moneyFYI
Financial Freedom Is Merely Organized Common Sense
The Simplest Risk-Averting Question
Be cautious with situations where the outcome is harder to manage than the input and effort that created it. That’s a risky situation.
The key to managing any decision process is asking yourself a simple question, “What happens next?” Secondary effects can be far more destructive than you might think.
Here is an example most people don’t know or care about. In a nuclear weapon all of the detonation process happens within about 20 picoseconds. Pico means trillionth. It is a meaningless concept unless you break it down some way you might understand.
We know light travels at about 300,000 kilometres per second. That is 300 billion millimetres per second. How far will the first newly created light and gamma rays travel by the time the entire detonation process has completed? About 1.5 millimetres, or about a 16th of an inch. The whole thing is effectively over before any energy gets clear of the bomb case.
After 20 picoseconds, the only thing that matters is the distribution of the energy created during detonation. That is quite spectacular.
Be very cautious with a decision that can have huge secondary consequences. Putting toothpaste back into the tube or unscrambling an egg look relatively easy compared to unexploding a nuclear weapon. Even cleaning up after is a formidble task. Choosing a career, getting married, or having your first child are a little like that.
Creating a 20 picosecond nuclear explosion should not be undertaken wthout clearly understanding what happens next, what happens after that, and then what again. Some of life’s decisions are similarly consequential. Think of outcomes as the answrs to a chian of “what then” questions. You’ve seen decision trees. Thta’s what they are about.
If you cannot reverse the original step, it is a riskier decision than one where you can affordably do so. Asking just one question is risk planning 101 and most people never ask.
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Simplifying Life
Three weeks ago I wrote an article titled “Strategic Confusion.”
A regular reader, who is old enough and wise enough to know, commented, “Living life was meant to be simple right from the beginning but it is made complicated by the one who lives it.” What would be the way to behave to keep it simple and yet still achieve all you are capable of doing and want to do? The answer might be to work on the process and let the outcomes be what they will.
Earn your own satisfaction and let awards and such be secondary. Let them be the fallout, not the purpose.
A worthy newsletter
I am on a mailing list for “Six at 6 On Sunday” which is brought together by Billy Openheimer. You can click the link and sign up for the newsletter. You should. The offering for 28 April 2024 addresses process versus recognition for your efforts. I think seeking recognition for your efforts is where life’s simplicity is destroyed.
This is the thought that hit home for me. I would have been a better person had I known this 50 years ago.
SIX at 6: Pacific Salmon, A Heartbreaking Thought, The .01%, The Pinnacle, The Nobel Prize, and The Work Itself.
Life is not about how others feel about your effort, challenges and outcomes. It’s about how you relate to what you do.
The last paragraph from this newsletter:
Try To Get Most Of The Rewards From The Work Itself
If not things like money, awards, honors, prizes, and medals—what should we strive for? “When we were writing Good Will Hunting,” Matt Damon said, “Ben [Affleck] and I always talked about just wanting to love it. We would say, ‘If it’s just a tape on our mantel that no one ever watches, we want to love it.’ We kind of stumbled into a very wise strategy, which is to try to get most of the rewards from the work itself.” Since you control the work itself, since honors are un-real, since the outcome is always .01% of the total experience—Ryan Holiday once told me, “The work has to be the win. Ultimately, you have to love doing it. You have to get to a place where doing the work is the win and everything else is extra.”
Emphasis added
“The work has to be the win. ….. Everything else is extra”
That’s good advice, and it makes the work better.
Note – it applies to more than just work.
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We Violate Ancient Wisdom
Chinese writer, philosopher Lao-Tse was born in 591 BC and over his life founded the philosophy/religion of Taoism. Many of his ideas are easily applied to life tody. Let’s look at three of them.
“Mastering others is strength, mastering yourself is true power”
Until you master yourself, you will follow counter-productive paths. Remember how we thought as children. Being the dominant kid in the neighbourhood seemed attractive. Being promoted at work is often for its social value. Leadership positions that provide control over others ccan be addictive. Leadership is not control, but direction and growth.
When you know your values it is easier to aim yourself at outcomes that truly matter. Maybe those would matter only to you, but you cannot have a strong relationship with any other unless you know who you are.
