Finance Xpress

Editor’s Update: We published this series in 2014. Since then, thousands have worked through the 31-day money challenge, finding great success. Because it’s as relevant today as it was then, we are republishing it this year. We hope it helps you with your finances.

As we begin a new year, it’s a good time to give our finances a makeover. So for the next 31 days, we are going to tackle just about every personal finance and investing topic one needs to get out of debt, start investing, and begin moving closer to financial freedom.

There is a lot planned over the next 31 days. Each day, I will publish a new blog post and podcast. I have a number of great interviews lined up for some of the podcast. Today, for example, I interview Jean Chatzky about financial freedom, including what it means to her, how to achieve it, and what holds most people back.

From there we’ll cover everything from budgeting to the one-and-done method of saving money to intro investing. There will even be a number of podcasts about how to make extra income. In short, I’ll be covering it all.

Here’s what I have planned for the 31-Day Money Challenge:

Day 1: What is Financial Freedom (with Jean Chatzky)

Day 2: How to Set Goals You’ll Actually Achieve

Day 3: How and Why to Prepare a Net Worth Statement

Day 4: 7 Tips to Effective, Stress-free Budgeting

Day 5: The 4 Rules of Budgeting (with Jesse Mecham of YNAB)

Day 6: The One-N-Done Way to Save Serious Money

Day 7: 20 Painless Ways to Save Money

Day 8: 10 Tools to Help You Better Manage Your Money

Day 9: Reader Q&A

Day 10: All About Credit Scores

Day 11: How to Improve Your Credit Score (interview with Maxine Sweet from Experian)

Day 12: How to get out of debt

Day 13: How to Use the Debt Snowball

Day 14: Which Way is Up? (Figuring out how to tackle your debt, emergency fund, and investments)

Day 15: Interview with Carl Richards (author of The Behavior Gap)

Day 16: Why you Should Invest Like a Business Owner

Day 17: How to Invest Like Warren Buffett (with Larry Swedroe)

Day 18: How to Create an Asset Allocation Plan

Day 19: How to Pick Investments that are Right for You

Day 20: How to Become a Retirement Super Saver

Day 21: How and Why to Keep Investing Costs Low

Day 22: A Look at My Investment Portfolio

Day 23: How to Invest in Real Estate [A rags to riches story with Brandon Turner]

Day 24: How to Tell if You Are On Track to Retire

Day 25: Jemstep–An Asset Allocation and Investment Selection Tool

Day 26: All About Term Life Insurance [Interview with Jeff Rose, CFP]

Day 27: How to Make Extra Income on the Side [Interview with Jay Money]

Day 28: How to Start Your Own eCommerce Business [Interview with Steve Chou]

Day 29: Mortgages 101

Day 30: All About Retirement Accounts

Day 31: Listener Q&A

If you haven’t already, subscribe to the Dough Roller podcast to make sure you get each of these shows.

The post The 31-Day Money Challenge appeared first on The Dough Roller.

The great thing about the Financial Samurai community is that most of you are intelligent, hard working, non-delusional people who are willing to put in effort for reward. We could take the easy route and just focus on being super frugal to achieve our financial goals. But I think it’s far more interesting to see if we can grow our net worth to the max!

Did you know that most people give up on their resolutions by Feb 1? Sad! The new year checklist is primarily targeted to those who want or have the freedom to choose their own path. Everybody says they want financial freedom, but only a minority of people are willing to do the things necessary to make throwing away their alarm clock a reality.

I have done every single item on this checklist. I suggest you do the same given the stock market is at a record high, interest rates have moved up, and we have a new political regime in the White House after eight years of Obama. 

NEW YEAR FINANCIAL CHECKLIST

1) Create a pie chart of your income streams. Go to a spreadsheet, create your list of income streams with the various amounts for the year, and hit that pie chart wizard. Does one slice still dominate (50%+)? If so, you should come up with a game plan to reduce the percentage under 50% by GROWING other income streams so that the overall income flow is greater. No income stream lasts forever.

2) Compare year over year growth rates. Once you’ve listed out and totaled all your income streams, compare each line item with the prior year’s figures. Figure out where you’ve been slacking in order to optimize. Also make some realistic forecasts on which line items will fade away. Always be trying to build new streams of income.

3) Focus on your ideal income for maximum happiness. Once you’ve analyzed your income streams, ask yourself whether you’re happy with what you’ve got. Does the effort you’ve put in to create this income stream match the reward. Research shows that $75,000 a year in income is ideal for most of the country. My research concludes that $200,000 – $250,000/person is ideal for the most expensive parts of the country / world.

4) Review your investment portfolio(s). Make sure that your investment portfolio composition aligns with your risk tolerance. Positions can easily shift over the year, and I recommend everybody rebalance twice a year on average. You can easily run your portfolios through Personal Capital’s Investment Checkup tool to see where you might be overweight certain assets. Link up your portfolio(s), click Advisor Tools on the top, and then Investment Checkup to get some recommendations based on your profile.

Below is an example of an investment checkup snapshot. Decide whether you like your current allocation, like their recommended target allocation based on your input of who you are as an investor, and make changes, if any.

5) Review your net worth composition. Your investment portfolio(s) should only be one component of your net worth. Don’t be like most Americans who either have 80%+ of their net worth in stocks or 80%+ of their net worth in real estate. If a downturn comes, you will also be slaughtered like most Americans were during the housing crisis. Check out the Recommended Net Worth Composition By Age for some great charts on what to shoot for.

6) Review and then raise your savings rate. If the amount you are saving each month doesn’t hurt, then you aren’t saving enough. Add up what you’ve saved/invested so far and divide by your YTD gross income. Whatever the percentage I’m sure you can still save more. Make sure you max out your 401k and/or IRA plan. Then try to increase your savings rate by another 10% this year. A 50% savings rate is the magic threshold where you’ll really start to see big changes in your finances. If you can’t get there, work on a side-hustle to make more!

7) Take inventory of all the stuff you’ve bought. This list should not only include clothes, shoes, and toys, but also nonessential spending such as bathroom remodels, international trips, meals where you spent more than $100/person, and so forth. You want to add up and visualize how much you’ve actually spent on things you don’t really need and adjust your spending accordingly.

8) Analyze and reduce your debt. If used properly, debt can supercharge your net worth. If used inappropriately, debt will cause other people to pay for your mistakes. Always compare your debt interest rate to the risk-free rate of return. If your debt costs no more than 100% the risk-free rate of return, you’re in the OK zone so long as you can manage the payments. It’s imperative you pay down all consumer/credit card debt because credit card interest rates average 7X+ the risk-free rate. Never carry revolving credit card debt! Paying down student loans or your mortgage depends on your income, write-off ability, interest rate, and amount. See: Pay Down Debt Or Invest? Implement FS-DAIR

9) Review all your insurance policies. One unfortunate incident could take your financial empire down. It’s important to call and review every single one of your insurance policies: auto, home, life, and umbrella. They are more confusing than you think! Make sure there is no lapse in coverage. Also make sure you are insuring for exactly what you want. Chances are high that you are not. Check out: How Much Life Insurance Do I Really Need?

10) Make sure your credit report is clean. The Federal Trade Commission estimates that 5% of credit reports have errors. That’s bad if you are looking to rent an apartment, apply for credit, apply for a new job, or buy a home. I had an $8 late electric payment on a rental that crushed my credit score by 100+ points for two years and I had no idea. The utility bill was supposed to be paid by my renters and the utility company never contacted me. The credit problem almost derailed my mortgage refinance. You can check your Experian credit score here.

