Tom Bilyeu: How I Make Every Major Decision — My Framework for How to Think Clearly in a World That Lies to You

ALL NEW!! Welcome back to Impact Theory with Tom Bilyeu. In this solo deep dive, I break down the single mental model that changed everything for me—not just in business, but in every aspect of life, from marriage and health to navigating the chaos of global events. I take you behind the scenes of my own transformation, sharing how I went from obsessing over personal success to tackling the most complex, high-stakes challenges facing us all—like finance, politics, AI, and global conflict. This episode is about more than self-help platitudes; it’s a blueprint for critical thinking and error correction in a world where spin, manipulation, and “expert” opinion too often derail our judgment. I reveal what I call “The Physics of Progress,” my five-step algorithm for truth-seeking, making better decisions, and not getting wrecked by your own biology, ego, or emotions. I break down why most people run on autopilot with inherited beliefs, the hidden power of incentives, and why AI could either be our greatest tool or our undoing. SHOWNOTES 00:00 – The trap of feeling right versus being right: why error correction matters 01:10 – Evolving beyond “spiritual entertainment”—tackling real-world complexity 02:34 – My five-part algorithm for navigating life’s biggest challenges 04:04 – Hitting rock bottom and the brain plasticity breakthrough 05:08 – Why your frame of reference is a lie—and how to spot it 08:44 – First principles thinking, with real-world and historical examples 10:43 – Biology as destiny: how incentives and chemicals drive our choices 11:48 – The AI revolution: tool or manipulator? 13:14 – “Follow the incentives” to understand politics, business, and yourself 15:30 – How bad incentives led to the Boeing 737 Max tragedy 15:57 – The power of seeking disconfirming evidence and running experiments 17:21 – Why this channel covers everything from China to inflation to Cold War 2.0 18:14 – Progress over dogma: keeping your mental model updated 18:41 – Final challenge: Build something legendary together CHECK OUT OUR SPONSORS Vital Proteins: Get 20% off by going to https://www.vitalproteins.com and entering promo code IMPACT at check out Monarch Money: Use code THEORY at https://monarchmoney.com for 50% off your first year! Shopify: Sign up for your one-dollar-per-month trial period at https://shopify.com/impact Netsuite: Download the CFO’s Guide to AI and Machine Learning at https://NetSuite.com/THEORY https://netsuite.com/THEORY iTrust Capital: Use code IMPACTGO when you sign up and fund your account to get a $100 bonus at https://www.itrustcapital.com/tombilyeu Mint Mobile: If you like your money, Mint Mobile is for you. Shop plans at https://mintmobile.com/impact. https://mintmobile.com/impact DISCLAIMER: Upfront payment of $45 for 3-month 5 gigabyte plan required (equivalent to $15/mo.). New customer offer for first 3 months only, then full-price plan options available. Taxes & fees extra. See MINT MOBILE for details. What's up, everybody? It's Tom Bilyeu here: If you want my help... STARTING a business:join me here at ZERO TO FOUNDER https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show SCALING a business:see if you qualify here. https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/ ********************************************************************** If you're serious about leveling up your life, I urge you to check out my new podcast,Tom Bilyeu’s Mindset Playbook https://open.spotify.com/show/47VE90Cittmo6TGGFqg2xf —a goldmine of my most impactful episodes on mindset, business, and health. Trust me, your future self will thank you. ********************************************************************** LISTEN TO IMPACT THEORY AD FREE + BONUS EPISODES on APPLE PODCASTS:apple.co/impacttheory http://apple.co/impacttheory ********************************************************************** FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu Learn more about your ad choices. Visit megaphone.fm/adchoices https://megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tom Bilyeu?

  Let's talk about the moment your side hustle becomes a real business. Now, I see way too many founders stay stuck running their business like it's a hobby, and then they wonder why nothing ever feels real. It doesn't feel real because it's not. I've helped thousands of entrepreneurs build real businesses through Impact Theory University, and the first step in the path to building a legit business is registering it. And Taylor Brands will help you do just that in a few clicks. An LLC, a limited liability company, is an official business structure. It's inexpensive to form and very simple to maintain. It's how you open a business bank account. It's how customers know they're dealing with a real company. And Taylor Brands doesn't stop at the filing.

• 0:45Tom Bilyeu?

