Would You Bet Your House On The Turn of A Card? High Stakes Lessons with Alec Torelli

In this episode, we share lessons from the world of high stakes poker. What’s it like to bet millions on the turn of a card? What can we learn about making better decisions and dealing with tough emotions under these extreme circumstances? We share a powerful strategy for managing your emotions in a crisis, show you how to make tough decisions like a professional poker star, and much more with our guest Alec Torelli.

Alec Torelli is an entrepreneur, motivational speaker, and professional poker player. As a poker player, Alec has won millions playing live cash games and some of the biggest tournaments live and online. As a coach and digital entrepreneur, he shares his knowledge and insight to help others achieve their life goals. Alec has been featured on ESPN, CBS Sports, Travel Channel, Fox Sports, Poker News and many more.

How a lanky 16-year-old become one of the highest stakes poker professionals in the world
Making the decision to drop out of college - how do you justify it?
How you can make tough life decisions by logically evaluating the downside
Talking to yourself in the third person helps you pull out of the emotions of a tough moment and get a more objective perspective?
Why you shouldn’t let the fear of other people’s opinions hold you back
Logic vs Intuition? How do you use each of them to make decisions? Which is more important.
You don’t have to choose between logic and intuition - the best decisions merge the two of them together. They should work in harmony.
Intuition is not the same as emotion. They are very different.
Reframing into the third person is a powerful strategy to take yourself out of tough situations and make much better decisions under pressure.
Ask yourself: “What should Alec do here?” If you’re watching Alec play poker, what advice would you give him in this spot?
Emotions often arise when you latch onto something and you want it to be different than it is - you want something to be a way other than it actually is - you become frozen in what was.
Meditation and mindfulness and powerful strategies for peak performance at high stakes
Self-forgiveness and self-compassion are cornerstones of improvement and growth at the highest levels
Evaluating your decisions on the merit of the decision-making not the merit of the outcome.
The biggest decision making lessons from poker.
Most people operate under the illusion that good decisions to lead to good outcomes, but the real world is much messier than that - there is a huge amount of variance and noise between a decision and an outcome.
Don’t get caught up in “n of 1” fallacies when making decisions - just because something worked for someone doesn’t mean it’s a good decision.
Outcomes in life aren’t binary - when you only view things are 0 or 100 you are missing a huge amount of perspective when weighing your decisions. Most things in life aren’t black and white - think about the probabilities of outcomes.
The reality is that luck plays a huge roll in everyone's’ life. Being dealt a winning hand is a pre-requisite to succeeding in a lot of ways.
Look for bigger sample sizes when making decisions - don’t overweight short and small sample sizes.
How do you prioritize what’s important in your life?
Before you do anything - figure out what you’re trying to accomplish?
- Before making a bet in poker
- Before spending your time on something
Homework: Talk to yourself in the third person when making a tough decision.
Homework: Take up a meditation practice.
Homework: Get really clear about your personal goals. Track your spending - what get’s measured get’s managed. And align your spending with your goals.
- Starting small, and re-aligning your resources with your goals - GREAT suggestion.

Thank you so much for listening!

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Want To Dig In More?! - Here’s The Show Notes, Links, & Research

General

Alec’s Website and Wiki Page
Alec’s LinkedIn, Twitter, and Facebook
Conscious Poker Website
- Conscious Poker Membership
- Intro to Hand Reading Course

Media

[Profile] The Hendon Mob - Player Profile: Alec Torelli
Poker Listings - Alec Torelli: "It’s Not Just About the Game and Money" By Dirk Oetzmann
[Article Directory] Poker News - Alec Torelli
- “ALL IN with Evan Jarvis: Interview with Alec Torelli” by Sarah Herring
[Podcast] Rec Poker: Ep 085 - Alec Torelli
[Podcast] What Got You There with Sean DeLaney - #152 Alec Torelli- Million Dollar Decision Making (Aug 23, 2019)
[Podcast] Postflop Poker Podcast - Episode 92 - Hand Reading ft Alec Torelli
[Podcast] The Open Mic Podcast With Brett Allan - Ep. 132 | Alec Torelli Professional Poker Player and Entrepreneur, Helps You Find Your North Star In Life

Videos

Conscious Poker YouTube Channel

ThisisPoker- Great Poker Hand Daniel Negreanu vs Alec Torelli
Poker Player Podcast - Alec Torelli on the Poker Player Podcast with Andreas Froehli
[Video Directory] 9 to 5 Poker - Alec Torelli

Misc

[SoS Self-Compassion Episode] Uncover the Root of Your Pain, How to Smash Perfectionism, Love Yourself, and Live a Richer Life with Megan Bruneau
[SoS Self-Compassion Episode] Discover Your Hidden Emotional Insights & What’s Truly Valuable To You with Dr. Susan David

Episode Transcript

[00:00:04.4] ANNOUNCER: Welcome to The Science of Success. Introducing your host, Matt Bodnar.

[0:00:11.8] MB: Welcome to the Science of Success; the number one evidence-based growth podcast on the Internet with more than four million downloads and listeners in over a hundred countries.

In this episode, we share lessons from the world of high-stakes poker, what’s it like to bet millions on the turn of a card, what can we learn about making better decisions and dealing with tough emotions under these extreme circumstances. We share a powerful strategy for managing your emotions in a crisis, show you how to make tough decisions like a professional poker player and much more with our guest, Alec Torelli.

Are you a fan of the show and have you been enjoying the content that we put together for you? If you have, I would love it if you signed up for our e-mail list. We have some amazing content on there, along with a really great free course that we put a ton of time into called How To Create Time for What Matters Most In Your Life.

