The Technical-Behavioural Effort Rule
Add effort where skill is technical; subtract it where success is behavioural
- Difficulty
- Easy
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 70%
Housel's rule sorts any endeavour into technical or behavioural and prescribes the opposite response to each. If success depends on technical skill, like a golf swing or Tiger Woods angling his shoulders, more practice and effort genuinely help. If success is behavioural, like investing, effort is usually counterproductive: the smartest people from the best schools try hardest, pull the most levers, and earn the lowest returns, while patience and leaving things alone win. He notes that a century ago the richest people got the worst medical care because they could afford quacks to 'fiddle' with them, and the same corollary holds in finance, where high-fee advisors justify themselves by turning knobs. The rule: match effort to the domain, and treat unnecessary complexity as a warning sign rather than a mark of competence.
Origin
Articulated by Morgan Housel in conversation drawing on Same as Ever, using investing versus athletics as the contrasting cases and Warren Buffett's simplicity as the counter-model.
Core principles
- 01There are no points awarded for difficulty.
- 02A small handful of variables drive the majority of returns in most endeavours.
- 03In technical domains, effort and practice compound skill.
- 04In behavioural domains, effort mostly adds noise and error.
- 05Complexity is often a signal sold to justify a fee, not a route to better outcomes.
How to run it
- 1
Classify the domain
Decide whether success in this pursuit is driven mainly by technical skill you can refine, or by behaviour and temperament you must manage.
Pro tip Ask: does the best performer win by doing something intricate, or by not flinching?
- 2
For technical domains, add effort
Practise more, study the mechanics, and refine your technique. A better golf swing or surgical skill genuinely comes from trying harder.
- 3
For behavioural domains, subtract
Do less. In investing that means buy, hold, leave it alone and endure volatility rather than tinkering. In relationships it means focusing on a few simple behaviours like respect, not an ever-growing to-do list.
Pro tip Patience and the fortitude to not act are the real skills in behavioural games.
Watch out Every extra knob you turn in a behavioural domain usually adds cost and error, not return.
- 4
Treat complexity as a red flag
When someone sells complexity, jargon or a black box, ask whether it improves the outcome or merely justifies a fee. Simple that works beats complicated that impresses.
Watch out People equate simplicity with cluelessness, so complexity is often performed, not needed.
In the wild
Housel observes that in investing the smartest people from the best schools, with the best educations, are the ones who try hardest, pull the most levers and turn the most knobs, and very often earn the lowest returns. He compares it to a century ago, when the richest people got the worst medical care because they could afford quack cures that poisoned them, they fiddled with it too much.
→ In a behavioural domain, effort and complexity dragged the most capable people below a simple index fund.
Tiger Woods hits a ball better because he has mastered a technical motion you can only acquire through practice, so effort pays. Investing, by contrast, is purely behavioural: what matters is whether you can leave it alone and endure the volatility, not any technical manoeuvre. Housel applies the same split to relationships, calling a daily list of ways to be a better partner a sign of trying too hard.
→ The same amount of extra effort helps in the technical case and hurts in the behavioural one.
Common mistakes
Applying practice logic to behavioural games
Assuming that trying harder always helps leads capable people to over-manage investments or relationships and erode the very outcome they want.
Buying complexity as competence
Mistaking jargon and elaborate systems for skill leads you to pay for black boxes that a simple approach would beat.
Is it for you?
Best for
Investors, and anyone in a behaviour-driven domain like relationships or long-term health, tempted to over-optimise.
Not ideal for
Purely technical crafts where more deliberate practice reliably raises the ceiling.
From the transcript
“whenever the endeavor is technical, you need to try harder. When it's behavioral, you need to try less”
“There are no points awarded for difficulty.”
“the smartest people who went to the best schools... are the ones who try the hardest and very often earn the lowest returns”
From the episode
12 Unexpected Laws Of Human Psychology - Morgan Housel - #746
Morgan Housel