Action and Consequence

As our decision-making scales, it also has consequences that ripple. I find it incredibly disheartening when I have done a lot of work, and then a decision gets made that means none of that work is used. Scale also means disconnection between where the work is done, and where the consequences are felt. If the decision maker is doing the work, they can be doing constant triage on marginal effort. Once outsourced, if the work goes done a different path, you need to wait till check-in points to find that out. 

Outsourcing work without outsourcing decision-making requires very clear questions. For anything to actually happen, late-stage decision-making often involves closing down options. Accepting constraints and shipping. Making choices in the face of ambiguity. Reducing the number of things that will make you change your mind. In a world of practical decisions, you can never make the perfect choice. There are always trade-offs. 

“An ounce of practice beats a ton of theory” requires loops of action and consequence. Consequence that can be felt in a reality that is complex, ambiguous, and uncertain. We have to engage with the world. Learning to build consensus is how the interconnected scale works. Unstated rules that allow us to go deeper, but when those rules break... require engaging in difficult unlearning and relearning. 

There are very few areas where we can be the only decision maker. Where it doesn’t matter what other people think. In most cases, we are forced to engage in the messy process of joint decision-making. That requires skills like social, cultural, and emotional intelligence and an awareness of, and interest in, other people’s stories. It requires acknowledging the challenge we face by only being able to judge from our context, and our need to expand our context to see and resee.

Feeling Consequences

Erosion gully caused by introduction of Rabbits as game animals

Finding Resonance

Other people’s stories make more sense to us when they resonate. When we recognize their experience in our own. We can be harsh on historic characters, harsh on our old selves, and harsh on others... distancing ourselves from them... but we can also not see them as essentially bad, but rather take every situation as how we could have found ourselves there. Find the resonance. 

There are learnings to be had in the stories of others. That is the glorious part of being human, we don’t have to wait to make mistakes ourselves... if we recognise there but for, go I. We are all human and we have a common base. Even if that base has shadows and light. “Best Practice” allows us to get quite practical about a menu of approaches to common human experiences, if we are willing to listen. 

One of the ways to take control of your career is to speak to people who already do what it is you are aiming to do. See whether the story you tell yourself matches with their reality. There reality won’t be yours, but it will resonate if you make similar choices. Find out what their days are like beyond the exciting bits that go into the sales pitch. What are their frustrations? What are the tradeoffs they have had to make? What would they tell a younger version of themselves? 

Listening to other people’s stories will help you chart a path for yourself. Not as a stick to beat yourself with, but as a guide for decision making. Being curious about stories, and histories, and lessons in different contexts can help unpack the traps in our own tangled baggage. Increasing awareness of parallel paths or obstacles we didn’t even know about.

Staying Fed

Building communities is hard. An advantage of being conservative is that there is someone to tell you the way things are done. If you are making allowances for people moving between, in, out, and through... and bringing themselves with, and leaving their mark... the complexity spirals. 

Capital is a conspicuous form of privilege. We want to be able to see individuals rather than judging people based on prejudices and historical skills. This means we need new tools for coordination and consensus building beyond “looking after your own”. 

The capital needed to reduce the impact of financial waves if made by solving clearly articulated problems for decision-makers with money. That is done by developing the skills and knowledge to solve that kind of problem. 

You need containers for capital. Containers have barriers to entry and barriers to exit. You want to reduce those barriers with faith that you are creating a bigger container in which everyone can succeed. The four freedoms of movement of capital, goods, services, and labour create a flow that benefit all as problems are solved. 

We need to reduce the fear that prevents others from solving problems because we need to be the one to solve the problem to get paid. If you are secure in your underlying income, you can stop grabbing at problems to perpetuate them to keep yourself fed.

Obstacles to Capital

Clear and present dangers stop you from building capital. By definition, there isn’t “extra” if there isn’t enough. 

One of the challenges for designers of Basic Incomes, or builders of Pension Funds, is when you should allow access to those funds. Should you be able to borrow money and agree to pay back, from your basic income? Should you be able to cash in retirement money to build an extension to your house or go on holiday? 

Similarly, how do you build capital when everyone around you is living hand-to-mouth? Especially when the need is so raw and so clear. As South Africans, we wrestle with in-your-face inequality, but even though we keep inequality in country-shaped containers, I don’t think moving to another container absolves you of responsibility. 

