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The Barbell Strategies - YouTube
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alright folks let's jump into this this
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week what I want to talk about is
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something that I personally find it very
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interesting thinking about a lot and
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something that I think is directly
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applicable to your real estate investing
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business something that you can pretty
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much start doing right away because it's
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not so much a specific tactic this
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whirlen things like everybody wants to
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know about tactics everyone wants to
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know okay well what's going on a
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Facebook what's going on in Google
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what's going on YouTube Wallis stuff all
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that stuff is very important of course
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but one of the things that about tactics
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like that is that they change very
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rapidly they change constantly Facebook
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is a great example of this if you are a
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real estate investor you're doing
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Facebook right now there is a lot that
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is happening to shut down the kind of
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advertising that real estate investors
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have done on facebook forever I'll
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probably end up doing another video on
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the changes inside Facebook and
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everything but that's all changing very
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rapidly and it's it's a situation that's
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this kind of been in flux so it's hard
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to know exactly what's going on but one
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of the things that changes a lot less
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often is the strategy that underlies the
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tactics right so if you can understand
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the strategy you can understand why we
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are doing the things that we are doing
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why we are testing though the things
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we're testing the way that we're testing
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them if you can understand those things
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you can actually understand the tactics
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even as they change and you can be sort
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of ahead of the market in many instances
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and a good example of this let's talk
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about barbell strategies and it loops my
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thing is um woops sorry I'm just doing
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the thing so let's talk about barbell
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strategies okay now what is a barbell
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strategy a barbells you imagine like a
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spectrum right and we've got a picture
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of a spectrum right here and over on the
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left and over on the right we have these
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kind of opposing elements of the
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spectrum so let's put something on here
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let's say how someone feels about where
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thinks about their health on the Left
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we've got something I like to call
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blissful ignorance which is I don't
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think about my health at all I just do
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whatever I'm going to do completely
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natural I don't apply any sort of
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rational thought process to it at all
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and on the right we've got hyper
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Kandra which is I worry about my health
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all the time I'm constantly thinking
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about it I'm constantly looking alike
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all my health stats and I'm like
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obsessing about every single number
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right so over on the Left we've got
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blissful ignorance over on the right
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we've got hypochondria and in the middle
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we've got a various spectrum of people
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and everyone's gonna fall somewhere on
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this line right now most people what
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they want to do is they want to go for
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Aristotle's golden mean which is kind of
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you go straight down the middle and you
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say look I don't I don't want to be
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completely ignorant but I don't want to
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be a hypochondriac so what I'm gonna do
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is I'm gonna go down the middle and what
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is the middle of this spectrum looked
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like what's something like yeah I try to
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be healthy but I don't obsess about it I
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try to eat healthy and try to go to the
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gym I try to do this but like I'm not
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super obsessed about it right so we're
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avoiding the anxiety that comes with
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hypochondria while also avoiding the
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negative consequences that come from
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completely ignoring our health and that
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all sounds really good but the problem
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with this approach is that being in the
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center of this barbell because it looks
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like a barbell right being in the center
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of it actually gives you the worst of
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both worlds you end up getting some of
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the anxiety of the hypochondriac right
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you have this anxiety there like I'm not
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really doing enough like yeah I kind of
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know my numbers but I don't really and I
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I don't have a great grasp on it so
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there's this nagging sense that somehow
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this isn't enough versus you get the so
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a lot of the negative impacts of
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complete ignorance because it many times
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you are not actually doing enough to
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change your situation right sort of
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intermittently going to the gym or kind
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of thinking about your diet or trying to
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eat healthy often is not enough to
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actually change the underlying source
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state of your body and so we're sort of
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we're in the middle of the barbell and
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we end up getting the worst of both
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possible worlds let's look at this in a
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different context right let's think
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about a real estate investor doing their
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marketing okay
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and on the Left all the way over the
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left we have people who don't do any
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marketing at all
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they don't think about their marketing
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they know Tessa whatever I don't know I
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send out a couple postcards we go that's
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all I do and then on the right we have
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someone that's doing
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too much marketing so they're testing
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every possible marketing channel no
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matter what they're running thousands
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upon thousands upon thousands of split
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tests they're actually doing so much
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testing there's so much noise they
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actually can't tell what's going on
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right so both ends of the bargain a
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barbell right opposite serve polar ends
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of this spectrum where we got on the
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person on the Left not doing anything
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and the person on the right doing too
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much now again what most investors are
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gonna do is they're gonna try to find
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the mean they're gonna try to find the
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middle of the barbell and well most food
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we're gonna say it's like yeah I do some
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marketing and I test some things here
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and there right so I do it I do a little
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bit but I try not to obsess about it
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right it's exactly the same as the
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person in the health example right I try
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to eat healthy you try to go to the gym
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but I don't obsess about it this person
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in the marketing example yeah I test
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some things here and there but I don't
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discuss about it but again this brings
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us the worst of both possible worlds
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right we are you know kind of testing
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but we're not doing enough testing to
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actually get the improvement right and
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at the same time we're like taking on
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some of the anxiety of like trying to do
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it at all so it's not as relaxing as the
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person who does nothing and it's not as
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effective as the person who does
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everything and so we kind of get the
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worst of all possible worlds right and
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this is the trouble with moderation
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right the middle of the barbell brings a
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sense of anxiety that we're not doing
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enough while not providing enough
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momentum to actually change our
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situation so what is the alternative if
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the golden mean is not the solution what