  Their dashboard tracks what comes next based on what your business actually needs. So EIN number, registered agent, licenses and permits, bookkeeping, business banking. I tell every founder the same thing. Just make it official. Click the link in the show notes to check out Taylor Brands and get started on your business today. This is a paid advertisement. This is how people lose everything. They mistake feeling right for actually being right. If you don't have a mental model for built-in error correction, your life is going to be a mess and you won't even know what's going wrong. When I was young, I was obsessed with getting rich. Once I got rich, I became obsessed with formalizing the approach I used so I could apply it to every area of my life. And I realized three things early on.

• 1:30Tom Bilyeu?

  One, striving to be right is a trap, but finding the right answer to a problem is a must. Two, humans are way more likely to do what feels right versus what actually works. Three, to succeed, one must have an error correction model that overcomes ego and emotion. I named the process that I came up with for dealing with these three fundamental laws of human nature, the physics of progress. Work for everything, my businesses, my marriage, my health, my physique, everything. But over the years, I've realized a mental model isn't very useful if it's only about personal success. That's why my YouTube channel has evolved so much over the years, focusing only on personal development. My channel risks being Becoming spiritual entertainment, something that makes people feel good while they watch,

• 2:13Tom Bilyeu?

  but ultimately shies away from taking on the most difficult problems we all face. When COVID hit, I realized that I didn't understand how the world actually works. So I started running the above process on the most important, most complex issues of our time to see if I could gain an advantage by understanding things like finance, the economy, politics, world affairs, future tech, and the other topics that I now cover. Plenty of people told me that I should stay in my lane and stick to business and mindset, and I'm sure there are plenty of people that will tell all of us to just listen to the experts. People have appointed themselves experts who are not experts. But thinking for yourself is the only way to not be manipulated and led down a path to hell with or without good intentions.

• 2:58Tom Bilyeu?

  We are living in arguably the most transformational time in human history. We're nuclear armed, politically divided, able to bring entire species back from the dead, and AI is racing towards becoming a god. Things are changing so fast, it's dizzying. And whether we're talking about politics, economics, global conflict, or artificial intelligence, we are constantly being spun, lied to, and manipulated. And if you don't have a model for truth-seeking and error correction, you will get wrecked. Most of the time, you won't even realize it's happening. So I began to evolve my thinking and my channel along with me using a simple algorithm for approaching the complexities of life at this moment. The algorithm has five parts.

• 3:41Tom Bilyeu?

  One, recognize you're trapped in a distorted frame of reference, and the only way out is to run experiments and think from first principles. Two, map out cause and effect. Three, seek disconfirming evidence and take in information from a wide variety of sources. Four, judge the correctness of something by the results it delivers. Five, remember you're having a biological experience. We all might be divine creatures, but we are still an easy-to-manipulate chemical processing plant. All right, that's the framework. It allows me to set aside my ego and emotions and run the scientific Method recontextualized for life and business. Whenever I'm struggling with something new.

• 4:25Tom Bilyeu?

  It's never going to guarantee that I'm immediately right about something, but it stops me from getting stuck in a fail state. Because I'm not focused on being right. I always have a way to correct my thinking based on results. Let me walk you through why I believe your life will be better if you adopt the same algorithm. The results speak for themselves. I believe all persistently successful people use some variant of this algorithm. Early in life, I was lazy. No one thought I was going to be successful, not my mom, not my best friend, and certainly not my now father-in-law. And to be honest, they were right to doubt me. At one point in my twenties, I was laying in bed four to five hours a day, every day.

• 5:06Tom Bilyeu?

  I was terrified of discovering that I wasn't capable of winning. I thought success was about talent, and I was worried that if I actually tried and failed, I'd have to accept that failure was my destiny. Then I hit rock bottom. No money, no direction, no self-belief. And I was ashamed that I wasn't becoming the man I promised my fiancee I would become. But then I had a single thought that changed my life. Maybe I'm not permanently stuck. Maybe I'm temporarily stuck because I'm wrong about how humans work. The idea that I latched on to was brain plasticity, that people can learn and get better at any age. That's when I stopped worrying about whether I was talented or already right,

• 5:49Tom Bilyeu?

  and I focused on getting better, just a little bit every day. The compounding effects of that decision improve my life across every metric a thousandfold. It's also how I limit my susceptibility to spin and manipulation. Now, I haven't found it's possible to completely eliminate the effect of spin and lies, but learning to think critically and not be trapped by others or my own past thinking has been life-changing. Here's how it works in five easy parts. Do not skip part four, as that is the most important. All right, part one. Your frame of reference is a lie. Like a fish lives in water and never questions it, you live inside of a frame of reference and never question it. Your frame of reference comes from Three things. One, your biology. We're all different.

• 6:34Tom Bilyeu?

