How to win an argument

financial independence
What does this guy know about financial independence anyway??

I’m going to let you in on a secret.

You win an argument the same way you win a nuclear war: by avoiding one.

Disagreement is ever-present in life.  The trick is stopping disagreement from turning into an argument.

Like saving money, investing better or losing weight, avoiding arguments is simple but not always easy.

These skills rely on using our Slow thinking system rather than our Fast emotional response system (see book Thinking Fast and Slow).

To illustrate these 2 systems*, I’m going to put a glass box containing a cobra snake on the table in front of you.  Lean forward and concentrate on the snake.

financial independence

If it rears up hissing, you will jump back. That’s because your F (fast) system is keeping you safe.  The instant your brain perceived the snake was moving, a signal was sent on 2 different paths – imagine a low road and a high road.

The low road is part of the F system and sends the information straight to the amygdala (the part of the brain for fear and risk) which reacts quickly and forces your body to jump backwards.

The signal also takes the high road on a long loop via the S (Slow) system to your prefrontal cortex which processes the information to rationally assess the threat. It takes into account the secure glass box.  But by the time your S system sounds the all clear, you have already jumped back.

To avoid arguments, we need to use this Slow system a bit more (and the Fast system a bit less).  This is like training a muscle, it takes time and the only way to get better is to do the reps.

In my earlier years at work, I was often naïve and a bit of a slow learner.  I wondered why there was always so much conflict. Then, after a few years working in corporate finance, I had a lightbulb moment.

I realised that conflict was inevitable at work.  It might be conflict with counter-parties to a deal, it might be with clients, it might be with colleagues. But conflict is inevitable because our wants are endless yet resources are often finite.

After I realised this, work got a bit easier.  Not because conflict stopped : it didn’t.  Nor because I was particularly good at dealing with conflict : I wasn’t.  But when conflict arose, I stopped trying to allocate blame for it and tried to focus on resolving it.

Why is this relevant to financial independence? Because, one way or another, all your income comes from other people.  It comes from bosses, customers, clients, colleagues, employees, contacts and friends. The better you can deal with other people, the better your chances of increasing your income.

Yes, frugality is important. It’s important not to waste money. But you can’t just penny pinch your way to riches. At the risk of stating the obvious, the higher your income, the easier it is to get your savings rate up above 50%.

So it helps to be good at recognising other people’s point of view.  Let’s look at 2 broad types of conflict resolution:

1) Gladiators

Think of an adversarial contest between 2 gladiators.  Conflict is not an unfortunate side effect, it’s the whole point of the exercise.  It’s a zero sum game where a contestant can only win if the other loses.

No agreement is required between the parties. The contest is either decided by one of the gladiators killing the other one or by some judging mechanism (e.g. the Emperor or the crowd).

Other examples include:

  • Boxing, duels, martial arts
  • Criminal trials
  • Rap battles
  • Academic debates
  • The Monty Python argument clinic

This type of situation is rare in normal life and yet it’s the default frame that many people have when it comes to disagreement.  But unless you are actually a gladiator, its probably best to give this approach a miss.

2) Negotiators

All other types of disagreement are about two or more people with differing interests trying to get to a mutually acceptable outcome.  Both sides have to agree to the deal for it to work.

These are positive sum games. In other words, the right deal can create additional value and synergy where 2+2 = 5.

This is the situation that most of us often find ourselves in. Examples relevant to financial independence include:

Sometimes the distinction is not clear.  Blog comments can range from constructive additions that advance the sum of human knowledge at one end of the spectrum to internet troll-fuckery at the other.  Politics spans both categories.  Political debates in front of a crowd or TV audience are gladiatorial.  But private discussions about coalitions are negotiations.

Gladiators provide entertainment but if we want to achieve financial independence, we are more interested in negotiations and how to get better at these.

I recently read Dale Carnegie’s classic book How to Win Friends and Influence People.  It’s interesting that it took me so long to get round to reading this.  After all, I have long known that Warren Buffett credits Carnegie’s coaching with his people skills and easy going charm.  God knows, I could have done with some of that myself when I was younger.

I could say that I was always too busy to have read it before. But then I always seemed to find plenty of time to watch shit on TV, so who am I trying to fool?