11) Review who or what you neglected. There needs to be a minimum amount of balance in your quest for financial freedom. Working 80 hours a week, never taking a vacation, and forsaking date night with your significant other doesn’t sound very good. Take stock of who or what you neglected over the past 12 months and make them a priority. Always ask yourself your WHY so you don’t get too far off track. Related: The Unhealthy Desire For Prestige Is Ruining Your Life

12) Check to see if your retirement is on track. After you complete an investment checkup, do a retirement health checkup with Personal Capital’s Retirement Planner under the Advisor Tools section. They use your real inputted data to run a Monte Carlo algorithm to estimate whether you will have the desired cash flow to cover all your expenses during your retirement years. Other calculators let you fudge your numbers, which leads to output that can’t be as trusted. Feel free to adjust your expenses as you see fit e.g. $50,000 a year in college expenses starting in 2028.

The Retirement Planner step is the culmination of all your financial efforts so far. Make sure you realize how far you have to go so you can take steps to get there.

Are you on the right retirement path?

FINANCIAL FREEDOM IS AN INEVITABILITY

My favorite Chinese proverb is, “If the direction is correct, sooner or later you will get there.” Once you come up with a game plan and regularly check in on your progress. you will blow away your own expectations!

Happy 2017!

Regards,

Sam

Season 6, Episode 17

On this week’s episode of Freakonomics Radio: we continue last week’s conversation about the economics of sleep. We look at some research suggesting, for instance, that early birds really do get the worm.

And then we look into the tactics — physical, mental, and strategic — of  six-time hot dog-eating champion Takeru Kobayashi, who revolutionized the sport of competitive eating. What can the rest of us can learn from his breakthroughs?

To find out more, check out the podcasts from which this hour was drawn: “The Economics of Sleep, Part 2” and “A Better Way to Eat.”

You can subscribe to the Freakonomics Radio podcast at iTunes or elsewhere, or get the RSS feed.

The post The Economics of Sleep, Part 2 (Rebroadcast) appeared first on Freakonomics.

Think about the last time you received a job offer. Did you compare the pros and cons of accepting the new position? Perhaps you evaluated the differences in compensation, vacation time, and the cost of health care. Did you remember to include the cost of benefits you were leaving behind?

I didn’t…until I made a costly 401(k) mistake.

I left my job on a Wednesday afternoon, after three years and 364 days in that position. If I had just worked through Thursday and hit 4 years of service — a mere 24 hours later — my 401(k) would have been fully vested. I left nearly $3,000 on the table!

When I realized my mistake, months after the fact, it was far too late to make a correction. However, you can avoid making the same mistake and other silly blunders. All you need to do is arm yourself with the facts needed to make an informed decision.

Learn More: How to Maximize Your Employer’s 401(k) Match

Here are five steps you should take before leaving a job with a 401(k):

1.       Calculate the total amount your current employer has contributed to your 401(k)

If your retirement plan offers a matching benefit, it means that your employer contributes money towards your 401(k) account based on specific rules documented in your plan.

Occasionally, employers will contribute a percentage of your salary regardless of whether you contribute yourself. Other plans dictate that an employer match dollar-for-dollar up to a percentage of your salary. Some may match 50 cents on the dollar for the first 3% up to 6% of your salary. The bottom line? Every plan is different.

In order to determine your benefit, you should review your plan document or consult with your benefits department. The total dollar amount contributed by your employers is on your 401(k) statement. If you don’t have a recent copy or an online account, contact your plan’s customer service department or your company’s benefits department for help.

It can be easy to forget, though, when contemplating a new job (especially one that’s drawing you in with a higher salary). The value of matched contributions is a great benefit that should be included when you calculate your salary and employment package.

Learn More: Resigning On Good Terms: How to Leave Your Job Without Burning Bridges

2.       Determine the percentage you are currently vested in your 401k

Next, find out how much of your employer match is vested. Vesting is fancy terminology for the percentage of money you get to keep. Plans often incentivize employees to stay by increasing the amount of guaranteed contributions with longevity of service. The retained value of employer match contributions is dictated by the vesting schedule documented in your benefits plan.

Example Vesting Schedule:

Let’s say you’ve worked at your company for nearly 3 years, and your current 401(k) balance says $30,000. During last the few years, you contributed $20,000 to your 401(k) and your employer has generously matched $10,000.

If you left today, 50% is vested. This means that you would get to keep $5,000 of the money your employer matched, and all $20,000 of the money you contributed. In total, you would retain $25,000 of the $30,000 balance.

You can validate your current vesting percentage on your 401k account statement. However, if you want to obtain the vesting schedule rules, read through your plan documents for details or consult with your benefits department.

The percentage you are vested may not sway your decision to leave a job, but it’s worth knowing how much of the matching contributions you are guaranteed to keep.

3.       Figure out the date when you will cross the next vesting threshold

Use your plan’s vesting schedule to calculate when you will cross into the next threshold.  To do this, you’ll need to know the date you started working.

Building on the example above, consider the following vesting scenarios:

In scenario “A” you leave your job a few days shy of your 3 year anniversary, while in “B” you leave a few days after your 3 year anniversary. By staying just one extra week, you’ve shifted in the 75% vesting threshold. In turn, you’ve increased the amount of money you get to keep by $2,500. I don’t know about you, but that’s worth one more week of my time.

What if you find that you are in a few days or a few weeks from a milestone, like I was? Consider negotiating the start date at your new job, to align with the best scenario possible.

4.       Find out if your 401(k) plan charges maintenance fees

Some plans, particularly small business plans, charge annual management fees. If your current 401(k) is charging you a flat fee for administration, you may want to consider alternative options that don’t have this added expense.

Related: What to do When Your Employer’s Retirement Plan Sucks

You could decide to roll the money to your new company’s plan or to roll the money into an IRA. It’s a good idea to evaluate a variety of factors and consult a specialist before acting.

Fees will be published on your 401(k) statements and in plan documents. Or, consult with your benefits department to help you locate the information.

5.       Determine if you have received the entire match you are owed.

If employers match contributions, they usually deposit their portion right away. However, sometimes your contribution rate exceeds the limit they can match per paycheck. This may happen if you frontload your account at the beginning of the year, or increase your match to catch up towards the end. On an annual basis, you employer will reconcile the difference with a “true up” contribution. Find out whether your employer’s total match has been deposited, or if you need to wait.

Keep in mind that you may be charged a fee to close your 401(k) account. This is important if you think you are entitled to a true up contribution. If so, wait until the contribution is posted before initiating a rollover, transfer or distribution. Otherwise, the true up contribution will re-open your account and you’ll find yourself paying a second closing fee and doing twice the paperwork.

Related: Calculating the Value of a 401(k) Account

Leaving one job for another is a big decision, and shouldn’t be taken lightly. Be sure that you not only factor in your 401(k) and employer match when weighing your options, but determine if you’re leaving before taking advantage of all benefits due to you. If nothing else, learn from my mistake: make sure that you’re not resigning a mere day sooner than you should, leaving thousands of dollars in employer contributions on the table.

I’m still kicking myself in the butt for that one.

The post 5 Things to Know About Your 401k Before Leaving a Job appeared first on The Dough Roller.

Hello! Today, I have a great post from my blogging friend James. James and his wife paid off $62,000 in debt in just 7 months! James helps couples handle and talk about money without fighting at loveandmoneymatters.com. Enjoy his blog post about paying down debt below.

Shortly after we got married, my wife Andrea and I got serious about our finances and paid off all our debt.

This is the story of how we turned a profit on our wedding, combined our finances, and paid off $62,000 of debt in 7 months.

