Act as if you have it already… Have faith. Your belief that you have it, that undying faith, is your greatest power. When you believe you are receiving, get ready, and watch the magic begin.”

What is the magic? Evidently, the universe is going to rearrange itself to make your wish happen for you.

So that’s, “ask and believe.” What’s left? Receive. Here, your job is to feel good. Imagine yourself feeling good, as good as you would if you were receiving the thing that you’re wishing for right now. And when you feel that good is when the universe will reward it to you, because you are in vibrational alignment.

Here’s a quote in the book from Michael Bernard Beckwith. Here’s what he has to say about the receive part of this process: “A dear friend of mine, Marcy, is one of the greatest manifestors I have seen, and she feels everything. She feels what it would feel like to have what she is asking for. She feels everything into existence. She doesn’t get caught up in how, when, or where, she just feels it and it then manifests.”

Okay terrific. That’s the basic process. So now I’ll ask you, how do you feel? If the whole thing feels a little hokey, you are not alone. I think it feels that way to the writer of this book as well, and the reason I think that is because she is bringing in the argument of, the, “greatest people in the world know how this works,” argument. That’s a key feature in the book. “The greatest people in the world know that this works” argument is what people say when they don’t really have any proof that it works. And generally the only reason people raise that argument that all of the best people in the world know that it works is because that’s the best proof that you have.

Here’s how the book opens. “In 2004, my life had collapsed around me. I’d worked myself into exhaustion, my father died suddenly, and my relationships with my work colleagues and loved ones were in turmoil. Little did I know at the time, out of my greatest despair was to come the greatest gift. I’d been given a glimpse of a Great Secret—The Secret to life. The glimpse came in a hundred-year-old book, given to me by my daughter Hayley. I began tracing The Secret back through history. I couldn’t believe all the people who knew this. They were the greatest people in history: Plato, Shakespeare, Newton, Hugo, Beethoven, Lincoln, Emerson, Edison, Einstein”

This brings me to the second thing we’re assured about in The Secret. I already told you the first thing. The first is that it will bring the riches of the universe our way. The second thing we’re told is by implication. When she writes of “all the people who knew about this… The greatest people in history,” what is she doing? The implication is that The Secret is how these folks–Plato, Shakespeare, Newton, Hugo, Beethoven, Lincoln, Emerson, Edison, Einstein—The Secret is how these folks got where they are.

This is quite a list, isn’t it? Some very well-known humans in this list. So well-known, in fact, that it will be very easy to look at their lives and figure out, is the process of, “ask, believe, receive,” what these folks were doing when they became some of the most successful humans on the planet? When the riches of the universe were bestowed upon them, were they asking, believing and receiving? Or were they doing something else?

Let’s take a look at each of these folks and see how they made their money. Did they sit around, “asking, believing and receiving?” What were they up to?

Upon the most cursory of inspections, it looks like they were up to something other than, “asking, believing, and receiving.”

First off, let’s consider our friend Plato. Plato is “widely considered as one of the most important and influential individuals in human history.” The student of Socrates and the teacher of Aristotle, he is considered the founder of Western philosophy. He also is one of the most prolific and successful writers since the dawn of the human race. Wikipedia reports that, “[u]like the work of nearly all of his contemporaries, Plato’s entire body of work is believed to have survived intact for over 2,400 years. Although their popularity has fluctuated over the years, Plato’s works have never been without readers since the time they were written.”

So Plato wasn’t sitting around, “asking, believing, and receiving.” He was doing something else. He was thinking and writing.

Then there’s the second historical figure who theoretically was a proponent of “asking, believing, and receiving,”  Our friend from across the pond, . What was he up to? He may have been “asking, believing, and receiving” in his spare time, but to make money, he was busy thinking and writing. He wrote “some 39 plays” that “have been  into every major living language and are performed more often than  of an[the works]y other playwright. They also continue to be studied and reinterpreted” and he is “widely regarded as the greatest writer in the English language” and the world’s greatest playwright.

He may have had some “asking, believing and receiving” going on. Who am I to say that he didn’t? We can’t possibly know. But what we can know for sure is that he was also busy thinking and writing. For sure, he was doing that. And my guess is, if he hadn’t been doing that, we wouldn’t be thinking or writing about him today at all.

