moneyFYI
Financial Freedom Is Merely Organized Common Sense
From The Other Side
Charlie Munger invokes mathematician Carl Jakobi often. His thought, “Invert, always invert” is valuable for thinking about situations. Sometimes you must look at the negative side of the image. It’s like those images where you cannot see one part because you have focussed on one aspect. I have trouble with the Batman logo.
Daniel Kahneman has pointed out how inverting works. “You can’t study how people remember, but you can study how they forget.”
Seeing both sides helps.
For example:
“You can’t expect to win unless you know why you lose.” Benjamin Lipson
Avoiding loss is often easier than finding a way to win. When you know of the risks and potential negatives, you build a field where success is more probable. Success is never certaint no matter how well you prepare, but playing a game where the odds are more in your favour helps.
Avoiding stupidity is profitable. The trick is to know what’s stupid. A little depth and observing the dark side helps.
Avoiding the errors
- Like a trial lawyer know the opponent’s case. In this case the opponent is the world you find yourself in. What does it reward? What does it punish? How long does it take for actions to produce outcomes?
- Preparation involves acquiring some special skills. Like becoming an electrical engineer, or a doctor, or a plumber, or a teacher.
- Preparation also involves acquiring some general skills. The ability to listen, to write, to do research, to have a wide knowledge space, to be curious, to be cheerful. There are many and the courses are not online. General skills are those that allow you to be the intermediary between specialists and the regular folks. A translator of sorts.
- Patience. Few things that are complex happen in a few days. If a farmer planted a field of corn and then demanded it mature in a week, we would think him insane. All skill building decisions have a time element. The important ones are never finished.
- Beware the Dunning-Kruger effect. Graham Savill offered this image. There is always more to learn.
There is a story that someone noticed Pablo Casals practicing cello at age 83. He was asked why the most capable cellist ever would spend 4 to 5 hours a day practicing? His reply, “Because I think I am making progress.”
The Takeaway
If it is a complex field, you will never stop learning. Acquire the skills to be a good student and never stop using them.
I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.
Please be in touch if I can help you. don@moneyfyi.com 705-927-4770
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