Related:

• How To Live On One Income
• 30+ Ways To Save Thousands Each Month
• 75+ Ways To Make Extra Money

Where’d all the debt come from?

All the debt was mine. I was a dumb young kid and thought I’d always be able to out earn my stupid decisions. Until one day I couldn’t.

Despite a generous 3-year military scholarship at my pricey, private college, I had student loans to pay for:

• my housing (~$12,000 x 4)
• my freshman year’s tuition (~$30,000)
• and a summer study abroad program (~$15,000)

Then shortly before I graduated, USAA, a military-member’s bank, offered me a $25,000 loan at the ridiculously low rate of 2% interest. USAA dubbed it a “Career Starter Loan,” but really it was their clever way of ensuring I’d be a customer for the foreseeable future. I used $15,000 to refinance my study-abroad loan, bought a new laptop, and put the rest in savings.

If you’re keeping count, that pushed my total debt upon graduating college up over $100,000.

So of course I immediately got serious about my finances, did a budget, and started attacking my debt, right?

Nope.

I bought a sports car instead.

I was 22 years old, only 4 months into my Army career, and had racked up over ~$115,000 in debt. All I had to show for it was a fancy diploma, a 3 year old Mazda, and $1,100+/month in debt payments.

My wake up call

As can happen in the military, I got hurt.

I always knew it was a possibility, but never thought it’d happen to me. Ultimately, the Army decided it was best if they “retired” me. Just like that my once promising career was over only two years after it started.

Fortunately for me, the Army is a huge, slow moving bureaucracy and I had some time to prepare for my unexpected new life as a civilian. Unfortunately for me, I got hurt during the financial collapse of 2008 and I was entering one of the worst job markets of my life.

I didn’t know how long I’d be without a reliable income, but I knew I’d still be expected to reliably come up with $1,100/month for debt payments.

I opened an excel file and made my first crude budget, subtracting what I needed to spend each month from what I made each month. Turns out I had more money leftover at the end of the month than I realized. I saved as much of it as I could and set it aside as an emergency fund.

Six months after leaving the Army, and nearly draining my savings, I convinced a Fortune 500 company to put me in charge of a $15M/year operation. Now armed with a decent salary I set aside one month’s worth of expenses as a small emergency fund and attacked my debts with a vengeance.

I finally understood what a hindrance my debts were and I wanted them gone!

If you’d like, check out this article to get the exact tools and tactics I used to attack my debts. Following this plan, I would’ve paid off my remaining ~$80,000 and been totally debt free in 3 years.

There was just something I had to do first.

Will you marry me?

My debt was no secret to Andrea, and to her credit, she didn’t really care. She valued me more than my debt and saw how hard I worked to get through my career crisis and get my act together. In fact, we grew closer through all the craziness.

We’d been together for 5 years at this point and it was time to move our relationship forward. I paid off a couple more debts, kept current on my remaining balances, and used my excess cash each month to save for an engagement ring.

In September 2011 I asked Andrea to marry me, she said yes, and we were married a year later.

In that year, I paid the minimum payments on my remaining debts and we saved all our excess cash to pay for our wedding and honeymoon.

We made sure to stretch our dollars by:

• Booking a daytime wedding, it was a lot cheaper to rent a venue during the day than at night.
• We rented centerpieces (the vases all the flowers went in) instead of buying them. I’m not sure what we would’ve done with 20 identical glass cylinders after the wedding, anyway.
• Made our invitations and programs using kits available from craft stores.
• “Hired” friends and family in the industry we would’ve been willing to hire even if we didn’t know them
• Andrea’s aunt is a seamstress and made all the bridesmaids dresses.
• Our DJ/Pianist was a friend.
• Our Photographer was a friend.

In the end, we had a beautiful wedding, a great honeymoon, and were able to pay for everything in cash. We even had a bit leftover.

Joining forces

After our honeymoon, we moved into a new rental house and started combining our finances. Then once we could see all our money coming into and going out of the same account, we redid our budget.

Andrea and I both earned similar incomes, but now our expenses were much less as a married couple than when we lived on our own. We only had one rent payment, one set of utilities, etc. Since our “married” expenses each month were pretty close to what each of us spent as a single person we had a lot of cash left at the end of the month.

By this point, the debt was down to ~$62,000 and it was time for us to attack it.

Andrea and I both wanted to pay off the debt quickly, but we didn’t agree on how. The main point of contention centered around the money we had leftover from our wedding, wedding gift cash, and some of Andrea’s savings from her years as a responsible person.

Even though Andrea had shown me incredible grace, I still felt ashamed of my debt. I didn’t want it hanging over our heads and was willing to take drastic action to to wipe it out.  

I wanted to throw most of our savings at debt, leaving just enough to act as a small emergency fund. Then once the debt was totally gone, we’d rebuild our savings to its previous level.

That plan would have us out of debt really fast, but was risky as it would leave us with only a small emergency fund for a while. I didn’t love this risky plan, but I was anxious to pay off our debts and was already used to living with only a small emergency fund. Besides, with two incomes I figured the odds of us having a catastrophic emergency were quite small.

Andrea, however, hated that plan.

She wasn’t comfortable with the risk and did not want to drain our savings. Having a big emergency fund gave her a sense of security I’d never experienced before and the idea of only having a small emergency fund freaked her out.

Balancing speed with security was a new concept for us. We viewed risk differently and had to come up with a plan we’d both be happy with. The more we talked about it, though, the less our conversations centered on our finances.

Instead, we focussed more on building the life we wanted.

Debt freedom and a big emergency fund were just some of the ingredients.

We both wanted to travel. We both wanted to give to charity. We both wanted to pursue work we love.

Paying off the debt would give us the freedom to do so.

We never wanted to worry about putting food on the table. We never wanted to wonder how we’d pay our rent. We didn’t ever want to be tied to a job we didn’t like just because we needed the money.

A big emergency fund would help us avoid those things.

Our plan for paying down debt

So here’s what we came up with.

• We agreed to use some savings to pay off a couple of my smaller student loans completely. This still left us with enough of an emergency fund to maintain Andrea’s sense of security.
• We agreed to keep our expenses to less than half of our combined income. We could’ve afforded to rent a fancier house and eat lobster every night, but we chose not to. This way, if one of us lost our jobs we’d still be able to pay rent and keep food on the table. While we were both working, though, we’d use the leftover cash to attack the remaining debt.
• We agreed to stay focussed and pay off all the remaining debt in less than a year. If by our first anniversary we still had some debt we’d tap into our savings to pay off whatever small amount was left.

Assuming everything went according to plan, we’d be debt free with a healthy emergency fund within the first year of our marriage.

FINALLY DEBT FREE!

Everything went according to plan and we’re done paying down debt!

Seven months later we were totally debt free. ~$62,000 paid off and we still had a healthy emergency fund.

Or to put it another way, we paid off ~$115,000 in five years, about a year faster than if we’d not gotten married and I just paid it off myself. I paid off ~$53,000 in 4 years on my own, slowed down my debt attack to get married, and together with my awesome wife wiped out the rest.

Even more important than paying off the debt, Andrea and I learned how to set the course of our lives and take action to get us there. We grew closer as a couple as we faced the challenge of paying off debt. Best of all Andrea and I learned to work together to achieve great things.

Now it’s your turn

Maybe you’ve never talked about hopes and dreams or set goals with your partner.  Or maybe you’ve never even thought about it for yourself. This can be tough and tricky, but I’d like to help you out.

It’s pretty easy to articulate a “what” and a “how” for money and call it a day. Take for example “Let’s pay off our credit card/student loan debt by cutting our expenses.” That’s great and responsible, but boring. Instead, as Andrea and I learned, start with “why” you want to do something.