I found time to read all Buffett’s letters to Berkshire Hathaway shareholders and his lengthy biography The Snowball years ago. Yet I was always a bit suspicious of the title of How to Win etc and the idea that I might need help in that department.  Surely reading a book like that would be like admitting that you need help making friends. Which is tantamount to admitting that you are a social leper.

I’m glad I finally read the book though.  In it, Carnegie makes the point that most arguments end with each of the participants more firmly convinced than ever that they are absolutely right. So you can win in a negotiation but you can’t win an argument.

If you lose an argument, you lose. And if you win it, you lose it because the other person feels inferior and will resent your triumph. In ongoing relationships, this is a disaster because they will make a mental note to get you back next time.  In a world where co-operation can make lots of cakes, we need to focus a bit more on baking and a bit less on how the existing cake gets cut up.

The book contains a great checklist for how to deal with disagreement:

Welcome the disagreement

If handled correctly, disagreement can strengthen your case. If there is some point you haven’t thought about before, be thankful if it is brought to your attention. Perhaps this is your opportunity to be corrected before you make a serious mistake.

Distrust your first instinctive impression

Our first natural reaction in a disagreement situation is to be defensive.  Be careful. Keep calm and watch out for your first reaction. It may be you at your worst, not your best.

Control your temper

Remember, you can measure the size of a person by what makes him or her angry.

Listen first

Give your opponents a chance to talk.  Let them finish. Do not resist, defend or debate. This only raises barriers. Try to build bridges of understanding.

Look for areas of agreement

When you have heard your opponents out, dwell first on the points and areas on which you agree.

Be honest

Look for areas where you can admit error and say so. Apologise for your mistakes. It will help disarm your opponents and reduce defensiveness.

Promise to think over your opponents’ ideas and study them carefully

And mean it. Your opponents may be right. It is a lot easier at this stage to agree to think about their points than to move rapidly ahead and find yourself in a position where your opponents can say: “We tried to tell you, but you wouldn’t listen”

Thank your opponents sincerely for their interest

Anyone who takes the time to disagree with you is interested in the same things you are. Think of them as people who really want to help you, and you may turn your opponents into friends.

Postpone action to give both sides time to think through the problem

Suggest that a new meeting be held later that day or the next day, when all facts may be brought to bear. In preparation for this meeting, ask yourself some hard questions: could my opponents be right? Partly right? Is there some truth or merit in their position or argument? Is my reaction one that will relieve the problem, or will it just relieve any frustration? Will my reaction drive my opponents further away or draw them closer to me?

This leads to Carnegie’s next point which is that one of the surest ways to create an argument is to tell people that they are Wrong.  Phew! It’s a good job The Escape Artist has never fallen into that trap! 😉

One of the great things about learning to be a better investor is that it teaches you humility.  I’ve come to accept that I’ll usually be wrong about some of the shares in my portfolio.  The good news is that you don’t need to always be right to make a lot of money.

If your first reaction is to distrust anything that sounds like self help or positive thinking bullshit, I get that. Perhaps that’s why I avoided reading Carnegie’s book for many years?

But ask yourself why Warren Buffett described Dale Carnegie’s coaching as “life changing” for him.  Is it possible that Warren Buffett knows a trick or two that you don’t?

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  1. SuffolkShandy · · Reply

    Sage advice as always, I’ll be visiting the library shortly to borrow Mr Carnegie.

  2. Interesting. I’m not usually a believer in these self help type theories as they’re too American and against my emotionally inept British personality. Instead I try to trust [my version of] common sense. That said I’ve recently been mediating a rather spectacular family dispute/crisis and have been dishing out a lot of advice to a couple of close family members. Of the above checklist I’ve referred to all of the above checklist extensively apart from:

    -Welcome the disagreement
    -Thank your opponents sincerely for their interest

    I’m also in the process of trying to negotiate/position myself for a pay rise. I’ll try and pay more attention to this list and report back!

  3. Bobbyo · · Reply

    You know what TEA I think your posts are getting better and better. Time for your own book soon I reckon

  4. Survivor · · Reply

    Hey ……this really is a wonderful & fascinating topic, hugely directly relevant to our happiness too. You did it justice s usual, I particularly like your ability to nicely balance intellectual curiousity with the link to it’s practical importance in our everyday lives.