  We have innate personalities. Some things about us will truly never change. Two, your beliefs. Three, your values. Every human being is born into a specific time and place, and that alone is going to wildly influence your frame of reference. This is why each generation acts differently than those that came before or after them. Your frame of reference is not accurate. Your beliefs aren't accurate. Your values aren't accurate, but they are yours, and they distort everything you see. This is why people can look at the same thing and walk away with two completely different sets of facts. Much of our frame of reference is inherited. You obviously inherit your biology, but you also inherit your beliefs and your values

• 7:20Tom Bilyeu?

  from your parents, from your school, from the culture around you, what you watch, play, listen to, your traumas, the cultural events happening around you. They all shape how you see the world in profound ways. And no time period will ever shape you more than your childhood. This is just a fact of how the brain develops. Few people realize that their frame of reference isn't the truth. It's just programming. We never question our frame of reference because it feels so true. It feels right. It feels like we're simply acknowledging objective fact. And as I stated earlier, it is a law of human nature that we do what feels right far faster than we do what works. To quickly define what I mean by works, I will simply say works means to do what leads you towards fulfillment.

• 8:05Tom Bilyeu?

  And fulfillment is anything that you love doing that uplifts you and those around you. Now, look, that's simplified, but it should ensure that you can track what I'm getting at. If you wanted to change your frame of reference, you could, but it's hard, and most people will never do it. That's because changing your frame of reference requires you to take control of your biology, to the extent that you can, and to edit your beliefs and values. But given that most people confuse their frame of reference with truth and rightness, even if they knew they could change their frame of reference, they wouldn't want to. Also, life is extremely complicated. We need shortcuts so that we don't have to think through every Again, every time we come across it. You've likely developed a method already for dealing with jerks at work. Getting cut off, filing your taxes on time, paying your bills, stubbing your toe.

• 8:50Tom Bilyeu?

  Look, all of those things are a pain, but you don't hem and haw endlessly trying to figure out what to do. Similarly, you've got a take on whether God exists. If it's a sin to have sex outside of wedlock, the best way to spend money. Whether dogs or cats are better, and the perfect place to go on vacation. Even if I could scientifically prove that cats are better than dogs, I know some people just aren't gonna make the switch. I know I'm not. Cats are a menace. It doesn't matter what is true. It matters how it feels and if you've locked in your answer already or not. So what do you do? You live out a worldview that was given to you by people who didn't design it intentionally and who probably aren't even winning. At least that's what most people do. But it is a trap. And the only way out is thinking from first principles.

• 9:34Tom Bilyeu?

  You stop asking, "What do people say about this?", and you start asking, "What is actually true?", from a cause and effect level. What's functionally effective in the real world? That's how I try to think. Let me show you what this looks like in the real world. Take Trump's trade war with China. On the surface, to some, it looked like a bold economic play. To others, it looked like mass chaos from a maniac. But underneath, it was a battle of assumptions about supply chains, domestic manufacturing, and geopolitical leverage. If you assumed that the US could decouple cleanly from China without pressure or backlash, you weren't thinking from first principles. You were running someone else's narrative, as we all often do. Or you could look at Trump's immigration policy. Whether you loved it or hated it,

• 10:18Tom Bilyeu?

  the deeper question that we should be focusing on is what problem are we trying to solve? And what are the long-term, second- and third-order consequences of the proposed solution? If you're reacting based on your tribe, left or right, you're not solving a problem, you're going to bat for a team. You're signaling, and signaling isn't gonna get us through the next 20 years of systemic pressure. Let me give you guys a historical example of what happens when you don't focus on solving problems based on what's actually happening. Napoleon, one of the greatest military minds of all Conqueror of Europe, inventor of modern warfare. But when he invaded Russia in 1812, he brought summer uniforms, no winter plan. He assumed the campaign would be over in a few weeks, as so many of his previous campaigns were.

• 11:03Tom Bilyeu?

  But this one wasn't. Temperatures dropped to negative 30 degrees Fahrenheit. Horses froze standing up. The French army didn't lose to Russia. They lost to bad assumptions. They lost to tribal thinking. They lost to not pushing back. Napoleon failed to update his frame of reference and 400,000 of his soldiers paid the price. We are all at risk of similarly catastrophic blind spots. Biology is ultimately our bottleneck. Here's something most people never account for. You are not a mind floating in a void. You are a biological organism shaped by chemicals, hormones, instincts, fear, and a whole lot more. And that matters. Your brain didn't evolve to make you happy.

• 11:47Tom Bilyeu?