If that sounds exciting and interesting and you want a bunch of other free goodies and giveaways along with that, just go to successpodcast.com. You can sign up right on the homepage. That’s successpodcast.com. Or if you’re on your phone right now, all you have to do is text the word “smarter”, that’s S-M-A-R-T-E-R to the number 44-222.

In our previous episode, we unlocked the power of asking. When you ask for what you need, miracles can happen, but so many of us are too afraid to really ask, or we feel like we don't know how, or what we should be asking for.

How do you get better at asking? How can you tap the tremendous power and potential of the social capital within your network by using the power of asking? We asked and answered all of these questions and much more with our previous guest, Dr. Wayne Baker. If you want to finally ask for what you really want in life, listen to our previous interview.

Now for our interview with Alec. Please note, this episode contains profanity.

[0:02:13.8] MB: Today, we have another exciting guest on the show, Alec Torelli. Alec is an entrepreneur, motivational speaker and professional poker player. As a poker player, Alec has won millions playing live cash games in some of the biggest tournaments live and online. As a coach and digital entrepreneur, he shares his knowledge and insights to help others achieve their life goals. He's been featured on ESPN, CBS Sports, The Travel Channel and many more media outlets. Alec, welcome to the Science of Success.

[0:02:39.9] AT: Hey, Matt. It's an honor. Thanks for having me. I appreciate it.

[0:02:42.3] MB: Well, we're super excited to have you on the show today. As many longtime listeners know, I'm an avid fan of poker and I think there's so many lessons that can come out of poker to teach us to be better decision-makers and live better lives. I'd love to start the conversation out and explore a little bit how does your poker journey begin and how did you become someone who played at some of the highest stakes imaginable?

[0:03:05.7] AT: Good question. Yeah, it was a journey. I started playing at 16. I got invited to a friend's house and I won $12 or so my first time playing. They say, the worst thing that could happen to someone that is betting or gambling is they win their first time, because then they're hooked. I was extremely hooked. I loved it. I loved the fact that it was – there's a psychological component that I could beat my friends, that I can make money. I seem to have a knack for it. It was probably almost completely due to beginner's luck winning the first time, but of course it went to my head I thought I was some hotshot.

That just propelled me to keep playing the game and just get as good as I can and play as often as possible. In high school, I really got serious about poker. I was playing after school every day that I could find the game. I was reading what limited books there were and talking with friends. It became apparent that I was one of the better players in the home games that I would play in and I would consistently win money.

Later in high school, I started playing online poker. I had some good results early on. I remember one day after school I went to a friend's house and I won a tournament. There was 500 people that entered. I got first place and won over 2 grand, which in high school is infinite money. I was going to retire.

These early successes allowed me to really remain enthusiastic about poker and keep pursuing it as much as possible. When I was 18, I was at SMU in Dallas, Texas and I was making a decent amount of money playing online poker. I'd saved up probably between 20 and 30 grand, which was a lot for an 18-year-old at the time and in college. I realized that I was slacking behind in university, because I was dedicating so much time to poker. I was playing tournaments late at night on Sundays, staying up till 4:00 or 5:00 in the morning and then missing my economics class.

I realized I'm at this crossroads where I could not become better at poker and move to the next level and achieve my goals of traveling around the world and playing in some of the biggest tournaments and cash games if I'm still in university. Even athletes, not to compare myself, but I have the same dilemma. Should I stay in school, or go to the pros? You just can't do both if you want to compete at the highest levels, right? Especially if you want to get a degree and focus and all these things.

I evaluated my worst case scenario and I realized, you know what, the worst thing that happens is I'm 19-years-old. I’d give myself a year. I lose the 20 or 30 grand I saved and I'm basically back in the same place as everybody else, except I'm one year older, which is not really that bad of a worst-case scenario. I just lose a year of time, but I have this incredible experience and I get to test what it's like to live out my dream.

The best-case scenario is that I make it somehow and I reach this goal and I'm traveling the world and I'm playing on the level that I see these people that I look up to on television playing in. That was a pivotal moment for me and I really went all-in at that time. I had some good results after that, some ups and downs along the way. I mean, this was 15 years ago, so obviously it wasn't – the rest wasn't all history. It was making that choice that gave me the at-bat to get the successes that later came.

Shortly after that, things went really well for me. I moved to Australia, because I couldn't play poker in the US and I wanted to compete in the biggest tournaments. While I was there, I got up early one day to play an online tournament. Actually, it was the biggest tournament in history at the time. I ended up winning. I won over a quarter million in a day and I was 18 or 19 at the time. That year, I continued to play a lot of online poker and I became one of the biggest winners in online poker on the biggest website at the time, called Full Tilt.

In cash games alone, I made over a million dollars that year. I feel weird saying numbers, but unfortunately that's the only way we have of keeping score. I can't tell you how many points I scored. I could just tell you how many dollars I won, so I don't want this to come across the wrong way, but that's our metric, or it's our currency. That really put me on the map and gave me those early successes that allowed me to continue throughout my poker journey.

[0:07:10.1] MB: That's fascinating. The Full Tilt reference. I was a Full Tilt player back in the day and I remember it didn't have nearly the pallets that you had on there, but I remember having all my funds frozen and everything when the site got shut down.

[0:07:21.7] AT: Yeah, me too.

[0:07:22.2] MB: Which I'm sure was much more problematic for you. Even the subtle mental model that you just shared just now is really interesting, which is this notion of evaluating the downside and making a decision which seems really controversial, something like dropping out of college.

Yet, you looked at it in a very rational way and realized that instead of carte-blanche ruling it out, or catastrophizing and thinking that, “Oh, I can't do that. My life will be over.” You looked at it in a really rational perspective and I think that's something that's missing in a lot of people's lives is this idea of looking at tough decisions and figuring out and actually logically mapping out what's really going to happen if I take this seemingly crazy risk?

