Judging the Book by its Cover

“How many animals of each kind did Moses take into the ark?”

You’ll immediately try to find a number between fifteen and twenty thousand, only to quickly catch yourself thereafter, realizing that it’s a trick, and rightfully concluding that the correct number is two! Two animals of each kind were taken into the ark.

But as you cross your arms and lean back in your chair with a mirthful grin on your face, the inquisitor will look up and tell you that you’re completely wrong.

Moses never made the ark, let alone rode it. It was Noah.

Daniel Kahneman highlights the “Moses illusion” as one of the prime examples of our intuitive System 1 taking over our logical System 2 in jumping to incorrect conclusions. As a matter of fact, familiarity with the Bible – and/or Russel Crowe’s films, for that matter – is completely irrelevant in this case. The number of people who detect what is wrong with this question is extremely small. It’s obviously no surprise, since the sentence’s composition turns your immediate attention to the number of animals, thus taking it away from the human agent shepherding them into the vessel[1].

Ironically enough, when I’ve described the way students are accepted into McMaster University’s medical program, many have relied upon their System 1 and scoffed at the process. When accepting applications, Canada’s top medical school only looks at one fourth of the aspirants’ MCAT scores. They don’t look at their knowledge of biological and biochemical foundations of living systems, nor the chemical and physical foundations of biological systems or the psychological, social and biological foundations of behaviour. They only look at the critical analysis and reasoning skills.

At first glance, it does seem ridiculous. They don’t seem to care about their candidates’ knowledge of the very scientific foundations of their future profession! But take a step back, and read the “Moses illusion” again. Would you rather have doctors who react to the first biological abnormality that jumps out at them, or would you want them to have the discipline to rely upon their System 2, and take a calm, careful look at the whole picture before coming up with a diagnosis?

McMaster University’s approach is far wiser than it seems; a wisdom that can only be uncovered by our System 2.

In his book, Eight Steps to Seven Figures, Charles B. Carlson reveals the common methods that Americans have used to build 7 figure investment portfolios. And what he emphasizes time and time again is that frequent misconceptions – often produced by our System 1 – are what prevent millions of other people from obtaining the same level of financial wealth.

Too many people think that millionaire automatically implies real estate prowess, massive family inheritance, and professional success in the corporate world.

But the majority of these people are middle class citizens: teachers, professors, engineers, and landscapers, etc.; the people you see and meet almost every day. People who aren’t corporate executives, coming from poorer families, owning one home.

Their secret?

Not the amount of money they’ve invested, but the habit of investing that they acquired from very early on. Carlson often writes that what you invest in is not nearly as important as the fact that you’re investing. As long as you’re doing it, it’ll pay off in the long run.

Some of Charles’ examples include people who started investing as teenagers, setting aside 50% of the $2 that they earned per hour. It’s that discipline that would later allow them to set aside the %50 of the $50 they made every hour, leaving them with $3 million in their investment portfolio by the age of 45.

It’s our System 1 that tells us that we need to win the lottery before we start investing.

But if you step back and ignore your immediate impulse, your System 2 tells you that if that’s going to be our strategy, you’ll have to wait for Usain Bolt to show up at your front door before you can start running.

[1] The clever nuance of the sentence was brought to my attention by educational and psychological expert, Rachel O’Brien, MEd, OCT.