Think about or ask your partner:

• How would it feel to have an extra $100, $500, or $1,000 leftover at the end of the month?
• How would you approach your career differently if you didn’t have to trade your labor just to pay Sallie Mae or Visa?
• How much fun could you have?
• How generous could you be?
• What new options would you have in your life?

Taking this approach, you’d come up with something like: “I want to take a job for the love of it, give more money to charity, buy that thing I’ve always wanted without feeling guilty, and/or stay home with the kids. So let’s trim our expenses to pay off our debt.”

With a solid “why” like that, the “what” and “how” are just details. You’ll also be much more likely to stick with your goals when, not if, something comes along to distract you.

Pessimism is practical

If you find yourself struggling to come up with a worthy “why” release your inner pessimist. Think about all the things you don’t want in life. Think about what you’re afraid of. Then flip it by stating the opposite.

Take “I’m afraid I’m going to work as a corporate slave forever just to pay off my student loans” and flip it to “I want to pay off these loans so I can afford to work for a non-profit.”

“We’re going to be too broke to travel or have any fun when we get older” flips to become “I want to travel the world with our friends and family, so let’s save up a bunch of money to do so.”

Once you have your “why” figured out, “what” to do with your money and “how” will come more easily.

You’ll be able to withstand temptation and not get distracted by shiny stuff. And by working towards a worthy “why” together with your partner, you’ll learn to talk about money without fighting because you won’t just be talking about money. Instead, you’ll be planning and working towards a better life together.

I hope you and your partner will face the challenge of your finances, decide what you really want for your lives, and work towards your goals together. Aggressively paying off our debts actually brought Andrea and I closer together and deepened our marriage. We learned how to talk about tough subjects, set goals, and work together to achieve them. You and your partner can do the same.

What’s your family’s biggest financial goal? Why is it important to you? Are you currently paying down debt?

The post How My Wife and I Paid Off $62,000 in Debt in 7 Months appeared first on Making Sense Of Cents.

Renting versus buying can be a difficult choice. Still, according to The Wall Street Journal, almost two-thirds of American households own homes. Many more own rental properties or second vacation homes. By contrast, a Gallup Poll found that only one-half of Americans own stocks. Home equity is the foundation of personal wealth in the United States, representing…

Tax Benefits of Real Estate Investment Properties – IRS Rules Explained is a post from the Money Crashers personal finance blog.

      

Sure, practice makes perfect — but how you practice matters even more than how much. (Photo: Harry Engels/Getty Images)

Our latest Freakonomics Radio episode is called “How to Become Great at Just About Anything (Rebroadcast).” (You can subscribe to the podcast at iTunes or elsewhere, get the RSS feed, or listen via the media player above.)

What if the thing we call “talent” is grotesquely overrated? And what if deliberate practice is the secret to excellence? Those are the claims of the research psychologist Anders Ericsson, who has been studying the science of expertise for decades. He tells us everything he’s learned.

Below is a transcript of the episode, modified for your reading pleasure. For more information on the people and ideas in the episode, see the links at the bottom of this post. And you’ll find credits for the music in the episode noted within the transcript.

*      *      *

[MUSIC: Tobias Gebb and Trio West, “Auld Lang Syne” (from Plays Holiday Songs)]

Before we get on with today’s show – an encore presentation of one of our most popular episodes ever, “How to Become Great at Just About Anything” — I’ve got a quick favor to ask. As you may know, Freakonomics Radio is produced by the public-radio station WNYC. And a big part of public-radio funding comes from listener donations. From people like … you! So please go to Freakonomics.com, click the donate button, and do your thing. You can also donate by texting – just send the word “freak” to the number 698-66 and you’ll get sent a link to the donation page. This is, of course, the best time of year to donate. Not only because it’s the season for generosity. Not only because it’s your last chance to qualify for a 2016 charitable-gift tax break. But also because your donation, right now, will be tripled. How’s that? The Tow Foundation, a generous supporter of WNYC, has offered to triple donations to Freakonomics Radio; they’ll contribute up to $50,000. So if you give $100, that’s a $300 donation to our program. And if you want to use up the Tow Foundation’s generosity in one shot, just send us $16,666.67, and that’ll land their $50,000. All you have to do is go to Freakonomics.com, click on donate, or text “freak” to 698-66. We have some great Freakonomics Radio swag to choose from, including Titleist golf balls marked with the Freakonomics Radio logo. Which are good for golfing but also, I’ve discovered, small dogs love to play with them. Probably cats too, but I don’t have any cats. In any case – happy holidays, thanks for your support, and thanks especially for listening to Freakonomics Radio.

[MUSIC: Pat Andrews, “Quirky Get Faster”]

Last week, we offered some advice on how to become more productive.

CHARLES DUHIGG: There’s actually a big difference between being busy and being productive.

Now that you’ve all mastered productivity, we’re moving on to something a bit more ambitious. How to become great at just about anything. Because that’s what you told us you wanted.

[MUSIC: The Sometime Boys, “The Butterfly” (from Ice and Blood)]

SARAH CATE PFISTER: I would really love the ability to become an expert performer.

CHAD HYDRO: I compete in the sport of powerlifting and so if I could better perform in that sport, that would certainly be what I would most like to accomplish.

ELENI GALATA: I would like to improve and excel at presenting my work in front of an audience.

KEN RYAN: I would most like to shoot below 90 for the first time and then build upon that success.

J.R. PATRON: Hi, Stephen and the rest of the Freakonomics team. This is J.R. Patron from Metro Manila, Philippines. I am most definitely want to up my guitar-playing skills. So how do I do it?

How do you do it? How do you attain excellence in anything? Is it all about the genes, the natural-born talent? Or: is there an actual science of expertise?

SUSANNE BARGMANN: So, my name is Susanne Bargmann, and I am a psychologist. And I work as a teacher and a supervisor here in Denmark.

Bargmann lives …

BARGMANN: … a bit north of Copenhagen, which is the capital of Denmark.

Bargmann is 42, married, with two kids. About eight years ago, she and an American colleague were studying what they saw as a lack of progress in their profession.

BARGMANN: And what we can see when we look at the research is that the outcome of psychotherapy hasn’t really improved over the last 40 years. And that had us puzzled. So we started looking in other directions to try and figure out why, or what would make us improve. And then we came across K. Anders Ericsson’s work on deliberate practice.

STEPHEN DUBNER: Hello, Anders?

ANDERS ERICSSON: Hi, Stephen!

DUBNER: How are you?

ERICSSON: I’m doing very well.

And that is K. Anders Ericsson.

ERICSSSON: … and I’m a professor of psychology at Florida State University in Tallahassee, Florida.
Ericsson is the man of the hour on today’s show; we’ll get back to him soon. It was his research on something called deliberate practice that got the Danish psychologist Susanne Bargmann excited.

BARGMANN: I’d been plowing through all the literature on deliberate practice, but it still seems a bit abstract when you read it. It was hard for me to really understand what it felt like so we started talking about how could try this out on ourselves. And after discussing this for a while, we decided if we are going to study the process it needs to be not our work, because we’re too close to our work to be able to see it. So we decided to pick up something else outside of our work and then apply the principles of deliberate practice.

So Bargmann wanted to use deliberate practice to try to improve at something, but something personal, not her profession. What should she do?

BARGMANN: When I was a kid, I had this dream of becoming a famous singer.

Her favorite singer?

BARGMANN: It was Whitney Houston. Oh, she was amazing.