Who’s next on the list of famous humans who supposedly knew The Secret? Newton. Sir Isaac Newton was evidently one busy dude, because with all his “asking, believing, and receiving,” (and how can we possibly know how much of his time was consumed by this? Who’s to say???) but while he was busily doing it–“asking, believing, and receiving”–he also was making seminal contributions to math and science, to the point that he is “widely recognized as one of the greatest mathematicians and most influential scientists of all time and as a key figure in the scientific revolution.” Thanks to Newton, we have things like infinitesimal calculus, the reflecting telescope, and theories of motion and gravity upon which Einstein’s theories of relativity were built. In addition to discovering all this stuff, he managed to find time to reduce much of it to writing. “His book Philosophiæ Naturalis Principia Mathematica (Mathematical Principles of Natural Philosophy), first published in 1687, established .” He initially wrote it in Latin and it’s considered one of the most important works in the history of science.

Who’s next on the list? Next on the list is was a “poet, novelist, and dramatist who was the most important of the French Romantic writers.” needs no introduction. He “remains one of the most admired composers in the history of Western music; his works rank amongst the most performed of the classical music repertoire.” And how about Lincoln? While he was allegedly, “asking, believing, and receiving” he was most certainly keeping his country together and freeing the slaves. His most famous writing? The Gettysburg Address. He wrote it himself. There are multiple versions of the speech written in his own hand over the months between July 1863 and the delivery of the speech in November 1863. Then there’s Ralph Waldo Emerson was an essayist, poet and philosopher who developed transcendentalism, along with his buddy Henry David Thoreau, and whose written works included an 1836 essay called “Nature”. Following this work, he gave a speech entitled “The American Scholar” in 1837, which Oliver Wendell Holmes Sr. considered to be America’s “intellectual Declaration of Independence.”

I could go on, but I think you get the point. The remaining “historical figures” on the list—Edison and Einstein—we don’t even need to mention. They are among the most valuable contributors to human society in the history of time.

What I’d like you to glean from this list is that the historical figures who were allegedly great proponents of “asking, believing, and receiving” weren’t actually sitting around “asking, believing, and receiving.” What were they doing? They were contributing.

This is the first way that high-profit thinking differs from traditional and nonsense notions of “manifesting money.” Manifesting money in the “Rhonda Byrne” sense of the term basically means putting your desires out into the universe, and thinking that the universe is going to satisfy them.

Is this what actually works? Maybe. I’m all for making money, and if this is a process that actually works, I’m not going to pooh-pooh it. Maybe it is the case that every single person Rhonda Byrne mentions in her book as knowing the power of The Secret manifested riches in exactly the way she’s describing. Maybe this really happens. We can’t possibly know. But in the meantime, what can we readily see from the facts that we know about each of these historical figures’ lives… What we can see is that they made their names and their money by thinking in a manner that generated an enormous amount of value for the world, and then writing or otherwise communicating the value in some manner. Through music, through inventions, or through words that changed the world.

What can we see of Rhonda Byrne’s life? As I mentioned earlier, in the book, I have not identified a place where she says that this process “manifesting money” has worked for her. Well, at some point, she may have “asked, believed, and received” and made money from that. She may have put a request for money out to the universe and focused on it and believed that the universe was going to deliver it to her, and she was willing to receive it and maybe the universe did deliver. All of this may be true. But what do we know for sure about the money she made in her lifetime? The facts in evidence indicate that she made her money in a different manner. She wasn’t sitting at home “asking, believing, and receiving.” When she made the money she made from The Secret, both the books, and the film, what was she doing instead? She was communicating with the marketplace in a manner that made folks in the marketplace want to buy something from her.

This is the first thing I always notice about the folks who are teaching us to “manifest money.” The way they are making their money is by writing books and courses on how to “manifest money.” If I wanted to learn from these folks, that is the thing I would ask them to teach me–how to write books and courses on how to manifest money, because clearly this is something they know how to do. I don’t want to learn that, because I think it’s nonsense, but if I was paying them to teach me something, that is the thing that they clearly know how to do.

Do they know how to “ask, believe, and receive,” and have the riches of the universe rewarded to them as if they are Aladdin, and the universe is their Genie? Do they know how to treat the universe like a giant catalog, and with the power of their unwavering faith, cause the universe to deliver to them? If they knew how to do it, my guess is they wouldn’t be writing books to make money. They would just be ordering up some money, and the genie would be delivering it to them. So if I ever run into someone who is just “manifesting money” and it is appearing through their unwavering belief and desire, I guess I would ask then to teach me how to do it. I’ve never seen that. In all of my travels through the “make money with your mind” universe, I have never actually seen someone who is truly “manifesting money.” This is why I say that “manifesting money,” in the Rhonda Byrne sense of that term, is utter nonsense.

So now the question is, why do so many people believe this is the way things work? Two reasons. One, people want a happily ever after so much that in the absence of a real one, they will buy a poor approximation. The second reason is that Rhonda Byrne isn’t that far off the mark. We’ll talk about that in the upcoming episodes. For now, let’s just say that she’s close enough to the legitimate center of a legitimate moneymaking activity– using your brain to make money– that what she is saying in this book sounds sort of like it could be the truth. And this is how they get you. When someone is on the periphery of the money-making activity, something that legitimately makes money, and they sound like they know what they’re talking about, that is the moment when they are most likely to make money at our expense.