One big step is understanding your strengths and how they work together with your weaknesses. Weaknesses are easy to overlook when seeking validation by achieving what you think others would value. You do not have to turn weaknesses into strengths, but you must learn when they imperil the application of your strengths.
Life is like golf. You can have exceptional talents in one aspect of the game, but champions are at least good at every aspect. Building the “You” package is your task.
“He who knows that enough is enough will always have enough.”
Many people value things that are not functionally useful. I recall an organizational psychologist talking about how money is a “dysfunctional motivator.” If you pay someone too little they will be demotivated , but if you pay them too much they will not be much more motivated than someone who is paid correctly. That is true in some businesses, but not all. Wall Street bankers value their seven figure bonuses without regard to the personal value of the work they do. Working just for money and valuing yourself accordingly becomes self-defeating eventually.
In economics there is a thought. “Diminishing Marginal Utility.” That means that some money is necessary and valuable, and more can provide security and options. But as you pass those guideposts, you may find that money becomes just a number on your tax return. Nice enough but if that number defines you, you will not get the most from life. Someone with two billion dollars can live as well as someone with ten billion.
When you know what provides value to you and your important others, excess can easily become a burden. Do you give much thought to travelling with bodyguards? If you had an enormous fortune, would you? There are guiding principles in life. One is the law of conservation of problems. Problems don’t go away with more money, they just change their form.
Know what enough means to you and be sure the definition does not rely on comparisons to others.
“Nature does not hurry, yet everything is accomplished”
Do you know what 90-day corn is? It is corn that from the time of planting to maturity takes 90-days assuming the weather is as expected. Corn takes longer to develop if it is cool. farmers manage their planting by a formula that relies on “degree days” a measure of accumulated heat. If you live in a colder place the corn needs longer to reach maturity.
Using Lao-Tse’s thought it means things happen in accordance with a natural cycle or pattern. You cannot stand in your cornfield and demand the crop grow faster. Understand the whole structure and work within it. You can be like nature only when not burdened with impatience.
Another bright mind delivered a similar Idea. UCLA basketball coach John Wooden coached his teams to win 10 national championships in 12 years. His idea applies perfectly to any form of athletics. “Be quick, but don’t hurry.” Like Lao-Tse, he recognized that hurry is a defect. You will find many other tworthy houghts if you examine these “Woodenisms”
The idea.
Know what you must have to be happy and secure. Don’t chase external values. Cooperate, don’t command. Once you know notice how long it takes to fit everything together, take the time and do it right. Impatience is your enemy.
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Planning Is A Necessary Skill
When we are young, we dream about our future. The problem with dreams is they are not functional. As one grows older it becomes necessary to learn how to convert dreams into plans. Planning is organized and disciplined. Dreams are more flexible.
Seth Godin sets out some insights today.
Dreams, plans and contradictions
Dreams are fine. And dreams involve contradictions. We want this AND that, but both can’t happen. That’s what keeps them from being plans.
Plans embrace boundaries and reality, they don’t ignore them.
Plans thrive on scarcity and constraints. Plans are open for inspection, and a successful planner looks forward to altering the plans to make them more likely to become real.
One of the steps on the way to adulthood is discovering how to turn the right dreams into executable plans. Planning is merely organized dreaming.
Learn the organizing part.
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Knowledge, Experience, Skill and Effort
I noticed this story on Quora French and have modified it somewhat. It is too good to ignore.
A giant ship’s engine broken down, so the ship’s owners sought help from all the experts they knew. They looked for the fault, but in vain. None of them figured out how to fix this engine.
After much effort, they found an old man who had been repairing ships since he was young.
He came with a large tool bag, and when he arrived, he started working. He checked the engine precisely, from top to bottom.
Two of the ship’s owners were looking at him with excitement and anticipation, hoping that the old man will find out the cause of the problem and then repair it.
Minutes after he finished the examination, he went into his bag and took out a small hammer and gently knocked on part of the engine.
Immediately the engine started. He neatly put the hammer back in the bag. The old man said: The engine has been repaired!
A week later, the owners received the repair bill from the old man. It was ten thousand dollars!
But the ship’s owners were shocked and said, “Impossible, he barely did anything.” Then they wrote the old man a note saying, “Please send us an itemized invoice for the work you have done.”