[0:08:04.8] AT: Yeah. I have my parents to help thank for this instilling me this this process. My dad is very analytical, logical. My mom gave me extreme amounts of confidence to believe in myself. I could confidently say at the time, this was before poker was really on the map 15 years ago, zero people that I talked to thought that dropping out to play poker was a good idea. It really took a little bit of conviction there. I got that confidence from my mom’s side. Then from my dad's side it's really about the practical side of things and thinking things through and being rational and logical about decision-making.

I really feel that skill set was amplified in poker, because what you're taught is to separate the facts from the noise and not let emotions cloud judgment when making decisions and not let fear cloud judgment. A lot of times in poker, you're in a big hand, right? Especially, as I moved up in stakes and started playing bigger and bigger games. When one single bet could be 10, 50, a $100,000 in a single bet, right? Not even a single hand. Just a single bet within a hand. In theory, you can look at it like this is the correct play, but it's another thing to be able to actually make the play.

What poker teaches you to do is really focus on the process of making the right decision, independent of how you're feeling in the moment. Independent of the fact that you may have just lost a big hand, or what are other people going to think if you make a bonehead play and they see you turn over a bluff, or how are you going to be critiqued, or how are you going to be looked at on television by the rail, or the people watching? That really served me well in these times when I needed to make big life decisions and separate those facts from the noise and really evaluate what is the merit of this decision.

I focused on something I tell myself still to this day at the tables. I talked to myself in third-person. It sounds ridiculous to do this, I understand, but I feel a lot of times when you're in the first-person and you're involved in a situation emotionally, that's when it clouds our judgement. By creating space between yourself and the situation, it's easier to see things objectively. Let me give you an example, if your friend asks you for advice about what he should do in a relationship or a personal situation, you usually have a clear answer and pretty confident. Why is it so true that it's so hard for us to see our own situations objectively? That's because we're involved in them.

When you create that space between yourself and say Alec, what is the best decision here? What are the benefits of path A and what are the risks? Then to get those things down on paper concretely and evaluate them separately and then attribute a score to them, or an importance to them, right? Or to attribute a significance to each one of these factors really helped me analyze the situation and see clearly that really the only thing – there really was not that big of a downside. Really what was holding me back was the fear of the opinion of other people. That would have been the only reason why I didn't go through with this. When you get to that place, it's nonsense not to do it. I think that poker really helped amplify this process for me.

[0:11:04.6] MB: That's another critical perspective shift that is missing in so many people, or that I think is such a critical skill set to really separating yourself from the pack, to being at your risk takers, this idea of not letting other people's opinions hold you back or get in your way.

[0:11:22.7] AT: Yeah. I think the idea is to be in a place where you can listen to the opinion of others and respect and take it into account, but always keep in mind that everybody's looking at the world from their vantage point. You can't really ultimately make a decision based on someone else's opinion, because they're attributing their values to your situation. Ultimately, only you know in your heart what is right. It's that guiding intuition that everybody has, where it's the best decisions I feel we make are ones where we just know instinctually what the right direction is.

For example, I talked about this in the keynote I gave where in poker you sometimes use logic versus intuition to make decisions. Sometimes you use intuition to read other people, sometimes you use logic to analyze the math, the numbers and their betting patterns. When you think about your life decisions, the biggest ones we make, I feel most of the time you can you could weigh in to pros and cons.

Even when I was doing this going to college, debating whether or not I should leave university, it was you can get everything down on paper, but then ultimately, that process might help you come to a realization or give you confidence, but ultimately, if you close your eyes in the stillness of your own silence, I feel most people know what the right answer is for something.

It's about listening to that, as opposed to separating the voice of fear. For example, I was together with my wife or my girlfriend at the time and I was – I remember asking a friend like, “How do you know if she's the right person?” Because I was debating, I wanted to propose to her. I was like, “Well, how do I know? There's no guidebook for this and you're not taught this.” Definitely making a huge decision like this, I don't want to get it wrong.

He's like, “Well, you pick three things in a partner and if they have those things that are the most important to you, you know it's the right decision.” I'm like, “Well, okay. On brown paper has these three things. She has many more and not a lot of things I don't like, but am I really going to you use this logical approach to make a decision?” I'm like, “No. This doesn't even make sense, right? I'm not going to make a decision about whether or not to get married, because someone checks my list of boxes.”

I closed my eyes and I just asked myself, “Alec, you have 3 seconds to decide should you marry?" A renowned yes. I just knew that this was the right decision. I didn't overthink it. I didn't analyze it any further or whatever. I just bought a ring the next day and proposed. We've been married six, seven years and things are great. I feel in those situations, people know intuitively what the right decision is, but the key is trusting themselves.

[0:14:02.7] MB: That's really interesting. There's a couple things I want to break down from that. Let's start with this notion of logic versus intuition. Tell me more about how each of those factors into decision-making, both in a crucible, like poker where you're in these incredibly tough decision points and you're in some cases, betting the amount of money that might be a car or a house on the turn of a card. How do you think about weighing those two things and which do you think is more important?

[0:14:30.8] AT: Good question. In one of the biggest hands I played, it was televised hand and I got dealt a monster. I had three nines and the book says to go all-in. I bet out 1,100, or bet into this pot. My opponent raises me. I immediately got a feeling like he had a strong hand. It was just an intuitive read I got. Maybe it's because he looked down at his chips. It's hard to quantify these things. I could try and explain it later and I have a YouTube video explaining my thoughts on this hand, but it's hard to quantify why your intuition gives you a read about something, right?