This brings me to a main point for today’s episode. I don’t really know how to say gracefully, so I’m just going to come right out and say it. When you encounter something that powerfully makes money—a concept, a financial instrument, a business practice, a type of business—whatever it is, if it makes a lot of money, you will find, on the periphery of that very powerful and legitimate money-making thing, a whole bunch of folks peddling nonsense that will make them a fortune and do nothing for you but cost you money.

Here’s an example. Back in 1983 a movie came out called Trading Places. In the movie, Eddie Murphy and Dan Aykroyd knew something about the frozen concentrated orange juice market that no one else knew. They also knew that when everyone found out about what they knew, the market was going to shift in a dramatic way. So they used derivative instruments to build a position that would profit from that dramatic shift in the market when it happened. Eddie Murphy and Dan Aykroyd put a little bit of money into the position, and when everyone else found out about what they knew, the market did shift in the way that they anticipated, and they made a whole lot of money as a result.

They were using derivative instruments, specifically futures contracts, in that movie, to make this trade. This is a legitimate money-making activity. The inherent leverage allows you to take a little bit of money, and make a bet, and if you’re right about something big that happens in the market, you can make a lot of money. Hedge funds do this all the time. It’s something I’ve been doing in my own portfolio, with the help of talented experts who know how to trade these instruments, since I launched my own hedge fund over two decades ago.

So why am I telling you this story? Because back when I was a fraud examiner, that movie Trading Places was fairly new. It came out in 1983. I graduated from high school in 1985. When I got my first job as a fraud examiner in the futures industry, they had us watch that movie so we could get a sense of what it means to go long, to go short, how a trade worked, that kind of thing. Of course the movie is very fanciful. It’s dramatized to be entertaining. But watching the movie gave us, our class of brand-new fraud examiners, fresh out of college, the framework of a story to hang concepts on, as we tried to wrap our brains around complicated ideas. One of these complicated ideas is that you can sell something you don’t actually own to make money from a price decline. WHAT? I know. it’s complicated, but that’s how you make money when a market is going to decline. You first sell high, and then you buy low. In other words, you sell something you don’t yet own, and you buy it later to make money on the decline. This, by the way, is what the smart hedge funds were doing in the movie The Big Short. They were selling high and then buying low in using swaps in the residential housing market, and they were doing it before anyone else know the decline was coming. That’s how they made money when the housing bubble burst. You see a market move no one else sees coming. You take a position that will profit when the big price move occurs. And when things no one else saw it coming, occurs, everyone else is shocked. Their sudden shock causes the market to move, and the person is not happening before anyone else makes money.

Are you noticing a pattern here? If you see something coming that no one else does, you can make money from it using a futures contract or other type of derivative instrument. That’s a point that’s going to be important in a minute. And here’s why. That 1983 movie Trading Places highlighted something important to the world. You can place small bets… You can place a bet with a small amount of money. If you’re right in your bet—if the market moves in the direction that will make your bet profitable—it goes up if you’re long, or down if you’re short—your little bit of money can become a fortune.

With this concept highlighted to the world by that movie Trading Places, what happened? What always happens anytime big money is legitimately being made. As I said earlier, the legitimacy at the center of any highly profitable activity attracts a whole bunch of shady folks to the periphery, who don’t really understand what’s happening, and who don’t really know what they’re doing, but who can smell money and who want to grab some of it for themselves through whatever means possible. And generally, these money-grabbers grab the money at the expense of hard-working people who want to live the dream, and who buy into what these money grabbing folks on the periphery are saying, because what they are saying sounds close enough to the truth to possibly be the truth.

This is what happened following the release of Trading Places. When the world saw that you can use futures contracts and other derivatives to turn a little bit of money into a lot of money, a whole bunch of shady salespeople came out of the woodwork. For some reason, many of them were congregated in South Florida. They registered as futures brokers, and they got on the phone and started cold calling. In mass, they were selling the idea of getting rich trading in unleaded gasoline and heating oil to little old ladies and middle-income working folks who believed that these shady brokers knew what they were doing, and that with the help of these shady brokers they, too, could get rich because they were lucky enough to get a phone call from one of these shady brokers.

Here’s how the pitch went. Hey! I can help you make a lot of money. How? Winter is coming! And you know what happens in winter? It gets cold outside, and people need heating oil to fuel their furnaces, and then, the price of heating oil goes up!!! So all you have to do is buy into this market now. It just takes a little bit of money. And when the market moves upward even just a few cents, you will make a fortune!

