#680: Richard Koch — Revisiting the 80/20 Principle, The Power of Optimistic Journaling, Studying History to Improve Investing, and The Grand Beliefs of Winners (Plus: The Toxic Beliefs of Losers)

Brought to you by Eight Sleep’s Pod
Cover sleeping solution for dynamic cooling
and heating and
Wealthfront high-yield savings
account.


Richard Koch (@RichardKoch8020) is an
entrepreneur, investor, former strategy consultant,
and author of several books on business and ideas,
including four on how to apply the 80/20 principle in all walks
of life.


His investments have grown at 22 percent compounded annually over
37 years and have included Filofax, Plymouth Gin, Belgo, Betfair,
FanDuel, and Auto1. He has worked for Boston Consulting Group and
was a partner at Bain & Co. before joining Jim Lawrence and
Iain Evans to start LEK, which expanded from three to 350
professionals during the six years Richard was there.


In 1997, Richard’s book The 80/20
Principle reinterpreted the Pareto
Rule—which states that most results come from a small minority of
causes—and extended it beyond its well-known application in
business into personal life, happiness, and success. The book,
rewritten in 2022, has sold more than a million copies, been
translated into roughly 40 languages, and has become a business
classic. It was named by GQ as one of the top 25 business
books of all time. Richard’s latest book is Unreasonable
Success and How to Achieve It. 


He has two upcoming books: 80/20 Beliefs, which
identifies the very few beliefs in our lives that strongly
influence what we do, and, therefore, the results we get, as well
as 80/20 Daily, a collection of 365 short daily
readings using the 80/20 philosophy to achieve the good life.


Please enjoy!


*


This episode is brought to you
by Eight
Sleep! Eight
Sleep’s Pod Cover is
the easiest and fastest way to sleep at the perfect
temperature. It pairs dynamic cooling and heating with
biometric tracking to offer the most advanced (and user-friendly)
solution on the market. Simply add the Pod Cover to
your current mattress and start sleeping as cool as 55°F or as
hot as 110°F. It also splits your bed in half, so your partner
can choose a totally different temperature.


Go
to EightSleep.com/Tim and
save $250 on the Eight Sleep Pod Cover. Eight Sleep currently
ships within the USA, Canada, the UK, select countries in the EU,
and Australia.


*


This episode is also brought to you
by Wealthfront! Wealthfront
is an app that helps you save and invest your money. Right
now, you can earn 4.55% APY—that’s the
Annual Percentage Yield—with the Wealthfront Cash Account.
That’s more than eleven
times more interest than if you left your money in
a savings account at the average bank, according to
FDIC.gov. 


It takes just a few minutes to sign up, and then you’ll
immediately start earning 4.55% interest on your
savings. And when you open an account today, you’ll
get an extra fifty-dollar
bonus with a deposit of five
hundred dollars or
more. Visit Wealthfront.com/Tim to
get started.


*


[06:18] What3Words.


[12:59] Upbeat fish pond reflections.


[15:04] Journaling toward optimistic investment.


[17:14] Betfair vs. bookmakers.


[27:42] How history ties in with investment strategy.


[33:47] Assigning probabilities.


[36:56] The cows, the stars, and the question marks.


[45:41] 80/20 happiness.


[57:36] A qué será, será quandary.


[1:06:48] Toxic beliefs and terrible templates.


[1:11:24] A meeting with Bill Bain.


[1:14:41] Charm school.


[1:15:08] Why Bain & Company was a better fit than BCG had
been.


[1:17:34] The formula.


[1:25:04] Identifying one's own toxic beliefs.


[1:35:04] Opposites to toxic beliefs.


[1:41:53] Churchill's helpful delusion.


[1:47:46] The formation of grand beliefs.


[1:51:06] How grand beliefs can become toxic.


[1:53:37] Pattern interruption.


[1:56:08] The Oxford Experience for 99/1 people.


[2:09:04] A bespoke request for hands-on art.


[2:11:33] Useful beauty.


[2:18:55] Parting thoughts.


*


For show notes and past guests
on The Tim Ferriss Show,
please
visit tim.blog/podcast.


For deals from sponsors of The Tim
Ferriss Show, please
visit tim.blog/podcast-sponsors


Sign up for Tim’s email newsletter (5-Bullet Friday)
at tim.blog/friday.


For transcripts of episodes, go
to tim.blog/transcripts.


Discover Tim’s
books: tim.blog/books.


Follow Tim:


Twitter: twitter.com/tferriss 


Instagram: instagram.com/timferriss


YouTube: youtube.com/timferriss


Facebook: facebook.com/timferriss 


LinkedIn: linkedin.com/in/timferriss


Past guests on The Tim Ferriss
Show include Jerry Seinfeld, Hugh
Jackman, Dr. Jane Goodall, LeBron James, Kevin
Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew
McConaughey, Esther Perel, Elizabeth
Gilbert, Terry Crews, Sia, Yuval Noah
Harari, Malcolm Gladwell, Madeleine
Albright, Cheryl Strayed, Jim Collins, Mary
Karr, Maria Popova, Sam Harris, Michael
Phelps, Bob Iger, Edward Norton, Arnold
Schwarzenegger, Neil Strauss, Ken Burns, Maria
Sharapova, Marc Andreessen, Neil Gaiman, Neil de
Grasse Tyson, Jocko Willink, Daniel Ek, Kelly
Slater, Dr. Peter Attia, Seth Godin, Howard
Marks, Dr. Brené Brown, Eric Schmidt, Michael
Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan
Peterson, Vince Vaughn, Brian Koppelman, Ramit
Sethi, Dax Shepard, Tony Robbins, Jim
Dethmer, Dan Harris, Ray Dalio, Naval
Ravikant, Vitalik Buterin, Elizabeth
Lesser, Amanda Palmer, Katie Haun, Sir Richard
Branson, Chuck Palahniuk, Arianna Huffington, Reid
Hoffman, Bill Burr, Whitney Cummings, Rick
Rubin, Dr. Vivek Murthy, Darren
Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter
Thiel, Dr. Gabor Maté, Anne Lamott, Sarah
Silverman, Dr. Andrew Huberman, and many more.


See Privacy Policy at https://art19.com/privacy and California
Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.