It's like when you meet someone for the first time, your intuition tells you right away if you like that person or not. It's hard to put into words. It's not because they have a black shirt, or their shoes, or the color of their hair. It's just you get a feeling about them. That's what I'm looking for in poker and also in life as well. I'm listening first to the intuitive read I get about a scenario, a person, a business deal, whatever it may be.

Then I'm using logic to back up what my intuition says, to see if it makes sense and if it checks out. Then I go through the hand I was playing against Chad, for example. I said, “Okay, what types of hands is he going to raise me here? What types of hands is he going to bluff me here with? Is he really capable of bluffing on television? Is he really going to risk this much money in this spot with a bad hand?”

As I walked myself through the logical side of things, I then realized that those things were unlikely. It was likely he had a very strong hand and I folded. It turns out he had a straight. I would have lost the hand if I continued. It's about first and foremost understanding the relationship, but then also understanding that these two things actually work together. I feel in poker, as well as in life, people sometimes identify themselves or feel they have to choose between one or the other.

I think when you look at the best decisions, like in the case of dropping at a university, or marrying my wife, the big decisions as well, these two things should actually work in harmony. There should be a marriage between these two things. When in doubt, I always find that when I'm at the poker table for example, there are times where they're in conflict.

There are times when I feel like for example, I know my opponent has a really good hand and I should fold, but then my rational mind starts talking and I tell myself things like, “Well, I can't fold this hand. My hand is too strong, or the pot is too big. I can't fold. I'm committed.” I start to override my intuition with the voice in my head. I start to override my intuition with logic. Those are the situations where I pay the biggest price.

If you look at your life, I feel these are things as well. It’s when you know you shouldn't get involved with that relationship, but you do anyway because you talked yourself into it, because you say these certain things to yourself and then you get involved and then you get in trouble, or your intuition tells you you shouldn't get involved with this person. It's probably not the right business deal, or you're too busy to take on another task, or another project, but there's this opportunity and it's going to be so important and there's all these logical reasons why you should do it, so to speak, and then talk yourself into it and then it turns out you should have trusted yourself the whole time.

I feel when they're in conflict, I try and let my intuition be my guidepost in decision-making. A really important caveat to this is that intuition is not emotion, right? Emotion is something like, “I'm frustrated. I'm losing at poker. I want to get my money back. I'm going to play really aggressive to try and win this next hand.” That's not your intuition talking. That is your emotion. That's your ego.

I feel having that space, that's why I'm always trying to create that space between the first-person and third-person to help myself emotion from the decision-making process, because emotional decisions unlike illogical or intuition ones, intuitive ones are actually the worst decisions that we can make and those are the ones that cost people a lot of money at the poker table.

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[0:19:45.1] MB: Give me a sense of exactly how you talk to yourself. What does that actually sound like?

[0:19:51.3] AT: It depends on where I am in the hand. My process starts actually in the beginning. I actually teach this to clients that I work with. If you think about a tennis player and how they approach a point of tennis, you can see that they have a very specific routine, right? They go through the process of dribbling the ball a certain amount of times, calling for the towel and then getting ready for the point and then throwing the ball up and serving. I created the same thing in poker. I call it a power routine.

Between every hand, before the cards are even dealt, I'm trying to pry myself to focus on playing the next hand the best way possible. While the hand is being dealt, I'll close my eyes for half a second, take a deep breath and say my focus is to play this next hand the best way possible. That allows the emotion, or charge, whether it's positive or negative from the last hand to step aside and me come back to the present moment and focus on my only objective right now, the only thing that I can control, the only thing that can make me win more money, or earn more chips, or whatever it is is playing this next hand the best way possible.

That might be a trivial decision like folding two terrible cards. That might be all I can do. That is all I can do. I think that helps me eliminate the emotional side of things from the get-go by having a clear focus. Then a lot of times, I'll be in the middle of a hand and sometimes I'll be facing a big decision. Let's say my opponent bets out a large amount of money, or I know that it's the right situation to bluff with a large amount of money, but I'm scared. I'm scared because it's a large amount of money, or I'm on television. What are people going to think if I make a mistake, or he calls me, or I'm wrong? All these thoughts that are going through my head, all this ego going through my head.

I will literally talk to myself in the third-person. I'll say, “What should Alec do here?” I'll pretend that I'm my friend giving me advice, because it's so much easier for the friend to give advice. It's so much easier to tell someone else what to do. Instead of me being in the first person sitting at the table, facing a $100,000 bet, I'll pretend that I'm watching Alec play poker. I'm just the friend sitting over his shoulder telling him, “Hey, look. You should fold. The guy has a strong hand. Or you should bet, the guy has nothing. It's clear this is the best play. Make it.”

Then when I'm giving advice to Alec, then I could step back into the driver's seat equipped with the right information and my focus on making the best decision possible and leave fear and emotion by the wayside. Then I could execute on that play that it is required, that fearless aggression that really separates the good players and the great ones. I try and do that. I fall short many times, but at least I have this system. I feel the system really helps me execute in real-time when the stakes are the highest.

[0:22:30.9] MB: That's super helpful, even that phrase of what should Alec do here? What should Matt do here? Pulling yourself out of that and imagining that you're giving advice to your friend who's playing is such a great tool that you could easily implement in many different tough and high-stakes situations.

[0:22:48.8] AT: I mean, I do this all the time, like even in trivial situations. For example, I manage my own data, but everybody does to some extent manage their own time schedule. Sometimes I'll have free time. Before this interview, I had 30 minutes. I said, “Okay, what should Alec do?” I try and pretend that I'm sitting on the couch looking at this person and thinking like, “Okay, what day has he had? Is he stressed? Does he need to finish something? Does he need to relax? Does he need to read? Does he need to eat?”