That’s what they would say in winter. When summer was coming, they would say this: Hey! I can help you make a lot of money. How? Summer is coming! And you know what happens in summer? It gets warm outside. The kids are out of school, and everyone takes vacations. Everyone is driving to Grandma’s house, and the price of unleaded gasoline goes up!!! So all you have to do is buy into this market now. It just takes a little bit of money. And when the market moves upwards even just a few cents, you will make a fortune!

The stories coming out of these shady brokers’ mouths sounded good. Yes, there was fine print about the risk, but upon hearing these shady pitches, most folks ignored the fine print and bought into these horrible deals, over and over, and when they did, they lost big.

Why? It all hinges on a key distinction. In Trading Places, Eddie Murphy and Dan Aykroyd made money by betting in anticipation of a big event that no one else saw coming. The same thing happened in The Big Short. Dr. Mark Burry and a few other hedge funds make money by betting in anticipation of a big event—the housing crisis–that no one else saw coming. What did the shady brokers in South Florida do? They were trying to make money by betting in anticipation of a big event that everyone saw coming. We all know that summer is coming. We all know when winter is coming.  And guess what? Placing a bet on the occurrence of a market event that no one sees coming makes a lot of money. Placing a bet on the occurrence of a market event that everyone sees coming doesn’t make you anything.

This is why distinctions matter so much. In seemingly similar situations, the key distinction makes a huge difference. If you are at the center of a legitimate money-making activity and you know exactly what you’re doing, the money-making activity works. It works better than anything else. If you’re on the periphery of that money-making activity because you have one thing even slightly wrong, you’re off center because you’ve got it a little bit off, the recipe fails. What you’re saying sounds good, but it ultimately doesn’t work, and this is what is going on with “manifesting money” in books like The Secret

Critically important distinctions matter to the dollars you make. They put you at the center of a legitimate money-making activity, or they put you on the periphery, where shady folks are taking your money because their story sounds good but they don’t have it quite right. This is true in using futures contracts to make money, and it’s also true in using your mind to make money. This is a big point I’d like you to glean from today’s episode. Using your mind to make money is exactly like using a futures contract or other derivative instrument to make money. If you know exactly what you’re doing, it works better than anything else. If you get it even slightly wrong, if you’re missing something important such as the key tidbit, it can cost you a fortune. Distinctions matter. If you make the right distinctions, you can and will reduce the risk in your business in a dramatic way, with the way you use your brain. If you make the wrong distinctions, the idea of using your mind to make money can actually increase the risk in your business. It can cost you money.

This is important so I’m going to say it again. Much of what’s being peddled as “using your mind to make money” is actually grooming to underearn. It’s actually increasing the risk in your business. And this is exactly what is happening with books like The Secret.

The advice is, “ask, believe, and receive” and the successful humans they are holding up as examples… as proof that this works, did the exact opposite of that. They didn’t ask for anything. They contributed everything. Beethoven, Edison, Einstein, Newton, Hugo, all of those famous people she lists in the book as “they knew the secret,” and she holds them up as examples… They were contributors, and when they contributed everything that they contributed, what happened, the riches of the universe were bestowed upon them.

That was the case in the businesses of Plato, Shakespeare, Newton, Hugo Beethoven, Lincoln, Emerson, Edison, Einstein, all of them. So here’s what I see again and again: the folks who use their brains to deliver big contributions to the universe, enjoy big benefits in return. What The Secret advises–to think of yourself and what you want–is basically a recipe for under earning because thinking of others and what they want is actually what gets it done as far as making money as concerned. So, this is the second lesson in high profit thinking. Logic is one element of it. We talked about that last time. The second element of it is service. When you’re in high profit thinking, you are not thinking of yourself. Forget manifesting money by focusing on your own desires. Commerce is not a letter you send to Santa Claus. It is an opportunity to solve problems. And this is why high profit thinking involves engaging your brain in solving problems. The bigger, the better. When you do this, you will make money. You will make meaningful money in both senses of the word. You will change lives through your service, and you will change your own life– monetarily and in every other respect in the process.

So what are we going to do next time? Next time, I’m going to take you through The Secret in even more detail, and I’m going to share with you exactly where they get it, right. And where, what they’re saying is just a little off kilter, and how to shift it so that you actually know the exact recipe for high profit thinking. That’s what we’re going to do next time. Today was a big overview. This was a big episode. I want to thank you for hanging in for it. And I look forward to talking with you next time as we dive deeper into high profit thinking how it’s different from “manifesting money” and how it will help you reduce the risk in your business and help you make so much more money. So thanks for being here today. And I look forward to talking with you next time.

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