But the dream got deferred, and then …

BARGMANN: Life took over, so instead, I became a psychologist and had a family and had a job.

Now, however, many years later, as part of her job, Bargmann thought that maybe …

BARGMANN: … I should give it a go and see if it was actually possible to improve my singing, improve my voice.

So she got back to it. The first thing to do was record herself to see what she sounded like.

BARGMANN: I started using this karaoke program, and I started singing. And then I started listening, and it was really horrible.  

So did that mean that Susanne Bargmann just didn’t have the tools, or maybe the natural talent, to be good at what she wanted to be good at? Or was there a way to become less horrible? Maybe to become … even … great?

*      *      *

[MUSIC: The Society of Rockets, “Olivia Odyssey” (from Olivia Odyssey)]

The research psychologist Anders Ericsson recently published, along with co-author Robert Pool, a book called Peak: Secrets from the New Science of Expertise.

DUBNER: So, let’s pretend for a moment that I’m skeptical off the bat and I say, “Well, Professor Ericsson, is there a science of expertise? That sounds like a bit of an overreach, perhaps.” How do you respond to that?

ANDERS ERICSSON: Well, I think this is what is exciting here about our work is that, for the first time, we really have been studying in more objective ways, pinpointing what it is that some people are able to do much better than other individuals.

Among the many and diverse expert performers that Ericsson and his colleagues have studied:

ERICSSON: Ballet dancers, gymnasts, and all sorts of athletes, a lot of coaches; we’ve looked at chess experts, surgeons, doctors, teachers, musicians, taxi drivers, recreational activities like golf, and even, there’s some research on scientists.

Let me admit that I’ve been fascinated for years by Ericsson’s research. I was introduced to it by this guy:

STEVE LEVITT: Dubner, how are you doing?

Steve Levitt is my Freakonomics friend and co-author; he is an economist at the University of Chicago.

DUBNER: So, Levitt, I still remember very well the day — it was maybe 10 years ago — when you called me up, and you said you had a great idea for a column that we were writing. You said it was this big, Swedish psychologist that you had met while you were on sabbatical at Stanford, I think. A fellow named Anders Ericsson. What was it about Anders and those conversations you had with him, and his research, that got you so excited?

LEVITT: He was infectious. His ideas and his enthusiasm just set me on fire. It was interesting because he studied topics I hadn’t really thought could be studied, like expertise and learning. The beauty of Anders — he’s really an amazing academic in the sense that he just was so interested in what he did and also so interested in the truth and willing to be challenged. I do remember. I remember I had lunch with him, and I immediately came back and called you on the phone and said, “We’ve got to write about this guy. He’s amazing.”

We did write about him, in a Freakonomics column for The New York Times Magazine. It was called “A Star Is Made.” It became one of the most popular things we ever wrote, I think, because it asked a very basic question: is the thing that we all call talent perhaps grotesquely overrated?

LEVITT: The part that really resonated with me is the idea that absent hard work, no one is really great at anything — because it’s an interesting insight. We’d like to think that Wayne Gretzky or Michael Jordan or Taylor Swift just emerge as savants, but they don’t. If you start with someone with talent, and another person who has no talent, if the person with talent works just as hard as the person without talent, almost for certain they’re going to have a better outcome. So, if our measure is true virtuosity, true expertise, it seems unlikely to me that this populist version of “oh, you don’t have to be good; you just have to try hard,” I think that’s probably a fallacy. But I firmly believe the other direction, which is that: if you don’t try hard, no matter how much talent you have, there’s always going to be someone else who has a similar amount of talent who outworks you, and therefore outperforms you.

ERICSSON: Exactly. 

[MUSIC: Rudy Pusateri, “Hot Springy Bass”]

Here’s Anders Ericsson again.

ERICSSON: We actually find that with the right kind of training, any individual will be able to acquire abilities that were previously viewed as only attainable if you had the right kind of genetic talent.

DUBNER: Would it be fair to say that the kind of overarching thesis of your work is that this thing that we tend to call talent, is in fact more of an accumulation of ability that is caused by what you’ve labeled “deliberate practice”?

ERICSSON: I think that, that is a nice summary here of what we’re finding.

[MUSIC: Wolfgang Amadeus Mozart, “Alla Turca”]

For more than 30 years, Ericsson and his colleagues around the world have studied people who stand out in their field. They’ve conducted lab experiments and interviews; they’ve collected data of every sort, all in service of answering a simple question: when someone is very good at something, how did they get so good? If you can figure that out, the thinking goes, then any of us can use those strategies to also get much better at whatever we’re trying to do. You don’t necessarily need to have been born with a special talent, a special ability. Something like perfect pitch, or absolute pitch — that’s the ability to identify or produce a particular musical note, with no reference point. It’s an incredibly rare ability; roughly one in 10,000 people are thought to have it. And while having perfect pitch doesn’t guarantee that you’ll become a great musician or composer, it can be a big help. Consider one of the most acclaimed composers in history: Wolfgang Amadeus Mozart.

ERICSSON: Mozart is famous for his ability to actually listen to any kind of sound and actually tell you what kind of note that sound corresponded to. That seemed like a magical ability that was linked to his ability to be outstanding in composing and playing music.

But Ericsson has three points to make about Mozart. The first is that perfect pitch does not necessarily seem to be innate; it’s teachable, although it helps to start early. As evidence, Ericsson points to research showing that perfect pitch is much more common in countries like China.

ERICSSON: In those countries where you’re actually speaking tonal languages, where the tone influences the meaning of words, it’s going to be much more frequent.

DUBNER: Meaning people are trained from a very early age to identify pitch, yeah?

ERICSSON: Well, that’s the only way you can identify the meaning of the words, because in Mandarin, the difference between different words is just the difference in their tone. So you actually need to be able to acquire that general ability, and what people have found is that you have a very high degree of individuals who exhibit perfect pitch in those countries. It’s becoming increasingly clear that, that is actually something that any individual, seemingly, with the right kind of training situation, can actually acquire, as long as they get the training early on, basically between four and six.

DUBNER: So, rather than perfect pitch being this incredibly rare innate ability, it is a teachable ability, if you know how to teach it.

ERICSSON: Exactly.

[MUSIC: Wolfgang Amadeus Mozart, “Symphony No 14 K 114”]

A second point about Mozart. Ericsson argues that as great as he was — having nothing to do with perfect pitch — that he wasn’t necessarily born that way; Mozart became Mozart by starting very young and training long and hard. We may think of him today as a freak of nature. But, Ericsson says:

ERICSSON: If you compare the kind of music pieces that Mozart can play at various ages to today’s Suzuki-trained children, he is not exceptional. If anything, he’s relatively average.

Did you catch that? Mozart as a young musician, compared to today’s good young musicians, would be relatively average. How can this be? This relates to the third point about Mozart. For his time, he was excellent. But over time, we humans generally become more excellent. Standards of excellence have risen, often a lot. In the book Peak, Ericsson writes of a more recent musical example: “In the early 1930s Alfred Cortot was one of the best-known classical musicians in the world, and his recordings of Chopin’s ‘24 Études’ were considered the definitive interpretation. Today teachers offer those same performances — sloppy and marred by missed notes — as an example of how not to play Chopin, with critics complaining about Cortot’s careless technique, and any professional pianist is expected to be able to perform the études with far greater technical skill and élan than Cortot. Indeed, Anthony Tommasini, the music critic at the New York Times, once commented that musical ability has increased so much since Cortot’s time that Cortot would probably not be admitted to Juilliard now.”

ERICSSON: We have similar developments in any of the sports. In order to qualify to the Boston Marathon, if you could produce that kind of time, you would be competitive at the early Olympics.