It's easier to understand what you should do. Or is Alec hungry, or is he thirsty, or he stressed? What emotions are you actually feeling at this time? Or all these sorts of situations that I face on a daily basis. Because emotion is tough and it often leads us to do things that we think we want in the moment, but that we don't actually want long-term.

For example, what you really want is to be in good shape and feel great and know that you're nourishing your body by exercising and eating healthy, but you don't want emotionally in the moment to have – you want to have sugar and simple carbs and you want to sit and watch Netflix. What you would want if you were thinking about it logically, or long-term is to make a healthier choice and to exercise.

If you let emotion get [inaudible 0:24:08.6] make those decisions a lot of times. Because I mean, a lot of days I get up and I emotionally don't want to exercise. If I think about what is the best decision for Alec to make, it should be to get his ass on the bike and do is 30 minutes of hit training.

I let that be my guide. Then afterwards, I'm always grateful, because you're always happy that you did the thing that you know was best and you reap the benefits of it. In the moments, emotions sometimes speak loudly. If you give in to them, that's when I feel you make mistakes in the macro and in the micro.

[0:24:40.3] MB: That's obviously a very powerful strategy for dealing with emotions in some of these really tough situations. Are there any other tools that you use when you are sitting across the table with hundreds of thousands of dollars on the line making these really difficult decisions?

[0:24:57.2] AT: Like to separate emotion out of the situation?

[0:24:59.5] MB: Yeah, dealing with the emotions in that situation.

[0:25:03.4] AT: Well, one thing that's really helped is just staying present and staying concentrated on the specific hand. Because emotions are only really – usually when you latch on to a thought about the way you want something to be, that it isn't currently right now. For example, you are frustrated that you lost that last hand, because you feel you got unlucky and you’re entitled to win that pot.

Then holding on to that – I mean, that's just a thought, right? That's something that comes. If you give it energy, it will stay in the consciousness of your mind and you'll be thinking about that, but then it's the latching on to the thought that exacerbates the emotion. It's not the thought itself. A lot of times, I don't even know if we can control the thoughts that appear, but we can control whether or not we give attention to them. I feel meditation has really helped in mindfulness, just staying present and observing the thoughts, or to come by, but then not necessarily giving attention to the ones that are going to create an emotional state, a charged emotional state.

For example, I feel all the same things. I'm human. Let's say I get all my money and I'm 90% to win, this happened in the World Series main event. I was all in with aces and someone else had ace, king. I'm 94% to win and I lose. It happens all the time. Obviously, I feel all the same pain that other people feel. I feel frustrated. I feel annoyed. Am I cursed with my luck? Why did that happen to me? Those are thoughts that come. I feel like what I try to do and again, I fall short often, but what I try to do is to come back to the present moment. Ask myself what I can focus on and then pay attention to a more empowering thought.

It's not focusing, or giving attention to the thoughts that could lead to me being in a perpetual negative emotional state. That's a big one. I think that happens and it serves me well in my life too, when something stressful happens to me, or doesn't necessarily happen to me. I want to say it that way. Just I'm encountering a moment of potential stress in my day for something goes wrong in the business, or who knows? A million different things. Having a system to let that go and to focus on a new thought, a new energy pattern is really – has really helped me. I feel like meditation I got to credit a lot from that, and that's been a practice I've been working on for four years.

[0:27:31.0] MB: You mentioned a couple times this notion of falling short, whether it's your mindfulness goals or using the right emotional management strategies in some of these tough situations. The lesson behind that is another key takeaway in performance at its highest levels. That's this notion that it's not about being perfect every single time and collapsing and giving up and beating yourself up when you don't do it perfectly. It's having these routines and strategies. Even if you adhere to them 30% of the time, or 50% of the time or whatever, you create a huge edge over a long enough time sample just by having that little difference and not getting so frustrated that you don't do it every single time.

[0:28:12.5] AT: Yeah, self-love, or whatever you want to call it. Self-forgiveness is something that's difficult. I think we all struggle with it. What I try to remind myself is Roger Federer hits balls in the net and I'm never going to live up to his level in poker, probably anything in terms of his prowess in sport. Of course, I'm going to make mistakes at the poker table. I feel like worst enemy in my own toughest critic. I feel we have to have that if we want to improve. You have to hold yourself to very, very high standards.

In fact, it's arguably the standards you hold yourself to that determine how far you'll get, right? You have to have those standards. At the same time, especially after losing days, I'm very critical about how I played. Even on winning days, I'm very critical about all the hands I play. I write them all down. I come back. I run them in the lab. I run them by my friends who give me brutally honest feedback. Then at the same time, I try and congratulate myself along the way for little milestones, even after a hand where I'm like, “Alec, I think it's okay.”

This is something I only started doing recently. Again, this is something I've struggled with is this self-love thing. I say and I'll allow myself to say to myself without feeling like I'm praising myself for no reason, but to allow myself to say something like, “Alec, you played that hand really well.” Give yourself a little bit of reward, or congratulations on the way, instead of just always beating yourself down when you make a mistake. I think that's fine. You also have to give yourself that praise and reward and accomplishment, the feeling of accomplishment that you're doing well along the way.

Even little things like after a workout now, I'll pat myself on the back figuratively, so to speak, or reinforce something positive in my thoughts mentally about myself that I'm proud, that I actually did this, as opposed to just only holding yourself to that expectation and then every day you don't have a workout, you feel guilty and you're like, “Oh, I'm useless. Or, I forgot.” Or every time you derail from your diet or whatever, you're a failure, you make a mistake. It's also about encouraging yourself the times that you do well.

I think, I'm not little above my paygrade, but I think the science on this is conclusive too, that people respond better to positive reinforcements than they do to negative ones. I've tried to implement that in my own life and my professional life and my personal life as well. It's gone a long way. It's something I wish I did sooner.

