Why giving leads to getting

Many years ago I heard a quote from the late great Jim Rohn who said that if you help enough people solve their money problems, then all yours would disappear. At first I thought it was motivational bunk.

But while reading the terrific book Homo Deus by Harari recently I came across something called The Ultimatum Game. It is a famous experiment in behavioural economics which disproves the theory that we are all rational beings when it comes to money and economics.

In this experiment, usually conducted with two people, one of the them is given $100, which they must decide to divide between themselves and the other participant in any way they want. The person may keep everything, split the money, give most away, or keep more for themselves. The other player can do one of two things: accept the suggested division, or reject it outright. If they reject the division, nobody gets anything.

Classical economic theory would suggest that people are rational calculating machines. They assume that most people will keep $99 and give the other person $1. And that, the person would accept the offer of $1 because it is still better than getting nothing. They claim that a rational person would always accept a free dollar. Except that we don’t – and it isn’t irrational.

For the record most people split it 50/50. Some 40/60 or 30/70.

People may think that we reject tiny offers because it is ‘unfair’, they look like ‘suckers’, but it has more to do with the fact that our social structures just don’t operate that way. We humans work on a warm social logic. We know that sometimes we have more and sometimes we have less. We split the labour amongst our tribe and try to collaborate so we all have more through trade and trust. Once we do this the laws of reciprocity set in. We know we are all in it together, and we benefit more through sharing, than we do through gauging. We know this intuitively through thousands of years of evolution. Greedy people and pure suckers, well, their DNA never made it through the many famines.

A practice what I preach. Come join me in Melbourne June 20th, for a Free night where I share ideas I’ve learned in my career, from my new book, The Lessons School Forgot. Drinks on me, and I’ll answering any questions you have about your future.

It’ll be a great night. Hope to see you there.

Stay rad, Steve. 


Philosophy, Attitude & Activity

One of the most inspiring Business coaches I listen to is the late Jim Rohn. While he comes from the old school of American Motivation, he does have some very sensible philosophies worth paying attention to. I usually listen to him while jogging. And the other I was doing just that when he said these 3 words. He went on to talk about why they were important, but by this time my mind was already wondering into my own interpretation of what they mean, why they matter and why they are actually in order. And here’s is what I think.

Philosophy: The first thing that has to change is how we view the world. We need to embrace of philosophy of self responsibility. The first thing that must change is our mind. But this on it’s own is not enough. How many smart people have you met who can talk a good game, but never do anything about it?

Attitude: It’s no point knowing about something valuable unless we truly believe it is possible, and that it is possible for us. I actually find the word attitude interesting as it is referred to in aviation. The attitude of an aircraft is its angle of flight, or orientation in reference to the ground. Basically, the direction it is headed… While flying, attitude is something which requires constant attention and maintenance.

Activity: It all means nothing if it is just mental. We’ve got to act on the two above factors, or we’ll just end up as another one of those people know the path, but never actually walk it.