[MUSIC: Judson Lee Music, “Cheesy Race”]

That’s right. In order to just qualify to run the Boston Marathon today, a male in the 18- to 34-year-old group has to have run a 3-hour, 5-minute marathon. That’s only about six minutes slower than the winner of the marathon in the first modern Olympics, in 1896. The current marathon world record? Two hours, two minutes, and fifty-seven seconds. That’s nearly 56 minutes faster than the Olympic gold medalist in 1896. Or consider the improvements in golf, which this year is returning to the Olympics after more than a century. In the 1900 Summer Olympics, the men played two 18-hole rounds; the American golfer Charles Sands won the gold medal with scores of 82 and 85, which, these days, wouldn’t get you on a good high school team in some parts of the country. Yeah, the equipment and ball have changed, a lot. But still: the undeniable fact — whether it’s golf or running the marathon or playing the piano — is that as a species we have improved a lot at just about everything. How? Have we been selectively breeding for talent? Perhaps.

But, that is not what Anders Ericsson thinks is largely responsible. He thinks we’ve gotten so much better primarily because we’ve learned how to learn. And that if you study the people who have learned the best, and if you codify the techniques and strategies that they use, then we can all radically improve. But let me warn you: there’s no magic bullet. Improvement comes only with practice — lots and lots and lots of practice. You may have heard of the “10,000-hour rule”? The idea that you need to practice for 10,000 hours to become great at something? That idea originates from the research of Anders Ericsson and his colleagues. They were studying the most accomplished young musicians at a German academy.

ERICSSON: We found that the average of that elite group was over 10,000 hours by the time they reach 20.

[MUSIC: KP Devlin, “Shampoo Party Zone” (from Occidental Taurus)]

The secrets really boil down to one word: practice. Not just volume of practice — although we’ll get into that later. But the quality and the nature of the practice. There’s “purposeful practice,” for instance.

ERICSSON: Purposeful practice is when you actually pick a target — something that you want to improve — and you find a training activity that would allow you to actually improve that particular aspect. Purposeful practice is very different from playing a tennis game or if you’re playing basketball scrimmages. Because when you’re playing, there’s really no target where you’re actually trying to change something specifically and where you have the opportunity of repeating it and actually refine it so you can assure that you will improve that particular aspect.

And then there’s deliberate practice.

ERICSSON: We think of deliberate practice requiring a teacher that actually has had experience of how to help individuals reach very high levels of performance.

DUBNER: I want to go through one by one the components of deliberate practice and have you explain a little bit more if necessary, or acknowledge why they are important. So you write that “deliberate practice develops skills that other people have already figured out how to do and for which effective training techniques have been established.”

ERICSSON: And I think that’s key.

DUBNER: Which I guess helps us explain why a pianist from 80 or 100 years ago who was considered the gold standard is now considered not very good, because the instruction is built on top of itself to get people better faster, yeah?

ERICSSON: Exactly, and I think the same thing in sports, where new techniques will allow individuals to reach kind of a higher level and practice more effectively than previous generations.

DUBNER: You write that “deliberate practice involves well-defined, specific goals, and often involves improving some aspect of the target performance. It is not aimed at some vague, overall improvement.” Do you think that is a mistake that many people make when they’re trying to, “get better at something?” A “vague, overall improvement”?

ERICSSON: I think that is one of the most important pieces that we’re advocating, because you need feedback in order to be able to tell what kind of adjustments you should be making. If you don’t have a clear criterion here for what it is that you were doing, then it’s unclear how you actually  are going to improve if you get subsequent opportunities to do the same thing. So anytime you can focus your performance on improving one aspect, that is the most effective way of improving performance.

DUBNER: Here’s another component. You write: “Deliberate practice takes place outside one’s comfort zone and requires a student to constantly try things that are just beyond his or her current abilities.” That sounds horrible, first of all. You write, “Further thus it demands near-maximal effort, which is generally not enjoyable.” So you just discouraged everyone from ever wanting to do deliberate practice. But why is that important? Do you want to get out of what’s comfortable because that enables you to try harder in a way that you otherwise can’t?

ERICSSON: Well, I think this has to do with the body. If you’re just doing things that feel comfortable and go out and jog, the body basically won’t change. In order to actually change your aerobic ability, people now know that the only way you can do that is if you practice now at a heart rate that is above 70 percent of your maximal heart rate. So it would be maybe around 140 for a young adult. And you have to do that for about 30 minutes at least two or three times a week. If you practice at a lower intensity, the body will actually not develop this difficult, challenging biochemical situation, which will elicit now genes to create physiological adaptations. 

DUBNER: Let’s say I’m a crummy piano player, and I want to become a good piano player. For something like that, or for something like writing, or for something like selling insurance, what does it mean to get outside of one’s comfort zone and why does that improve my ability to get good?

ERICSSON: Deliberate practice relies on this fact that if you make errors, you’re going to find ways to eliminate those errors. So if you’re not actually stretching yourself outside of what you already can do, you’re probably not engaging in deliberate practice.

*     *     *

BOB FISHER: The thing which really enabled me to do all this was Ericsson’s deliberate-practice model.  

Bob Fisher is a soil-conservation technician for the Natural Resource Conservation Service in Seneca, Kansas. Fisher has a number of world records.

[MUSIC: Pat Andrews, “Basketball Boys”]

FISHER: I currently hold 14.

All the records are in free-throw shooting.

FISHER: The first one is the one-minute record, I hold it with 52 currently; most basketball free throws in one minute by a pair using a limited number of balls; most free throws in two minutes while alternating hands; most free throws in a minute by a pair using two basketballs, most free throws in one minute while alternating hands; most free throws while standing on one leg; most blindfolded free throws in 1 minute; most underhanded free throws in one minute; most basketball free throws in 1 minute by a mixed pair; this one I am proud of: most basketball free throws in one hour, 2371.

Fisher is 58 years old, six feet tall. He’s been playing basketball a long time.

FISHER: In high school, I started as a senior for a very small school and, no accolades, didn’t make any area teams or all-star teams or anything like that, at all. And I never considered going on and playing college ball because, quite frankly, I wasn’t good enough.

So how did he become one of the most accomplished free-throw shooters on the planet? By devising a physics-based approach to shooting, augmented by Anders Ericsson’s gospel of deliberate practice.

FISHER: And what he said was that people who continue to get better never allow themselves to go on automatic pilot; they’re continually breaking down the element they are trying to do and working on pieces and then putting it back together — which is nothing new. But I made a concerted effort to do that, and I think that was a large part, a reason of my success.

And when Anders Ericsson talks about getting out of your comfort zone as a component of deliberate practice, Bob Fisher very much knows what he means.

FISHER: Instead of just practicing, you are focused; you’re engaged; it’s like a rubber band. You are constantly stretching the rubber band, and you don’t want to stretch it to the point that it breaks, but you want it to have continual pressure. In other words, you want to try and do things that you are not able to do at the present time.

This leads to one of the most compelling angles of deliberate practice – the neuroscientific angle. The idea that the brain not only steers our practice, but is also shaped by it.

ERICSSON: I think this is one of the areas where we know the most .

That’s Ericsson again. In Peak, he writes about a fascinating study by Eleanor Maguire, a neuroscientist at University College London. Maguire used MRIs to compare the brain growth of London taxi drivers and London bus drivers.

ERICSSON: In London, taxi drivers have to memorize all the routes in the London area, and this is a process that takes a lot of training, and it basically takes years to master that body of knowledge.

Bus drivers, meanwhile, with a set route, spend a lot less time pushing their brains to master new material.