[0:30:30.4] MB: Yeah. The research uses a lot of times the term self-compassion for all of that encompassing perspective on self-forgiveness and not beating yourself up. We have some really good episodes that go deeper in that that we'll throw into the show notes for the listeners. I want to change directions a little bit and talk about the decision-making process that comes out of poker. It's okay to use some examples from poker situations, but there's so many powerful lessons that you can learn about making decisions in uncertain conditions, where there's a lot of risk, where there's a lot of things at stake from poker that apply to such broad areas of life.

I know personally, it's been an incredible learning tool for me. I want to hear your perspective on some of the decision-making strategies and lessons that you've taken from poker that you have applied more broadly.

[0:31:23.5] AT: Big question and a good one. One of the things I think poker teaches you to do is to evaluate things based on the merit of the play and not the outcome. You can make the right decision and still lose the hand. That's something that's often hard for people to grasp, because I think we're taught that the efficacy of our decisions relates directly to the outcome. You move your pieces well on a chessboard, you win the game. You answer correctly on a test, you score very high.

This is not necessarily true in all areas of life, because there's randomness, there's luck, there's variance. You can make a poor decision like drinking and driving and get home safe, or you can make a great decision, like leaving a party early because you have to get up early the next day to study, or to spend your time doing something that you value more. That would be a good decision. You could also get into an accident on the way home.

I feel the response that people generally have is like, “Oh, I shouldn’t have left that party early, I never would have gotten in that accident.” Well, you didn't make a wrong decision for leaving the party, you just got unlucky, so to speak, that you maybe got on an accident, assuming you weren't drinking and driving and it wasn't your fault. That's a variance. That's randomness. This happens a lot too with things like – I think poker teaches you to think about the expectation of your decisions as well.

For example, also evaluating decisions based on their merit. For example, you hear people say all the time something like, “Oh, we all know smoking is bad.” Let's say on average, if you have a sample size – depending on how often and when they start. Let's just say on average, it takes 10 years off your life, right? I don't know the exact number, but let's just say it's 10 years. The decision to smoke has the expected value, the expectation of negative 10 years of life. Therefore, it's a bad decision.

Then you'll hear people using an N1 sample saying something like, “Well, my grandma smoked and lived to 90.” That doesn't make smoking a good decision, right? There's always these outlier examples that maybe she would have lived to 105. I don't know, but maybe it just doesn't affect everyone the same way. The point remains that the decision still has an expectation. Because you can't know the future, you don't know what's going to happen. You have to evaluate decisions based on their expectation. You do this in poker all the time.

You're at the table. You don't know which cards are going to come. You just calculate the probabilities and say, “Okay. Well, I'm expected to hit my flush 30% of the time. Therefore, I'm going to play the hand this way.” You could hit it four times in a row, but that doesn't change the fact that on the fifth time, the odds are still the same.

I think about life very much in the same way, even when it's evaluating things like, whether or not to run an ad campaign. You think, okay, what is the cost? What is the sale price and what is the expectation that you're going to gain per ad that you promote and all these sorts of things. I feel it really has helped me think about the way I see the world and the way I really strategize about making life decisions as well.

[0:34:41.0] MB: You brought up so many good points there that I want to dig into. The notion, there's even a subtle mental model that you shared with the example of the grandma, which is perfect. I want to unpack this idea of making decisions, or the fallacy of making decisions with an N of 1 and using these illusory examples.

The other piece of that which is so interesting that you mentioned, which is that you don't see the other outcome with something like that, right? You see somebody who's grandma smoked and lived to 90, but that might be masking the fact that she could have lived longer if she hadn't smoked. There's all of these hidden probabilities and outcomes that you don't necessarily see when you're only evaluating these really small, or individual sample sizes.

[0:35:24.3] AT: Yeah, it's so true. That's a great point. Another one that I've thought about too is that outcomes aren't binary, right? I was talking about this the other day to someone, where it was like, well you evaluate a situation and the expectation is that it's either going to happen, or not going to happen. For example, you are deciding whether or not to go to school and get a traditional job. That is considered a safe route, right? That's like okay, that's safe. Whereas, investing or being an entrepreneur and opening a startup is risky.

I think where people go wrong is they don't properly attribute the probability of each one of these outcomes and they just look at it like binary. One is safe, therefore, my risk is zero. The other one is risky, therefore my risk is a 100. We know that's not true. There are plenty of people that go to school and that can't get good jobs, or there's risks involved. There's college debt and there's – maybe they get fired from the job, maybe the company goes under, right?

I'm not saying that you should not go to school, do a startup. I'm just saying it's important that we attribute the proper risks and percentage, so to speak to each option that we have. It's not like these things are binary. There's some inherent risk in every decision we make. Nothing is a 100 or zero. It's not guaranteed that you're going to fail. A startup obviously, but so – your chance of success in one route may be 10%, the other out maybe 50%, but it's not zero and a 100. I think thinking in terms of the probability of an outcome is the best way to attribute an accurate answer to it.

I think poker really teaches you to do this, right? It's not I went all-in. I'm a 100% to win, or 0% to win. You win based on your probability. You're going to win the hand, let's say 70% of the time. 30% of the time, you're still going to lose, so you need to be prepared mentally, or financially, or whatever it is for that outcome. Then also, being more aware of the probabilities of decisions lets you better plan for them. If you know that you're to succeed in a certain path that you're going or a campaign, or whatever it is, only 70% to succeed, you could properly evaluate whether or not you want to take that risk. 70 is not a 100 and there's a huge, huge difference there. I think poker really helps people see that.

