Monthly Archives: February 2025

Life is About Understanding Incentives

Incentives are everywhere. They’re all around us. You’ll have a better chance at navigating life, if you can better understand the incentives in play and learn to play the game on your terms.

I hope to challenge your thinking here, open your aperture and see the world through a new lens.

Who Loves Taxes?

The Author and CPA Tom Wheelwright says, “the tax code is a list of incentives the government wants entrepreneurs and investors to use.” That was certainly an eye-opening way for me to look at taxes. Let’s go deeper.

We’ll never forget this 2016 Presidential Debate moment when Hilary Clinton thought she’d staple Donald Trump against the wall for stating, “He doesn’t pay taxes!” And what was Donald’s response? “Because I’m smart!”

Now regardless of how you feel about either of them, what people need to understand is Donald (love him or hate him) understands tax incentives. What do these incentives look like? The government rewards entrepreneurs or developers, for building housing, or creating jobs. It’s in the IRS tax code. Curious how this works?

Lets say you build a property for $10,000,000. Relatively a small number, but in doing so there is depreciation expense the owner of that property gets to write off for the next 27.5 years against the income. So if the owner depreciates the property $363,000 per year, any income they generate up to but not excluding $363,000 isn’t taxable. If you want to get mad, get mad at Congress. It’s the law and it’s legal. That’s why the wealthy love real estate. They can generate income, and not pay taxes. Legally.

Ask Robert Kiyosaki the author of the hit Rich Dad Poor Dad how he feels about taxes. He sees them as a game. What draws developers to “Opportunity Zones” in developing real estate? Tax incentives. Who better to understand this than those who write the code? The IRS! Incentives are everywhere.

Lets Look at Employment

There is a good chance if you have a job, your employment contract contains expectations for your role. Those expectations contain incentives. So what’s the incentive? A paycheck. And if you’re in sales or a revenue role, there very likely is a variable incentive or “commission” you can obtain. Why? The business will reward you for the behavior they’re looking for(higher top line revenues). If your compensation has recently been changed, it’s because the business is looking to change behavior and reward different outcomes. Pay close attention to these changes and take advantage.

I’m an avid listener of the FOUNDERS podcast (Learn from history’s greatest entrepreneurs. Every week the host reads a biography of an entrepreneur and find ideas you can use in your work). What’s one consistent theme of the greatest entrepreneurs across hundreds of episodes? They all have a knack or deeply understand the power of incentives to drive the behaviors needed in their business.

How about Healthcare?

I can’t even call it health care with a straight face. It’s SICK-Care, and it’s not well done. Why do we need to understand these incentives? Because in my opinion, the incentive isn’t for a doctor to make you well, or have a holistic view of your health. Their job is to write prescriptions and move you along. Why is it the average doctor visit is only minutes long? Because their incentive is to see MORE patients. Not cure you and all those waiting. Really think about this. It’s worse as you go down the specialty medicine path as they only focus on their trained discipline. Getting a new prescription? This happened to me a little over a year ago, and I asked my GI doctor outright, “are you incentivized to get me on this medication?” That got awkward. But the question remained, “is this about me, and my health…or your incentive?!?!”

Insurance Costs

Insurance companies are becoming more interested in the overall/general health of its customers. But they want to know the numbers. So much so, that if you submit annual blood work, and physical, they’ll reduce your annual rate by upwards of 30%! Seems to be a pretty solid incentive.

Why are they doing this? They’re dangling the incentive of cost savings to you, because it will likely drop their liability ten fold by having a better view of those they’re insuring. I’m fine with it either way, just understand the incentive.

Does the NBA Know Incentives?

They sure as hell do, and it just cost Luka Doncic $100,000,000 (yes, one hundred MILLION) by getting traded to the Los Angles Lakers!! Why? Because the NBA incentivizes players to stay in the city they were drafted in, by rewarding them with larger “Super Max” contracts. Otherwise, all the stars would end up in: LA, Boston, Miami, etc. and leave the small market: Oklahoma City, Milwaukee, Memphis, Sacramento, and so on. So instead of signing a 5-year, $350M contract this summer in Dallas where he was drafted, he’ll have to settle for a 5-year, $250M contract in LA. Not sure how he’ll afford the eggs…

Keep Your Eyes Open for Incentives

Everyone around you is trying to get something done. Don’t be naive. If you can look around the corner, you can better understand the behavior they’re looking for. The next step is choosing if, or how you’d like to participate.