ERICSSON: And when you compare now these taxi drivers with bus drivers, you find this big difference in their brains. So, the process of encoding and mastering all these maps is associated with a change in the brains.

So, you might have the most experienced bus driver in the world. But experience of that sort – driving the same route over and over and over again – doesn’t seem to lead to growth. Which, if you move the conversation out of transportation and into something like medicine … well, I asked Ericsson about that.

DUBNER: There’s a scary part of your book that is about how many people in many professions, as they do it longer, they get more experienced, and there’s an assumption that they’re getting better and better. But you write that, “Once a person reaches that level of “acceptable performance and automaticity” you write, the additional years of “practice” don’t lead to improvement.” Can you talk for a moment about the value of experience for doctors, let’s say?

ERICSSON: I think this points out that difference between deliberate practice and experience. If you’re just doing the same thing over and over, you’re not going to prepare yourself for dealing with a complicated situation. When we analyze the outcomes of medical procedures, just the mere number of procedures that you completed is not related now to the outcome. It turns out that surgery is a little bit different, because there, you often get very immediate feedback, especially about failures.

DUBNER: But, you’re saying that it could be that a doctor who’s freshly out of medical school might be on some dimensions, at least, maybe some important dimensions, better than a doctor with 20 years experience?

ERICSSON: Well, it’s interesting. When it comes to actually diagnosing heart sounds, when you test people with recordings of heart sounds, it turns out that general practitioners — basically their ability to diagnose decreases as a function of the number of years in their practice. And it sort of makes sense. How would you be able to know basically that you’re making mistakes? Even if you realize that a patient was incorrectly diagnosed, you won’t remember exactly what the heart sound sounded like. And what’s kind of nice is that now they’ve developed courses, so within a weekend of training, where you are trying to diagnose particular heart sounds, you can now get up to a level to when you had graduated from medical school.

DUBNER: Many people listening to this are, I’m sure, familiar with the 10,000-hour rule, which you had a hand in defining. First of all, what is the 10,000-hour rule, if there is such a thing, as you understand it?

ERICSSON: Our research showed, to the surprise of a lot of people, that even the most talented musicians at a music academy in Germany, that they actually had spent more time practicing by themselves than less-accomplished musicians. And we basically found that the average of that elite group was over 10,000 hours by the time they reach 20.

[MUSIC: Judson Lee Music, “Wanna Be Spy”]

Most people who have heard of the 10,000-hour rule, heard of it via the book Outliers, by Malcolm Gladwell. Outliers looked at how extraordinarily accomplished people accomplished what they did.

ERICSSON: Now, right. Gladwell basically thought that was kind of an interesting magical number and suggested that the key here is to reach that 10,000 hours. I think he’s really done something very important, helping people see the necessity of this extended training period before you reach high levels of performance. But I think there’s really nothing magical about 10,000 hours. Just the amount of experience performing may in fact have very limited chances to improve your performance. The key seems to be that deliberate practice, where you’re actually working on improving your own performance — that is the key process, and that’s what you need to try to maximize.

DUBNER: You write that this rule, or the number, really — 10,000, nice, big round number — is “irresistibly appealing.” “Unfortunately,” you write, “this rule, which is the only thing many people today know about the effects of practice, is wrong in several ways.” One example that you give, that Malcolm Gladwell writes about in Outliers that you say looks good on first glance, maybe to a layperson, but falls apart upon inspection, is the Beatles playing all those nights at clubs in Hamburg. Can you talk about why that example doesn’t serve as an example of what you’re talking about deliberate practice representing?

ERICSSON: So to us, the Beatles — and I think a lot of other people agree — what really made them outstanding was their composing of a new type of music. So it wasn’t like they excelled as being exceptional instrumentalists. So if we want to explain here their ability to compose this really important music, deliberate practice should now be linked to activities that allowed them to basically improve their compositional skills and basically get feedback on their compositions. So counting up the number of hours that they performed together wouldn’t really enhance the ability here to write really innovative music.

DUBNER: So the very popularized version of one big piece of your research gets a lot of things wrong, according to you. How much does that bother you?

ERICSSON: Well, the one thing that I’m mostly concerned about is, and I’ve met a lot people who are counting hours that they’re doing something and then assuming here that accumulating enough hours will eventually make them experts. Because I think that is a fundamental, incorrect view that is so different from what we’re proposing — namely, that you intentionally have to increase your performance, and you have to be guided, ideally by a teacher, that would allow you now to incrementally improve. So that idea that people actually think that they’re going to get better when they’re not — that, I find, to be the most troubling.

DUBNER:Have you talked with Malcolm about what you feel he got wrong?

ERICSSON: Have not ever spoken to Malcolm Gladwell. And I think that could have avoided some of his summaries of that work in Outliers, but I never interacted with him.

DUBNER: All right, so if I run into him anytime soon, would you like me to pass along a message of some kind?

ERICSSON: I’m really impressed with his books, and I think that they’ve caught a large audience. And if we were able now to channel that interest in improving yourself by now suggesting how you really need to invest the time to improve your performance — I think that would be terrific. If he doesn’t agree with our analysis here, I think it would be important that he explains why he views that basically it’s not so important exactly what you do, but it’s more important with the hours.

[MUSIC: House of Trees, “I am a Clown”]

MALCOLM GLADWELL: The 10,000-hour stuff that I put in Outliers was really only intended to perform a very specific narrative function — or not narrative function, but argumentative function. 

And that is Malcolm Gladwell.

GLADWELL: To me the point of 10,000 hours is: if it takes that long to be good, you can’t do it by yourself. If you have to play chess for 10 years in order to be a great chess player, then that means that you can’t have a job, or maybe if you have a job it can’t be a job that takes most of your time. It means you can’t come home, do the dishes, mow the lawn, take care of your kids. Someone has to do that stuff for you. That was my argument, that if there’s a kind of incredibly prolonged period that is necessary for the incubation of genius, high-performance, elite status of one sort of another, then that means there always has to be a group of people behind the elite performer making that kind of practice possible. And that’s what I wanted to say.

DUBNER: So there’s a sentence in, I believe, it’s in the chapter called “The 10,000-Hour Rule” in Outliers where you write that “10,000 hours is the magic number of greatness.” I understand that was one sentence within many paragraphs within many chapters that’s trying to prove your larger point, and yet, I’ve heard from a lot of people— and I’m guessing for every one I’ve heard from, you’ve heard 50 — who’ve embarked on these trajectories, where “I want to be a ballerina, a golfer, a whatever, whatever, whatever, and if I can get to 10,000 hours, that will make me great.” So that seems to be a causal relationship. How do you feel about people drawing that conclusion and taking action on it?

GLADWELL: Well, elsewhere in that same chapter, there is a very explicit moment where I say that you also have to have talent. That, what we’re talking about with 10,000 hours is: how long does it take to bring talent to fruition? To take some baseline level of ability and allow it to properly express itself and flourish. Ten thousand hours is meaningless in the absence of that baseline level of ability. I could play music for 20,000 hours. I am not becoming Mozart — never, ever, ever. I can play chess for 50,000 hours, and I am not becoming a grandmaster —ever, ever, ever.

DUBNER: You wrote about the Beatles and how one of the key reasons why they became the Beatles was because of the huge amount of time they spent in Hamburg and playing in clubs. This is distilled best by one sentence in Outliers on page 50: “The Hamburg crucible is one of the things that set the Beatles apart.” So Anders, in his book, Peak, and in the interview, took exception with the Beatles example and I’d be curious to run this scenario past you. So he said, I’ll just quote Anders a bit: “So to us” — he and his fellow researchers – “the Beatles, and I think a lot of people would agree, what made them outstanding was their composing of a new type of music. It wasn’t like they excelled at being exceptional instrumentalists. So if we want to explain here their ability to compose this really important music, deliberate practice should now be linked to activities that allow them to basically improve their compositional skills and basically get new feedback on their composition. So counting up the number of hours they perform together wouldn’t really enhance the ability here to write really innovative music.”