The man sent this itemized invoice:
Examination of engine $50.00
One Tap with a hammer 1.00
Know which hammer 1,000.00
Know where to tap 7,000.00
Know how hard to tap 1,949.00
Total $10,000.00
The thing to learn. It’s knowledge, experience, and skill, not effort that earns your pay! Effort is important, but knowing how, where, and when to make the effort in your life matters and makes the most difference.
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Strategic Confusion
I came on this while cleaning up emails and it caused me to address it in an email to one of my children.
Boyle’s Law says that pressure and volume are inversely related. Double one and halve the other. P1xV1 = P2xV2.
There’s no such thing as work life balance. There’s simply life. And you spend part of your life at work.
One way to change the pressure of work is to expand or contract the size of the container that holds it. It’s a trap to embrace a productivity shortcut that isn’t a shortcut at all–simply more time spent.
Boyle’s law helps us realize the same thing about any gas in the physical world. The pressure is related to the volume…
If you’ve found a way to make a living, the challenge in making a life is to find the guts to think about the size of your work container.
That’s not easy.
It comes with tradeoffs.
We don’t always succeed.
But it’s not called Boyle’s guideline.
Seth Godin 30 March 2024
Reality is hard
You need a strategic goal for direction and you should be careful choosing it.
I had a lawyer client who worked 90 hours a week and was not thriving personally, or physically, by doing so. I thought he should hire another lawyer to which replied, “I don’t have time to hire anyone.” We author many of our own problems. A successful life is about adapting. as pressure and volume change. Adding another lawyer increases the volume and so reduces the pressure.
Work-life balance is harder than people think. The problem is that the strategic idea of what is right, is not necessarily something you can create tactics to implement. People often think strategy and planning are the same thing. They are different. Strategy is about picking a place to play and a way to win. In business it depends on external factors like customer preferences, competitors, product, cost structure in the place, and so on. Tactics is about how you implement your strategy within constraints you understand.
Worse yet, the tactics must change as you learn from contact with the real world. Sometimes enough to give up on the strategic objective.
In your case, it likely begins with deciding how the job adds to you, the person. The salary is just one aspect. Personal development another.
Your particular environment makes it very difficult to design an ideal strategy. Your context is complex, rigid, and very demanding. The parts that change in the short run are limited and the parts of the structure you can change personally is very limited.
A thought from the military explains the difference when you have unlimited resources and capability. “We will respond appropriately at a time and place of our choosing.” The strategic part is “appropriately,” while the time and place depends on tactical resources and the context within which they may be applied. It is uncommon to have that sort of strategy – tactic capability in life. There is no perfect answer. Growth depends on directional accuracy.
Another way to think about implementing your startegy
Dan Sullivan is a strategic coach. This advice is his. You can manage the gain or the gap. Managing the gain tends to be motivating while the gap tends to be disabling.
“You should “measure the gain, not the gap.” You can train yourself to see even short-term growth by measuring progress on a weekly, monthly, or quarterly basis. Just ask yourself: What wins have I had in the past 90 days? Once you start to distinguish between your current and former selves, it becomes possible to view your future self as a different person as well.”
I recommend a shorter time in the beginning. Most people won’t last 90 days if they wait to measure.
\When we don’t understand the gap/gain context we tend to attach to the gap. When you pay attention to the gap we must be disciplined instead of motivated,. Strategic goals are fuzzy, distant and seemingly unreachable. There is no clear first step and a chain of events that gets us there. You must discipline yourself to get there.
Most of us have a fairly small tank of discipline while the motivation fuel tank grows with each little success.
Notice the things that you feel good about achieving. The rest is just stuff. Important, but overhead to the goal of a satisfying life. An industrial psycholgist told me that most people will have satisfaction from a job if they enjoy 20% of what they do. Notice the overhead, maybe you can optmize it and get up to 30% satisfying.
Message
Aim at the goal, but keep track of how far you have come. Leaping the from here to there gap is impossible. Learn to build bridges.
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Is Evolution Prohibited By the Second Law of Thermodynamiccs?
I recently saw an argument that Evolution could not happen because the second law of thermodynamics required entropy (disorder) to increase. Evolution organizes things rather than increasing disoroder, so evolution is out. The person thought it was quit a compelling argument, but fragmentary “rules” seldom apply everywhere and always.
