In his Man in the Arena speech, Theodore Roosevelt emphasized the importance of having skin in the game:
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena.
Skin in the game
Commonly (mis)attributed to Warren Buffett, the phrase skin in the game refers to having personal investment or involvement in a particular endeavor — financial, emotional, reputational, or otherwise.
Buffett believed that corporate leaders should have personal investments in the companies they run. This would ensure that decision-makers also feel the consequences of their actions and in doing so, align their interests with those of the shareholders.
We can extrapolate Buffett’s logic to our own lives, to help us pursue goals that matter to us. So, if you ever find yourself wondering why your projects aren’t moving forward as much as you’d like, it might be time to ask if you’ve actually put anything on the line.
Nothing to lose
Without skin in the game, it’s easier to feel detached because any actions we take or decisions we make don’t directly affect us which, in turn, leads to loss of motivation. And as we can all concur, fading motivation is the quickest way to doom a project before it even takes off.
But the real reason having skin in the game keeps us motivated is because it gives us something to lose. As human beings, if I were to rank things we universally dislike, losing is right up there with parallel parking. Behavioral psychologists have a term for this phenomenon: loss aversion.
Loss Aversion
Everyone feels blame more acutely than praise. Charles Darwin.
As some of the most influential studies on human behavior have illustrated, we hate losses more than we love gains. The pain we feel when we lose $20 is much more intense than the pleasure we get when we gain $20.
This explains why when we’ve spent money on a product or service, we feel a greater urge to use it so we don’t “lose” the investment. Of course, this can lead to the sunk-cost fallacy: we tend to sit through all three hours of a terrible show because we shelled out $125 for the ticket.
The question, though, is how to make lemons out of lemonade — how do we turn our natural loss aversion tendencies to our advantage? The answer is to have skin in the game, especially when we care about making progress.
Here are a few examples:
Fitness Goals
The New Year is just around the corner, and if you’re wondering why, once again, you haven’t hit the fitness goals you set for yourself at the beginning of the year, ask yourself if you really put your neck on the line to achieve them.
When willpower alone isn’t sufficient to get you to workout, it may be time to raise the stakes — announce your intentions about your fitness goals on social media, or sign up for training sessions. You’ll feel more compelled to train when you make a public commitment or have money invested.
Creative projects
Nothing inspires more than a deadline. Artists and writers who commit to public deadlines will likely be more motivated to than those who work on entirely private projects with no accountability.
Charitable deeds
Even when the aim isn’t personal gain — say, we’re focused on helping a charity — getting specific about who we’re trying to help and how much can shift the way we approach our efforts. Consider celebrities on game shows like Who Wants to Be a Millionaire, playing for charity. They tend to act more responsibly and carefully weigh risks, knowing their actions will directly affect someone else.
Easy Come, Easy Go
At the heart of the phrase Easy come, easy go is a psychological truth: we value what we earn more than what we’re given. When something comes to us with little effort — whether it’s money, success, or even personal relationships — it’s easy to take it for granted. There’s a lack of emotional attachment because no personal investment was made.
Having skin in the game will require us to take on risks and sacrifices to achieve long-term success or rewards. It is that patience and accountability that will help us secure a future benefit.
Here’s the bottom line: rewards usually come with risk. Whether it’s financially, emotionally, or by putting our reputation on the line, having something at stake gives us a real push to show up and do our best. Without skin in the game, we’re just bystanders in our own lives.
Those who talk should do and only those who do should talk. Nassim Nicholas Taleb, Skin in the Game: The Hidden Asymmetries in Daily Life