Behavior Trumps Knowledge

We don’t have a knowing problem. We have a Doing…DO THE WORK problem! And as a society, it’s killing us!

The hyper-connected world we live in provides unique access to learn nearly anything imaginable. So what’s stopping everyone from being: healthy, wealthy and strong? Or at least, not obese, not in debt up to our eyeballs, and not weak?

  • Diet – I believe we all understand the concept that eating McDonalds or KFC every day isn’t healthy. It’s garbage. Would it surprise you that as a nation, we’re fatter, and unhealthier than we’ve ever been? In 2021, 38% (97 million Americans age 18 or older) were pre diabetic. That’s so sad!
  • Health – How much would it cost to get in shape? I’d argue if you have a smartphone and therefore, access to the internet, there are thousands, probably millions of workouts available on YouTube. If you’re just getting started, or looked to get shredded, there is something for everyone. There are literally plans to go from the couch to a marathon in one year!! Knowing problem, or doing problem?
  • Wealth – Less than 1 in 4 Americans have more than $1,000 in a savings account. Yet, the knowledge path to creating financial independence is quite simple. Spend less than you earn. Not sexy, but simple. Simultaneously, as 1 in 4 has less than $1,000, the US has $1.166 TRILLION in Credit Card debt. One Trillion is 10, one-hundred billion dollars. We’re going the wrong way.

So what gives?

It’s my belief as a society we’ve gotten weak and undisciplined and it’s also my belief that this is making us unhealthy. How do I know? I know this as I lived it in my twenties! The decade was filled with late nights, continuously poor diet choices, and persistent stress from work with little to no fitness regimen. What happened? The story I tell myself is that this destruction of my body led to my autoimmune disease taking hold of my body…begging me to slow down and take inventory.

Was I short on knowledge or were these issues behavioral? I knew what I was doing, I simply had no discipline.

To further this issue. I also believe the advancement in technology and medicine created the space to “Solve” an ailment with a pill. When offered the choice: hard work & behavior change, or a pill…the pill is winning in a land slide. (market capitalization of Ozempic is: $600 Billion.

Luckily, I have knowledge to lean on to change behavior. There are age old lifestyle principles to live by:

  • Get sunlight and movement every day
  • Make REAL connections with other real human beings
  • When possible stress your body with exercise. A good sweat is a good indicator.
  • Eat nuts, fish, meat, and vegetables. The closer you can get from farm to table, the better.
  • Limit Debt and invest for long term asset growth. Einstein said, “compound interest is the 8th wonder of the world!” Embrace it.

This ancient cocktail produces a life free of self-induced stress on the body. That same body will produce the energy needed to live a wildly successful life.

What You’re Not Changing, You’re Choosing

Here’s the rub. As a society, many would rather have credit card debt, and a designer handbag than go through the discipline of saving for the time it would take to make the purchase. How do I know? Nearly 50% of Americans have used [buy now, pay later] installment purchases for regular consumer purchases like a pair of jeans. All this does is kick the can down the road, and this unquestionably adds undue stress. This is the piece I think many are missing. Bad diet, stresses the body. Poor finances and loads of debt, stresses the body. Immobility and lack of movement, leaves the body weak. All of these limit vitality AND weaken the mind to succumb to poor choices. The story repeats itself until society is immobile, overweight and heavily medicated on a cocktail of: diabetes, heart, anti-inflammatory and diet medications. It’s disgusting.

It’s Going to SUCK. So Embrace it. Choose your Suck!

Life has taught me, starting anything new is likely going to: look weird, suck, hurt, feel awkward. Then you do it a second time and it sucks less. But the question I think we’ve got to be asking ourselves is how can we better choose our suck? Would you rather it: Suck Now or Suck Later?

  • Would you rather choose to suck it up, ditch most sugar/processed food and eat “mostly healthy” for six out of seven days and week? All while sucking it up to sweat 4-5 days a week? Trade a little discipline for a long life of vitality?
  • Or would you rather choose the easy path (Suck Later). Eat fast and cheap garbage, mixed with a life of limited movement. Know you’re choosing an alternative suck down the road of: Diabetes, heart disease, a wheel chair and wheezing while on oxygen in your 60s!! Sign me up!

Excuses make today easy, but makes tomorrow hard.

Discipline makes today hard, but makes tomorrow easy.

We don’t have a knowledge problem. We have a doing problem. Share and get to work. Today!