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is well this brings us to a barbell
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strategy the barbell strategy and
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Finance basically says you're you're
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making sure that like 90 percent of your
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capital is very safe and you're using
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the remaining 10% on extremely risky
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investment so rather than going down the
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middle and trying to find things that
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are like medium safety medium risky you
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go mostly just completely conservative a
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hundred percent safe and then you take a
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small percentage of that and you go all
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the way to the right and you say I'm
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going all the way risky with a small
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percentage of my total capital right and
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the exact percentage could change it
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could be 80/20 nine to ten whatever it
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is but instead of going on
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you load the ends of the barbell right
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so again we're not trying to find the
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thing that's like in the middle of risky
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and safe we're taking mostly safe things
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and then we're taking some things and
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we're saying I'm going all the way risk
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analyst right so I hope that makes sense
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right so let's look of it in terms of
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our health example right okay so rather
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than going in the middle of barbell
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which again is like yeah I try to work
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out I try to watch what I eat but I try
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not to obsess about it right what we're
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gonna do is take 80% of our health time
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energy effort focus whatever you want to
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call it and we're just gonna put it on
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autopilot we're not gonna think about it
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at all and then we're gonna take the
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remaining 20% of our health time energy
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focus effort whatever you want to call
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it and we're going to focus on improving
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those things with an obsessive level of
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detail now because I'm not obsessing
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about everything I'm only obsessing
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about a very specific type of thing and
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I'm really only spending a tiny
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percentage of my time therefore money
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focus whatever you want to call it I'm
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avoiding much of the anxiety if
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someone's gonna be a hypochondriac about
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everything but I'm also getting
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significant benefit in those areas by
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really massively improving them right
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now let's think about this and let's
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think about this in terms of marketing
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right so let's think about this in terms
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of REI marketing all right if we are
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marketing for for our real estate
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investing business and you absolutely
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should write REI is very much a
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marketing and sales business at its core
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right we're spending 80 percent of our
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time energy budget whatever you want to
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call it let's change this into budget
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right and we're putting that marketing
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on autopilot we're saying look I'm not
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trying to change everything all at once
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but I don't want to ignore it so 80% of
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it I'm just gonna put it on autopilot
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I'm gonna let it run I'm gonna let it do
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its thing but 20% of my budget my time
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my energy my focus I'm going to focus on
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improvement and or testing right so I'm
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gonna be trying new channels or I'm
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gonna be trying new ads within those
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channels I'm going to be testing new
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headlines and maybe testing new
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strategies whatever it is even
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providers right working with new people
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whatever it is 20% 10% of my time energy
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budget is going towards those risky
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things that I'm trying to improve and
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then 80% of it I'm putting it on
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autopilot what that's gonna do is
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minimize the amount of anxiety that and
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stress that we're taking on well
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maximizing the total amount of
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improvement that we can gain and here's
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what I mean by that right
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tiny gains have a massive power to
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improve your business long term all
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right so this is a really good example
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of just like 1% improvement every day so
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1% improvement every day because it's
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cumulative can have a massive impact
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over the course of a year right so what
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we're trying to do is we're not saying
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like look every single thing I do has to
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work everything signal thing I do has to
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be successful every single test I do has
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to win that's never going to be the case
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but by consistently following a barbell
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strategy what ends up happening is it by
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the end of the year you are far beyond
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the person who tried to stay in the
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middle of the barbell again you're not
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taking on a ton of risk but by putting
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some time and effort and budget and
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focus and energy and all that stuff into
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small experiments that have the
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potential to really make a difference
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over the course of long term you end up
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way farther along than you would have
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been otherwise and the way I think about
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this right is I really think about
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tinkering I think about this from a
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tinkerers mindset for most of your
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business most of your life most of your
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health and most of whatever you're
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trying to work on and improve and
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maximize over time you want to put a lot
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of that just on autopilot we just we
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have limited cognitive bandwidth we just
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can't focus on everything at once it
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just doesn't work but if you pick out a
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few areas where you like look I could
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really have an impact here and you just
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tinker with it consistently you say I'm
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gonna try this thing and see how it
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works maybe it works maybe it doesn't
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then I'm gonna move on the next thing
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I'm gonna try this thing and see if it
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works maybe it works maybe it doesn't
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then I'm gonna move on I don't try the
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next thing and maybe this works maybe it
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doesn't and you do that consistently
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over and over and over what ends up
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happening is that over the period of a
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year two years five years ten years
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whatever you are looking at you are
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going to be much much further along then
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if you tried to stay in the middle of
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barbell and just try to do a little bit
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of column a a little bit of combi rather
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than trying to go for Aristotle's golden
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mean think about the barbell and
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thinking about what 80 percent of
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everything I'm working on can I just put
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on autopilot now think about and what 10
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to 20 percent can I really focus in on
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and really try to improve and that is
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how you maximize your long-term
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performance while minimizing your
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short-term stress anxiety disaster
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depression whatever you want to call it
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and that my friends is the barbell
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strategy now I hope this makes sense I
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hope this is useful you let me know in
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the comments you're gonna let me know
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you know leave me or whatever just let
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me comment somewhere online let me know
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what you think because I would very much
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like to see what your take is on a
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barbell strategy like this and how you
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can apply it to your real estate
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investing business because I got to tell
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you we apply this at our business and it
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has been massively valuable I hope it is
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the same for you let me know what you
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think everyone I will be talking to you
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very soon this is Danny Barrett signing
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off Cheers
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