In the evolution case, the person is applying the idea of the law, not the law itself. We all get the idea of the law – Entropy increases. You cannot unscramble an egg. But the idea of the law misses important other factors.
The second law of thermodynamics relates to heat and energy conversion in a fixed sysytem. There is no heat/ energy connection in evolution. More importantly it only applies in a fixed system. Ones where external influences are not present. Life as we know it is not a fixed sysytem. All sorts of things influence it. Not the least of which are genetic change in the DNA caused by things like missing genes, cosmic radiation, and exposure to chemicals. As with most scientificly useful laws, they apply in very narrow situations. Life is less confined so the second law says nothing of value about evolution.
None of this says evolution is necessary, but in that it does not preclude it, it could happen. “Natural selection” makes some sense in a complex not fixed environment. Beings that are stronger do better when physical strength is an advantage so more of them will reproduce and if strength is transmittable, stong offsprings will become more common and eventully will dominate. The same goes for observation skills. Those who see problems sooner and clearer, don’t get killed as easily by sabre-tooth tigers, or traffic. There is a theme in old infrantry warfare that says the dumbest soldiers tend to die first. Things that help us and which can be transmitted will tend to appear.
The idea of natural selection says little about how humans came to be. I suppose over a few hundred million years, something could have morphed into a human as we know one. Observationally we might wonder if we are evolving at all. I have an image of two chimpanzees sittingin the viewing gallery of parliament thinking about a comment one has made. “You know Ralph, I am thinking our evolution experiment is becoming a disappointment”
The point is that in discussing evolution the second law is a metaphor. A metaphor is “a figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable.” – Oxford Languages
Metaphors are for insight, they are never proof of anything. They area places to jump off from to study some complex idea or observation. Be careful how you use them. Know more about intricate details. Do not simplfy them by excising important limits. They become confusing if you do. Confusion is never your friend. At a minimum know how to recognize them.
In the same vein, models are a metaphor for a complex set of circumstances. If you don’t know what information was left out and how the weighting of what remains was applied, you cannot infer truth to any outcome it produces. It is still early days with AI, and I think we will find the model idea applies to it too. If you don’t know what information is in the model and how the algorithms use that information, you don’t know enough. Be cautious before making factual assertions.
Learn to look for meaning and then decide if it is possibly, objectively true. Life is evolving regardless of how it came into being.
It is a fool’s game to trust metaphors and models to convey truth. Truth is outside their mandate. Both are tools for insight and may help us discover truth.
Use tools wisely.
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Fear Limits Us
Some grandfatherly advice.
This story is true and occurred when I was about eight years old. We lived near my grandparents and I spent a lot of time with them. He worked in a factory and repaired machinery there.
For Christmas that year, they had received a pop-up toaster. Not a new concept, but uncommon then. Unfortunately, only five or six weeks later it stopped working. Off to the workshop it goes. My grandfather handed me a tool and said, “Take the cover off.” I was reluctant to do that. It was a nearly new and wonderful thing. He insisted and his advice has remained with me and has served me well. It is about exploring and learning and applies to far more than broken appliances.
“If something is well made but not working, when you take the cover off you will often be able to see how it was made, how it was supposed to work, and what is wrong with it. Then, you can decide if it is repairable. Maybe a replacemenet part is needed. If it is poorly made and already broken, you can’t do much harm by taking the cover off.”
Without that advice my life would be populated with far more things that did not work and still had their cover on. In the toaster’s case a tab had slipped out of place and merely had to be reinserted into its slot. It feels really good to investigate and fix something.
When we fear, we let the current conditions remain. Sometimes just a little courage allows you to improve your life. Experiences can provide a lesson, in design, materials, and workmanship. Still other are unlike appliances and by studying what went wrong, we can learn. What’s wrong with your marketing plan, or your employee motivation system? That may take time and effort but repairing mistakes is a very good source of experience. Experience is a form of education and a costly one often. Acquiring experience is to assign meaning to things that didn’t turn out the way you wanted. That meaning allows improvement.
Years later my grandfather also pointed out, “Experience is the best teacher and for the price, it damned well better be.”“
The cost of no experience is high, probably higher. Don’t let uniformed fear keep you from learning. An unexamined failure has two costs.
- The cost of the failure itself, and
- Having paid that price, learning nothing..
Adverse experiences occur in everyone’s life. Learning nothing from a mistake is very expensive way to run your life. Don’t waste experiences.