    My take on the subject – which is basically how successful we are at interacting with other members of our own species & therefore crucial to our survival – is that it’s importance should be obviously paramount, yet this is almost unrecognised. Poor skills at this which are the norm for most people cause untold misery from the loneliness of people ending up isolated, to outright civil wars forcing millions to disperse in desperation to every corner of the planet, chaos rippling outwards.

    I read that book ~5 years ago, also for the first time, because I had gotten to the point where it was pretty clear I was not doing well in my life in most ways, so my style of communication had to be involved. I actually see the advice in the book more as a philosophical code on how to live & interact best with others so as to achieve at least peace if not happiness … not unlike buddhist or confucianist teachings. [which is why a lot of people don’t regard them as religions per se]

    Being successful as you say is nigh impossible if you can’t communicate well with others & that is an incredibly underrated skill in everyday life, which is strange because if you think about it, it is recognised that diplomacy alone can even stop wars. It has certainly changed my life – at the root of most arguments are a clash of egos, the need to be right for example & about two thirds of arguements in established, &/or even healthy relationships, [like with a spouse for example] are unsolvable because they’re circular arguements.

    In psychology, that is known as where the positions are opposed & the opponents involved just don’t have the same beliefs, so will never agree as long as that doesn’t change – as such, it’s unwinnable & an inevitable waste of time for all parties to the conflict. In a civilised disagreement, [I prefer the definition ‘discussion with disagreement’, because arguement sounds aggressive & that’s not not necessarily the case] it can be resolved if the problem was actually a misunderstanding due to poor communication rather than fundamentally different beliefs in life.

    I now always walk away from circular arguements once I realise that that’s what it is, & when the inner 4-year old [just ego again, but weirdly so hard to resist though] in all of us is fired up & wants to shove back, I find it helpful [in forcing myself to bale out] to remember the wisdom of an ancient Greek philosopher that translates roughly as:-

    ”If a donkey kicks you & you allow yourself to kick back, then you are both donkeys” 🙂

  5. I’ve avoided reading ‘how to win friends’ for much the same reasons as you and UTMT but you have me convinced with this article. Even the excerpt above is enough to show the value of the book. Like you I work in corporate finance so conflict is pretty much an everyday occurrence 😉 I’m gonna escape the camp for good in a few short months and in doing so I’ll be putting your advice to good use – I’ll win the argument by avoiding them.

  6. I bought ‘How to Win Friends’ as you mentioned it, and I’ve got to say it’s a lot more readable than I expected. I’ve only read a couple of chapters so far but it’s given me some simple ideas to practise and made me reflect on my behaviour towards others somewhat.

    Whether it actually improves my career or not will remain to be seen, but I’m pretty convinced I’ll come across as a nicer person which will undoubtedly improve my self-esteem. I suspect that will help with my work, as safety is an area where coming across as an uncompromising stickler for the rules is guaranteed to get people’s back up…

    1. Great to hear this feedback, thanks. Its interesting you mention safety…there is an example in the book of a safety inspector who used the techniques to get better results at work…higher compliance whilst becoming more popular…

      1. I’ve not noticed that example yet – I’ll make sure to look out for it!

        A little off-topic: I’ve found so far that people are far less resistant if you appreciate their efforts and they understand why they need to do something. Also, conversely, if they feel comfortable sharing their grievances with procedure and it can be improved with their help then they feel like they matter too. I’m not talking about this from a ‘gaming them’ POV, but actually making things better and easier if possible to encourage participation.

        It’s funny, this is my favourite finance blog as I feel your attitude to life is similar to mine. Work smarter not harder! Lots of info out there regarding the theory behind FI but it’s nice to find someone who fills in the gaps in how to integrate this lifestyle into something more normal. I could never do the whole ERE thing however much I wanted to, but your blog makes me feel how I’m going about it is OK. So, thanks!

  7. Yep, echo what yourself and others have said about this book despite hearing about it years ago.

    I think I need to read it as though I try hard I know I can come across as a cantankerous old git sometimes, especially at work (when I think people are wrong).

    One thing that strikes me though is that this is kind of at odds with the whole “radical honesty” policy, which I also really like. I guess some combination of the two approaches is probably best.

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