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Financial Freedom Is Merely Organized Common Sense
Rethinking Education – Deriving Meaning
There is little point in learning anything unless you know what it means. Without meaning for you, you won’t likely remember it. You certainly won’t be able to act on it successfully.
For some subjects meaning involves comparisons. For others experience alone serves.
Experience
Suppose I tell you it is minus 20 degrees celsius outside. If you live in northern Canada and it is January, you might say, “A beach day.” If you live in Ohio, you would likely refuse to go outside. If you live in Jamaica, you would have no idea what it means. I recall a Torontonian discussing the cold with a local person in the James Bay area of Canada. The temperature was -55. “Is that Celsius or Fahrenheit?” was the question. “Doesn’t matter.” was the reply.
You have to be there to understand that temperature. When people immigrate to Canada from a warm country they are surprised. When one from India was asked what they found different in Canada, one replied, “Cold means something different.”
Experience involves experiencing -doing. A highly skilled carpenter has much the same subject learning as a new apprentice. They can accomplish much more in a given time because they have done it before. They become faster and more precise. They know things not in the books. The rare exception. Ways to layout the work ahead. A better understanding of materials and their limits.
Tradespeople know little tricks that help them. My grandfather repaired machinery in a factory. He could judge 1/32 inch by eye. He knew how long his thumb joints were and its width at the knuckle and the narrower bone between. Strangely, his forefinger was almost exactly 4 inches long.
Experienced people know what to ignore too. You can’t learn that with a book.
Comparison
People take numbers particularly to have meaning. If they ever do, that’s the exception. Suppose I tell you that in the first few months of the pandemic, 10% of all healthcare workers left their job. Interesting, but what did you learn. If I told you 1.5 million left their job, do you think differently Knowing that there were almost 16.5 million to start is comparison information and makes the information change its meaning.
For more context, the number remaining was about the same as it was at the end of – which year? 2014 as it turns out.
As the number fits to context you know more about the question or opportunity.
In accounting or investing, all the value is comparison. Internally, externally and in time. Sales were $5,000,000 last quarter would be astounding for your corner variety store, horrendously bad for Walmart.
Context lets you judge meaning. No context – no meaning.
The media often provides data. That is not information until you assess its validity and assign it to a contextual framework. Decisions rely on information in context and compared to other information in other contexts.
Deriving meaning is not as easy as you might think. Take a data point like the number of people who presented with heart issues after taking a Covid vaccine. How many were reliably validated? How many doses were administered? First dose or second? Was it exactly the same vaccine throughout? Was the population studied reasonably the same? (not a mixture of all ages for example) You can get the first number and for people 12-29 you can get the validated number fairly easily. 1,793 and 1,049 respectively. The number of doses administered, and whether the adverse event happened after the first or second dose is obscure. When you leap deeper about safety you find the data is about the entire population. Because that involves dissimilar people it doesn’t help you. Some CDC information
Assuming you could find all of that information, your decision would still be in a foggy space.
How many of the 1,049 died would be useful. In that demographic, how many adverse effects are there for people who were never vaccinated? How many of those died? How many of those successfully vaccinated acquired the disease? How many of those had adverse effects and how many died?
The context leads someone to a comparison. Which action makes my odds of health and survival better and by how much? That is the kind of cost/benefit that makes for meaningful decisions. There are many other factors to consider, like economic ones or spreading to others, but you get the idea.
Deriving meaning in subjects without numbers
When you learned European history, how much discussion of meaning came out. I recall things like a chronology of war, but not to much about why they occurred. Looking back now, they appear to be a collection of skirmishes, civil wars, or big armed robberies. The meaning of each is not clear. Perhaps the ego of the leaders. Maybe ancient affronts. Possibly the need for more space to support a growing population. Perhaps theft of riches. In most cases one side was perceived to be weak and therefore exploitable.
Many subjects show tendencies but not determinative outcomes. That’s fine so long as you understand the limits. For example, we know from psychology that disagreeability is an important personality factor. About 60% of men are in the top half of the disagreeable range. That doesn’t mean men are disagreeable and women are not, it means that if you pick a man-woman pair form a crowd, there is a 60% chance the man is more disagreeable than the woman. Not a big difference, but played out over a long time a meaningful distinction.
You can rely on tendencies if you have a big enough sample. It’s like Errol Flynn’s
Decision making is an important ability
It is not taught in school. It could be and should be.
It can involve an enormous number of interconnected variables, some of which are little better than guesses. Successful decision makers change their mind as some of the fuzzy variables come clear. Inept decision makers tend not to change. The most inept never make any decision at all. The best decision makers quit doing dumb stuff sooner.
You can improve as a decision maker with practice. But as Vince Lombardi pointed out, “”Perfect practice makes perfect.” Better decisions are the ones that turn out to predict future outcomes successfully. If your decisions tend not to work out, they may have been poorly considered.
If you keep track of what went into the decision and what outcome happened, you will be able to improve your method of collecting and assessing information and context. Learn a little about Bayesian thinking. You will get the idea of continuously amending your decisions as more facts come available.
There are not many decisions that are made, are successful, and never change.
Making a decision and communicating it are both important, and often poorly executed.
Helping young people.
- Understanding context is as important as knowing some peculiar fact. Young people tend not to expand the space they decide within. Narrow context leads to very weak decisions. Not enough factors are considered.
- Learn about about how an honest cost/benefit analysis works.
- People should learn to assess the effect of tendencies. As Damon Runyon has opined, “The race is not always to the swift nor the battle to the strong, but that’s the way to bet” Much of life is about betting more often on probable events. Learn a little about probabilities. If the tendency is 51% in favour and 49% opposed, after many examples, the 51 % tendency will be dominant. It is a mistake to look at just one example and derive meaning from a tendency.
- Be willing to be wrong. You learn more from what you do do wrong. Education is expensive. The only huge mistake is the one you continue to make. How many things can you reasonably expect to get right the first time you try. Mistakes are your friends. Look for situations where mistakes are possible – so long as you can afford them financially, and they are not physically too potentially harmful.
- Share decisions you make so they can gain experience from someone else’s mistakes.
- Put things they learn from books into context so meaning can be found, or at least assessed.
The takeaway
Education is much more than school. “Education is what remains after one has forgotten everything they learned in school.” Albert Einstein.
Children should learn more of what assists them acquire an education.
A sound education improves the likelihood of success.
Knowing a fact is not the same thing as knowing what something means.
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I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.
Be in touch at 705-927-4770 or by email to don@moneyfyi.com
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