GLADWELL: Oh, I disagree — again, respectfully. I’m understanding I’m disagreeing with someone who knows more about this than me. My sense is that, as someone who is in — here I am about to commit a kind of casual obscenity, but — as someone who is also in the creative business, I think that playing in loud, crowded strip bars for hours on end, starting out with other people’s music covers, and moving slowing to your own music, is an extraordinary way to learn about composition. I know of my own writing, I began as a writer trying to write like William F. Buckley, my childhood hero. And if you read my early writing, it was insanely derivative. All I was doing was looking for models and copying them. Out of years of doing that, emerges my own style. So I would say, to the contrary. When you absorb on a deep level the lessons of your musical elders and betters, in many cases, that’s what makes the next step, the next creative step, possible. I would have a very different interpretation of where creativity comes from than he does. And the other thing I would point out is the Beatles literature predates Ericsson. So, he’s not the first to make arguments about practice. This literature goes back to the ‘60s and ‘70s. So a lot of what I was reading when I was writing that chapter was not Ericsson; it was rather a generation of people in this field that came before him. And they had point out, I think, very, very accurately, that the Beatles experience is really unusual. So people always say, “Well, lots of bands in Liverpool played a lot together.” Actually, they had played together 1,200 times — played live 1,200 times by the time they came to America in 1964. Twelve hundred live performances is a, I’m sorry, absolutely staggering number.

DUBNER: But the idea may be, presumably, that there could have been another group of four guys, even from Liverpool, who went to Hamburg and played for many, many hours — and played as many hours, but never got good. That’s the kind of hair that I think I’m trying to help you and Anders split.  Because I don’t hear as much disagreement as either of you hear, frankly. What I hear is that you’re more focused on the holistic creation of expertise, and he’s focused more on, I guess, what I would call the more technical version, which has to do with deliberate practice and what it is. And it sounds like he’s saying that 10,000 hours of something isn’t necessarily deliberate practice. And you’re saying 10,000 hours of practice isn’t necessarily deliberate practice, but there are things that happen in that process that you can’t get to without the 10,000 hours anyway.

GLADWELL: Yeah, and particularly when the four guys who are playing together 1,200 times under very, very trying circumstances are themselves insanely talented, right? So it’s not four schmoes — it’s, for goodness sake, it’s Lennon, McCartney, and Harrison. (I’m not going to mention Ringo Starr.) Each one of whom individually could have had an extraordinary career as a rock-and-roll musician. We had three of them in the same room for years playing together. So there you have this kind of recipe for something extraordinary.

So this, in the end, is the central puzzle. The talent puzzle – just as puzzling as “which came first, the chicken or the egg?” When we encounter someone who does something extraordinarily well, is it because they are “insanely talented,” as Malcolm Gladwell puts it? Or is it because they had, yes, an adequate measure of baseline ability and then found a way to convert that ability into something extraordinary? And if it’s the latter, can that conversion process be reliably emulated? By people like you and me? By people like the Danish psychologist Susanne Bargmann?

BARGMANN: I decided to pick up singing because it’s something I really loved to do. I practiced at home. But I mean, I would have to negotiate with my kids how much time would they let sing, because it was really not very nice to listen to. At that point, I was really fascinated by Christina Aguilera. So I decided to start recording myself singing a Christina Aguilera song. What my biggest problem in the beginning was, I couldn’t make the, in lack of better words, the big sound that she makes. So she has this amazing big, loud sound when she sings. And that wasn’t part of what my voice could do. I could make a very soft sound, or I could make a really sharp sound. That’s all I was able to do.

Bargmann had by now bought into Anders Ericsson’s deliberate-practice model. Which, she acknowledged, required a certain commitment.

BARGMANN: I decided that if I wanted to be serious about the project, I would need the best coach available. So I went online and then I started searching for the person I thought would be the best coach in Denmark.

The coach she found was initially reluctant to work with her. But Bargmann explained she wasn’t just pursuing a personal dream; she was exploring the science of expertise.

BARGMANN: So that was the start. And then, I committed to practicing an hour a day, because I knew the practice was important.

For a year and a half, Bargmann worked hard, practiced a lot, under the guidance of her coach. She seemed to be making progress, but it was slow.

BARGMANN: I felt that I wasn’t really improving enough because I didn’t get that big sound that I wanted. And my coach would be cheering for me, and he said, “It’s right about the corner. Just continue.” And then I remember it was summer, and suddenly I was singing, and the sound actually came. And in a song, I was able to make the big sound in a song. And that was a huge jump for me and really, really motivating.

Bargmann kept at it, practicing every day, focusing on improvement.

BARGMANN: So the next step was to stand in front of others and sing. And that was tough as well. But it was still a big step to move out of the practice room into performing in front of others and creating music.

Meaning: writing her own songs.

BARGMANN: That I worked on for quite a while.

She started training with other singers.

BARGMANN: And I think in that process I realized that the next step would be to start recording.

This phase was also bumpy, but she worked through it.

BARGMANN: And then I started working with the producer on what is now the music that I’ve released.

That’s right. Susanne Bargmann finally realized her childhood dream, and she released a record.

BARGMANN: It’s just called Sus B, which is my artist name.

In Denmark, she’s gotten a lot of radio play.

BARGMANN: So actually, the reception has been quite phenomenal.

Most of the songs are love songs.

BARGMANN: I don’t know why all good music is about love. And then there’s one song that more embodies the whole project of having the courage to start releasing music. It’s called “Fall Up,” where the message is more, “If you have something that you dream about, then do it, don’t hesitate.”

Bargmann wants her accomplishment to inspire others.

BARGMANN: I really believe that it can inspire people to: instead of limiting themselves to what they think they can, to actually choose something they dream of or they have a passion for, and then experience how they can improve.

[MUSIC: Jessie Torrisi, “Cannonball” (from Shake a Little Harder)]

Coming up next week on Freakonomics Radio – we’re back with a brand-new episode. It’s a great conversation with Michael Lewis, the author of great non-fiction books that often get turned into great non-fiction movies, including The Big Short, Moneyball, and The Blind Side. His latest book, though, this one is special – at least for me, and probably for a lot of you too. It’s an unbelievably vibrant portrait of Danny Kahneman and Amos Tversky, the two Israeli psychologists whose amazingly creative research led to the field of behavioral economics.

MICHAEL LEWIS: One of their great discoveries is that people don’t make clean, clear choices between things.

We talk about their research – and how Michael Lewis writes his books …

LEWIS: I write with headphones on that just plays on a loop the same playlist that I’ve built for whatever book I’m writing. And apparently I’m sitting there laughing the whole time.
Michael Lewis on Kahneman and Tversky – that’s next time, on Freakonomics Radio.

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Freakonomics Radio is produced by WNYC Studios and Dubner Productions. Today’s episode was produced by Greg Rosalsky. Our staff includes Shelley Lewis, Jay Cowit, Merritt Jacob, Christopher Werth, Alison Hockenberry, Emma Morgenstern, Harry Huggins and Brian Gutierrez. If you want more Freakonomics Radio, you can also find us on Twitter and Facebook and don’t forget to subscribe to this podcast on iTunes or wherever else you get your free, weekly podcasts.

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