  It evolved to keep you alive long enough to have kids that have kids. That's it. You crave status because it kept you in the tribe. You fear change because unfamiliar things used to kill us. You take things personally because it helped you detect threats and stay in good standing within the group. And this is why I say, we all might be divine, but we are still chemical processing plants. You are being steered by systems that we often don't see or acknowledge. And that's why AI is such a game changer. Artificial intelligence is going to reshape every aspect of society. Job markets, political campaigns, even war. But most importantly, AI-driven algorithms will guide your attention and your emotions

• 12:31Tom Bilyeu?

  because it certainly understands your biology. And it's going to manipulate you with hyper-precision by learning from biofeedback generated from your wearables. There will effectively be no aspect of your life that isn't influenced by something on the outside. And if you don't learn now to think for yourself, to challenge assumptions, you will be controlled. Don't get me wrong, AI is a miracle. And I couldn't be more grateful to be on this timeline where I get to engage. With AI, but AI will not accidentally lead us somewhere wonderful. We cannot abdicate responsibility for our own lives. We must learn to think for ourselves, not by proxy with the elites, not by AI.

• 13:15Tom Bilyeu?

  AI is a tool, just as lawyers and politicians are a tool. That can either make things better or far, far worse. AI is a tool. It can improve our lives or lead us to ruin. The key is, we have to learn to think for ourselves with a mental model that has built-in error correction and sidesteps both ego and emotion. If you don't account for that, the tail is always going to wag the dog. You will always be a servant to your biology. You will always be easy to manipulate. Incentives outrank ideology. People can believe what they want, but if you show them the incentives, I will show you the outcome. Once you accept that biology shapes how we think, you start to see the world differently. You stop asking, why is that person doing something so stupid?

• 13:59Tom Bilyeu?

  And you start asking, what incentives are driving that behavior? One of the most important things I've ever learned is this. People don't do what's right, not even what they think is right. They do what they're incentivized to do. That includes you. It certainly includes me. You want to understand business? Follow the incentives. You want to understand politics? Follow the incentives. You want to understand yourself? Of each thing you do, ask a simple question. What am I really trying to get from this? Let's zoom out for a second. Why is inflation my obsession? And why is it so hard to solve? It's an incentive problem. People want things for free, but until humans will work for free, nothing, nothing will come for free.

• 14:40Tom Bilyeu?

  Inflation, AKA the act of the government printing money out of thin air, creates the illusion of getting something for free. Inflation allows the voter to demand the government to give them things for free, like healthcare, and for the government to reach into your wallet and take money out without you noticing. If you don't believe me, watch my video on money printing and inflation. Or if you really want to go deep, read The Creature from Jekyll Island. It is about the creation of the Federal Reserve Bank, and it will melt your Your entire brain. Humans want today to be easy, even if it makes tomorrow hard. Homer Simpson has a great line as he's being berated about how he's going to regret his bad choices. And he says, "That's a problem for future Homer." Man, I don't envy that guy.

• 15:24Tom Bilyeu?

  And that is the architecture of the human mind. "We will gladly pay Tuesday for a burger today." Sorry, it's Popeye reference. I couldn't help it. But hopefully, you guys get the point. Humans respond to incentives. And if we're not aware of how we're motivated, we are very easy to lead around by the nose. This is why we have three branches of government. They are meant to be in healthy tension, protecting us from the worst of our impulses. Tyranny arises specifically when one person is able to do whatever they think is best. The human mind is so intrinsically flawed that we need corrective mechanisms baked in to the very structure of our thinking. Don't get me wrong, the human mind is an absolute marvel,

• 16:07Tom Bilyeu?

  but we are best understood as emotional creatures. And rarely does what feels good end up being the most effective path to fulfillment or even accuracy. Hence, the need for religion, bibles, self-help books, technology, a government, and even AI itself. In 2018 and 2019, two Boeing MAX 737 MAX airplanes crashed, killing 346 people. Why? Because of a faulty flight control system. But here's the deeper truth. The system was faulty because of faulty incentives. Boeing had a North Star beat Airbus to market. That single incentive created a cascade of shortcuts, secrecy, and failure. Nobody wanted to build a plane that crashed, but the incentive structure made it almost inevitable.

• 16:50Tom Bilyeu?