[0:37:57.1] MB: That's a great perspective. I like to think of it in terms of black and white, right? Most things in life are not black and white. There's all these shades of gray. Even if you're looking at something as a yes or a no, even if you just add in a maybe that it might happen, you've increased the amount of options by 50%.

Even if you expand to a field of there's a one out of 10 scale, right? You've essentially 5X the amount of decision-making clarity that you have and evaluating the outcomes of that perspective. The deeper and more granular you get in evaluating probabilities, the more effective and the better your decision-making gets.

[0:38:35.2] AT: Totally. That's a great one.

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[0:40:18.4] MB: Well, the other thing that you mentioned earlier that I think is so important is that most people operate under the illusion that good decisions lead to good outcomes, but the real world is much messier than that. In business and life and investing, there's a huge amount of variance of noise, of sometimes opposite results that separate decision and outcome and it's really hard to get space and actually evaluate whether you made the right decision when you're letting the outcome cloud the evaluation of the decision process.

[0:40:53.8] AT: Yeah. I think people, typically radically in poker and I've noticed this in poker, which has made me reflect on this about life as well, but radically underestimate the role that luck plays. We like to think we're definitely responsible for all of our – everything that all of our successes and those sort of things. I think one thing that poker made me realize is just how lucky we are to even have that. That's something that I think most people just take for granted automatically. It's just like being dealt a winning hand is a prerequisite to succeeding in a lot of ways.

Some people beat the odds and aren't dealt as good of hands as other people. Arguably, they're all winning hands. The way I like to think about it is half the world was dealt a hand where they live on 250 a day or less, right? It’s just not something that anybody chose, that's just your starting two cards. That reality is very hard to rise up out of. Of course, there's some people that do it, but the odds are extremely stacked against you. If you are not part of that 50%, you're dealt a winning hand, you're born in the first-world and you do prosper to start a company and those sorts of things.

The luck preceded that, it gave you the at-bat. Of course, you have to make right decisions along the way and I think playing your hand well is ultimately going to manifest over time. I think we should be more grateful, and I include myself in this, but just be grateful for the incredible luck that has been bestowed on probably everyone listening. Just the fact that you're listening means you've already won.

Then I think people typically evaluate things in a short sample size. I think we typically are impatient, all of us to a large extent are impatient and we want to win in poker. We want to win during our next session. We lose one session, two sessions, three sessions in a row. We're like, “Uh, this sucks. I want to win now.” If you look, you zoom out and you look at things over a large enough sample, if you play your hands well and you make enough good decisions, the better players always win over time.

The thing is that people are evaluating their results in the short-term, in a short time window and in a short time period, anything could happen. Bad players can win. Good players can lose. Even events that happen in our lives can seem bad, if we label them that way when they happened in a short timeframe. Like you for example, get fired from a job. If you evaluate that in a timeframe of a week, you can place the label bad on that event that happened. If you zoom out and you don't know what's going to happen in the future, so it's very hard to label something as bad even if you do zoom out. If you look at your past, certain things that happen that you labeled as bad in the moment, like for example a breakup, probably ended up being good. It will be it painful and at the time, because it might have led you to find your current partner, or your wife and that you now have kids with or whatever, right?

I think we label things too often in the short-term, but ending out and looking at the big picture really helps create some space there and not make those events as painful to deal with. I think those are two other things that poker has made me reflect on really the role of luck and in life as well and that's really just made me a more grateful person.

Part of that was traveling to Southeast Asia when I lived in Macau, I was playing the biggest poker games in the world. We’re in Macau, and so I was living there playing. Traveling to Southeast Asia really made me realize firsthand about the former thing about being dealt a winning hand and just how many people worked. That's really helped me in poker when I feel down on my luck, I try and think about that. That no matter what happens to me at the poker table, I'm still running pretty good.

[0:44:37.2] MB: That's great perspective and a really powerful mental model that you can pull from poker and think about the world at large.

[0:44:47.0] AT: Yeah. I don't want to sound like some saint here. I have shitty days too. I have times when I'm frustrated, or stressed, or just complain about stupid things all the time. I try and again, at least have these systems that I can fall back on, or these theories that I know are true to help me in those tough times, because emotion like we talked about is a powerful force. I try.

[0:45:14.8] MB: Tell me a little bit about your strategy for prioritizing what's important in life.

[0:45:21.6] AT: Well, that's another big question. I have what I call a North Star. I've definitely didn't coined this term, but it's this guiding principle that I think are what is fundamentally important in my life. What are the things that I am going to use to base all my decisions on? What is the currency that I'm really trying to optimize for? For me, it's mainly about freedom, but also excitement and choices. When I think about whether or not I'm going to take on a new project, it could be easy without these defining principles to perhaps say yes for the wrong reasons. Most notably if it takes up an extreme amount of my time for a financial gain, I might be tempted to do it. If I look at what it's going to do in the construct of maybe locking me to a place for four years, I might think twice about it, because I realized that that won't fit into the lifestyle that I ultimately want to live and the things that I value.

I feel this helps in the macro with the big decisions that I make, but also in the micro. Even things like my spending priorities, for example. It's easy to I feel spend in areas that don't serve our highest needs. When I think about where I'm trying to channel a lot of my resources, it's mainly towards things that will give me more freedom. I know that if I am conservative and save, I can buy back my time and I can allocate more money towards things, like travel, which is fills a lot of the freedom element, but also the excitement element in my life.

I try and be cognizant of where things are going to better channel my resources, my time, money towards my highest priority items in life. That's some of the big-picture decision-making process that I go through.