Learn something new every day and the accumulation will help you grow. Just last week, I learned it ‘s possible to tickle a rat. I haven’t found how to fit that into my life yet, but it is a fun idea to throw into a conversation, and watch for reactions. I have had one person tell me they knew about it and how to do it. You use the eraser end of a pencil and record the event. The sound they make is ultrasonic, so you must slow it down to hear it.
More proof that other people know things we don’t. Learning what others already know is the least costly experience. Seek it.
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Think About “Success On Purpose”
Much of our life just happens to us. It results from implicit decisions previously made without much conscious thought.
Years ago, I was taking a course and the person in the next room liked to bet on horse races. He liked it so much, he did it nearly every day. I expect his course performance was sub-standard and I doubt he earned the difference in value at the track. Nonetheless, he helped me understand an important point about life.
Financial things are seldom one-dimensional.
As he was heading off to the track after lunch one day he made an amazing comment, since known to me as Steve ____’s Law. “I hope I break even; I need the money.”
The interesting part of the comment is not that it seems insane, but that for him the money was secondary to the excitement. For those of us doing things that involve money alone, the thought is illogical and that is our blind spot. Very few of the things we do involve money alone. People have many objectives when they go to work, and money is just one of them. It is social, it is educational, and it provides recognition of achievements. Few, if any, situations in life are one-dimensional.
Once you recognize the multi-variable world, you can make more nuanced decisions. I am amazed by how Elon Musk leads Tesla. I recall a comment he made about what Tesla holds as its guiding vision going forward. “We want to be less wrong.” Not, we want to sell more cars, reduce costs, or innovate, just be less wrong.
For you to do.
Notice what complex things you are involved with that influence the money you keep. Think about your job. Are there aspects that you value for reasons other than money? It’s okay if there are other reasons, just know they are there and decide if they are worth the cost. Maybe you can modify them a little in ways that are less costly. Maybe you can see a more complete description of your situation and decide if there is a better arrangement of the pieces.
You might discover that a job that pays less and reduces your commute time is better for you. Let’s suppose you spend 45 minutes each way in traffic. Stressful, and 90 minutes a day with which,you can do little else. Thirty hours a month lost, plus the costs to do it. Wear and tear on your car, plus fuel, added insurance costs, and parking. How much is that time and expense worth in terms of other choices like relationships, recreation, and rest?
Where it leads.
You come out ahead by not losing carelessly. You have the ability to play the life-game by different rules, and even refuse to play some aspects of it.
It is a part of “success on purpose.” Being less wrong is a very sophisticated thinking process. Try it.
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Communication In Unbalanced Situations
Seth Godin is a marketing and relationship expert, author, and consultant. He blogs every day and many are worth noticing. This is a relationship-oriented idea. It has application to family life and business situations too.
The articles are almost always short
This one is representative. “The Question Book” You might find it useful to subscribe and you can do so by following the link.
The question book
In the old days, companies had a suggestion box. It was immortalized in cartoons, but the idea that an employee could anonymously submit a suggestion to make things better is a first step in engagement. Some companies took this much further and paid employees for suggestions that generated profits.
Digital communication and more open workplaces have made the necessity for a box like this decrease. But we’re still often hung up on the odd cultural stigma around seeming dumb. So people don’t raise their hands, don’t ask questions and work in frustration and ignorance instead.
Something we learn as teenagers.
Perhaps we can begin with a teenager-focused solution. When your kid turns 12, give them a blank notebook. “Any time you have a question that’s embarrassing or you’re not sure who to ask, just write it down in this notebook and put it on my bed. I’ll write out an answer and return it the next day.”
By taking off some of the interpersonal pressure, this creates a useful channel for questions and answers.
And what happens if we bring the same medium to work?
The message to take away.
Communication is not a trivial process. In parent-child or employer-employee there is an imbalance of both experience and power. The more experienced party is responsible for the effectiveness of the transaction.
Words are only the beginning. Experts have estimated that verbal communication is composed of three parts.
- Words – about 7%
- Tone – about 30%
- Body signals about 63%
If you are dealing with someone who may lack the necessary skills or confidence to deal with the non-verbal part,. You need engagement to develop the situation. A word-only first encounter might provide a useful place to begin developing both the answer and the relationship.
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