  And that's what happens when people optimize for the wrong thing and call it strategy. You have to judge a tree by the fruit that it bears and iterate quickly when things are going wrong. It is the only way to find out if you're thinking in an effective way. Quick break, but don't go anywhere. There's more to come after this short break from our sponsors. Luxury brands are not charging you more for better cashmere. You're paying for the storefront, the ad budget, the name on the tag, but Quince cuts all of that out. They work directly with ethical factories. They skip the middlemen and sell 100% Mongolian cashmere, starting at just 60 bucks. 50 to 80% less than similar brands. Now, I gave one of these as a gift last year.

• 17:33Tom Bilyeu?

  It was a big hit and gifting is really the test of a brand. You might tolerate a lot of stuff in your own closet that you would never give to somebody else. I've got their joggers and a couple of their tees as well. And I can tell you their whole line is high quality. Give the gift of quality this holiday season. Download the Quince app for app exclusive offers or go to quince.com. Get free shipping on your order and 365 day returns. It's now also available in Canada and the UK. And when Quince asks where you heard about them, make sure you tell them that it was on Impact Theory. That's the best way to support the show. Let's talk about something that genuinely keeps me awake at night. My team at Impact Theory gets hit with phishing scams

• 18:17Tom Bilyeu?

  from bad actors pretending to be me all the time. And they keep getting more sophisticated attacks with details specific enough to look legit. AI has made a lot of things possible, including scams like this, but AI still needs raw material. It gets it from data brokers who sell your name, address, phone number to anyone willing to pay. Incogni goes after that supply. They handle removal requests across 420 plus harmful broker sites. And they keep checking back as brokers constantly try to relist you. On the unlimited plan, the exposure scanner hunts down your information. Send a link and their privacy experts handle the takedown. Track your progress in the app and get a monthly risk assessment

• 19:02Tom Bilyeu?

  showing exactly where you stand. Go to incogni.com/impact and use code IMPACT for 60% off an annual plan. Incogni is I-N-C-O-G-N-I.com/impact. Promo code IMPACT. It's completely risk free with a 30 day money back guarantee.

• 19:24Tom Bilyeu?

  Alright, we're back. Let's get into it. Alright, here's why I seek disconfirming evidence. I know I am prone to thinking in the wrong way, so I always assume I'm wrong. I seek out disconfirming evidence because if I don't, I'll build my life on broken assumptions. And the higher I climb, the harder I'm going to fall. Here's how I actually live this. I run experiments constantly. I try things. I measure the results. I don't lie to myself about whether I'm making progress and I make adjustments along the way. I expect to be surprised. I expect to be wrong often. And I don't need to be right. I just need to improve. That's why I'm not partisan. I do not want to be on a team. This is why I don't debate for sport.

• 20:09Tom Bilyeu?

  This is why I care more about frameworks than ideologies. I am absolutely terrified of dogmatic thinking because dogma leads to crystallization. You stop being nimble. This is why people say genius is a young man's game. This is why they say science does not move forward one insight at a time. It moves forward one funeral at a time. People get so trapped in their thinking, they're unable to make progress because they want to be right and they don't seek the things that show that they're wrong. The whole reason that this channel exists, if you're wondering. The reason that I cover the wide range of topics that I do is because this is such a pivotal moment. Because finding the right answer actually pays off massively.

• 20:53Tom Bilyeu?

  Because we're being manipulated and I'm chasing what works. Because I want to understand why the West is in decline. Because I want to know why there are so many conflicts around the world and why we're drifting toward a US-China Cold War. And I want to know if we can stop it from going hot. Because I want to understand how money actually works and why we're being lied to about it and how those lies are keeping billions of people trapped in a cycle of poverty. Because I want to know how to position myself and help you do the same. Not just to survive the next decade, but to avoid being bamboozled and to win. If you want to understand this channel, you need to understand my desire to make forward progress by mapping cause and effect. It's not about being right. It's about finding the right answer.

• 21:38Tom Bilyeu?

  It's not about fitting in or saying what people want to hear. It's about building something that lasts. It's no longer about building an audience. It's about engaging with a community and it's not about pretending that I know everything. I don't. It's about constantly updating my model of reality. That mode has served me incredibly well so far in my life. And my hope is that the ideas we explore here together will help serve you as well. And if what I do does serve you, the channel will grow. And if it doesn't, the channel will die a rightful death. Either way, I'm grateful for your attention and I look forward to building something useful together. Until then, my friends, be legendary. Take care. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do. You need consistent nutrition. We all do.

• 22:23Tom Bilyeu?

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• 23:05Tom Bilyeu?

  You get a welcome kit, travel packs, vitamin D3 plus K2, and flavor samples. Click the link in the show notes or visit drinkag1.com/impact to claim this offer.

• 23:21Speaker 01

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