[0:47:16.8] MB: In many ways, the lessons from poker, the decision-making strategies that we've been talking about have helped shape that perspective. It's so easy to get caught up in the minutiae of life and pulled in many different directions and reacting to everything that happens and all of the things that are going on, but it's so critical to come back to the center, to figure out what actually matters, what are your goals, what are your priorities, what's really important to you and not stray too far off that path, because most of us and I include myself in this, can easily get pulled in a million different directions.

If you don't figure out what really matters to you and walk a path towards it and put yourself back on that path every time you fall off, it's really, really easy to get off course.

[0:48:03.9] AT: Yeah. I've tried to like in poker, I always tell my clients and students, like before you make any bets, think about why you're making the bet and what you're trying to accomplish. I've really taken that to the bank when it comes to things that I'm trying to do in my life as well. Before I decide, like I'm writing a poker book for example. I’m in the process of doing it. I'll be done in [inaudible 0:48:27.7]. I really try to think about, like this is a big decision, right? It's going to lock a period of time and I'm going to have to put other projects on the side. I really try to think about how is this going to help me achieve my business goals, or my personal goals and where does this fit into the big picture plan.

I think without that process, it's easy to just let schedule, or time, or your attention be filled up with these almost arbitrary, miscellaneous things, right? It's almost whatever comes at you. You need a process for making these decisions. I think defining what people really want and what their North Star is an important process of it. Then it's about mapping really your actions and ambitions towards that, right? Making sure that the decisions you're making are getting you closer, not drawing you further away.

I see this quite often, where people aren't really matching these two things. For example, I had a lot of friends that say that their North Star is something like traveling often. Then they will do something that completely inhibits that, like spending a lot on a car, or on rent, or buying a dog, or all these things that seemingly make that aim a lot more difficult. They just do it getting caught up in peer pressure, or society, or emotion, or whatever it is. I feel just identifying what it is that's really important and then mapping all of those actions towards that big picture of is this going to help me get more of that, or less of that and is it worth that cost, or that sacrifice is a good starting point.

[0:50:06.9] MB: Great advice. For listeners who have been listening to this conversation, who want to concretely take action or implement something that we've talked about today, to be about prioritization, decision-making, emotions, whatever, what would be one piece of homework, or one action item that you would give them to start concretely taking action on something that we've discussed today?

[0:50:31.2] AT: Oh, man. I guess it just depends on what topic was the most exciting to them and where they found the most – what they’ve resonated the most with. I mean, it could be something as simple as taking up a meditation practice. It's something I would wish I could have told myself two decades ago. Or it could be something like just thinking about making logical decisions, instead of emotional ones, like asking yourself in the third-person what should Alec do in this moment. Should Alec eat this piece of cheesecake, or not? Maybe the answer is yes. It's not like you shouldn't ever do those things, but it's just understand, use that self-awareness to understand is this the right decision and why? Sometimes I do it. Why not?

Another thing could be getting clear about your personal goals. I find that the anchor of this whole thing is finance, right? Money is really a tool that gives you options. I think the best place to start is tracking your spending. One exercise that was extremely eye-opening that I did and I've done this in various countries that I’ve lived in different times of my life is just tracking every single dollar I spend. There's a great quote, I think it's by Peter Drucker, what gets measured gets managed. Actually, might not be by Peter Drucker. [Inaudible 0:51:47.0].

Anyway, that's definitely the quote. It might not be by the person. What gets measured, gets managed. It was really through tabulating every single dollar I spent and then categorizing that spending that I got clear on where every dollar was going. Just the process of doing it makes one more accountable and they'll find that they probably naturally spend less just by being accountable with their spending by writing it down and being forced to look at the spreadsheet at the end of the month, or whatever it is, whatever system you use. That really can help people channel their resources towards things that are more important to them. I think that's a great place to start.

I have worksheets that are free on AlecTorelli.com about how I do this and how I set goals and create an action plan and then map my spending and my daily steps and actions towards achieving those goals. That could be a resource for people that are looking to do that. Yeah, those are some good places to start.

[0:52:41.9] MB: I love that suggestion. Something so small and this idea of just starting with your budget, realigning your resources with what your actual goals are is a great concrete action step to beginning to align your life with what you want it to be.

[0:52:57.1] AT: Yeah. I find that it's going to be people almost in having clients, or people that have given me feedback and myself included when I've done this, there's almost always 20% or so of one's budget that's going towards things that aren't their highest priorities. They could usually cut that out and reallocate that and that could make a huge difference, if that whatever, $2,000 $3,000 a year is going towards, instead of a new iPhone, it's going towards a trip to Asia.

I mean, it could be as simple as that. Just don't upgrade you and your girlfriend's iPhone. Save $2,000 and wait an extra year and go to Asia. It could just be so simple. I mean, it could be more complicated. I mean, there's so many things that I feel are easy wins in the finance category. I would really implore everyone to try that out and there's going to be some eye-opening results there for people.

[0:53:43.3] MB: Alec, for listeners who want to find more of you, your work, your advice, etc., online, where can they do that?

[0:53:50.2] AT: I'm very active on social media, @AlecTorelli everywhere. I have a YouTube that has a lot of poker strategy and some lifestyle content as well. Conscious Poker YouTube, or Alec Torelli. Then AlecTorelli.com for my personal content.

If you want to learn poker strategy, Conscious Poker is my poker training site. You can go to ConsciousPoker.com and there's tons of resources to help people reach that next level in poker. That's a little bit of how to stay in touch. I probably Instagram, I'm pretty active on. Shoot me a DM, say hi and let me know you saw me on Matt's podcast. I'd love to say, hey, I'm very active on there.

[0:54:28.3] MB: Awesome. Well Alec, thank you so much for coming on the show, for sharing all this wisdom. I always enjoy digging into some high stakes poker.

[0:54:35.6] AT: Thanks, Matt. This was awesome. Appreciate you having me.

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