But what responsibility? How much should we just focus on the things we can control? The idea of being a “half-hearted fanatic”. You don’t want to be a martyr. It is a long-term game, and you can give more if you look after yourself too. You do need to be honest about what incentivizes you and keeps your energy up. 

I don’t think you can live in isolation and only focus on your story. Our stories are intertwined. Gradually, my reading on “learning and happiness” shifted to learning more about Universal Basic Income. The idea that everybody should get a regular income as a base from which to work.

Hard to grow without protection

The Rules we See

The way we see the world is path-dependent. Which means occasionally we have to reassess the way we remember seeing things. I didn’t grow up feeling like I was wealthy. I grew up with money fights and money anxiety. I felt like my life was quite simple. 

In retrospect, and in a South African, or global context... that is not true. I was part of the Durban Youth Council when I was 16 years old. In 1996, Theresa Mthembu was the mayor of the South-Central Durban Council and took me on a tour of some of the areas I had never seen. We went to her house in Umlazi, and though it was on the other side of the hill from where I lived, I had never been. 

In the Apartheid world I grew up in, you had the highway winding through Kwa-Zulu Natal, and you could drive from bubble to bubble. This is the same highway the Comrades Marathon is run along, with suburbs along the route. 

On the outside of the suburbs, you had the areas that supported them. In the whites-only areas, you would still have domestic workers, gardeners, and people working in shops. People who kept the system going but were hidden. Like in the connected world we still live in where we still limit the movement of capital, goods, service, and people. 

In that transitionary period when things started opening up, you could go over a hill and see an area that is home to half a million people. Something you can’t unsee. 

Wealth is always relative. When we consider how well we are doing financially, we tend to benchmark aspirationally against those doing better. This means people seldom feel like they are doing well financially, and are at peace with their finances. We are communal animals and our communities set the rules we see.

KwaZulu-Natal

Points of Contrast

The entry ticket of the community you are a part of goes up if the choices the collective choices they have made were good business ideas. This can limit the ideas you can choose to focus on if you want to be a part of those communities. To eat in the restaurants people eat in, send children to certain schools, or live where and how they live. 

It is easy to say, “don’t judge yourself based on your peers”, but it can get more practical than that. Going to visit a friend for dinner, you can’t help but see their comparative lifestyle. It is more challenging to see the whole picture. We only see what is conspicuous, and process the immediate points of comparison we notice or pay attention to. It can be difficult to hold on to your values and choices when spending decisions become joint decisions because of peer pressure. 

Part of stilling waves of anxiety, is realising that each wave is not the only wave. Each thought is not the only thought. There are others. The thing you are aware of in a particular moment will pass. 

When I stopped working and starting writing and thinking about non-monentary things, I realised that most of my friends were happy, but they had made a wide variety of choices with trade offs and consequences. Every opportunity you take, closes the door to other opportunities. Keeping all your options open can mean not actually experiencing any of those options. We can’t do everything. 

The other realisation I had was that there are a whole bunch of people who aren’t even in the position to question their choices. What can happen if you are solely focused on financing your own choices, is you can forget about the hills in Umlazi. Other bubbles are out of sight and out of mind. The nature of global apartheid is that not everyone has the same opportunity.

Shifting Winds

When you make choices, you narrow future choices. When you get on a path, you seldom get an opportunity for broad re-evaluation. An opportunity to say, “right, I am going to start from scratch.” 

When attempted a clean slate in 2014, I removed the stake in the ground of where I physically had to be. Normally that stake is your job. If you have kids, their schools. If you have a house, you can rent it... so maybe that is a medium rare stake. You can also change jobs and schools. The change is not a trivial one. 

I packed up a single week’s worth of clothing, carrying my world on my back. Australia and New Zealand chose themselves as my first destination because of a wedding invitation. 

Ironically, just before I left, I met my future wife. She was heading in the opposite direction. She is an Anthropologist and was transitioning from being an academic to engaging with the corporate world. She was shifting from living for the love of learning to a pragmatic and purposeful engagement with applying ideas. 

When I came back, we had to figure out a balance of two visions of the future. A challenge in building autonomy is our decisions impact others, particularly if we want to share our journey. 

How do we agree on the stakes? Our choices are path-dependent, and what happens affects what happens next. We are never in complete control. There is an element of randomness to it all. Within those constraints and shifting winds of change... we get to have an influence on the direction.

...and he's off

Being Conspicuous

There is a wrestle with the way people dole out respect. It is trite to say “don’t care what people think about you”, but umuntu ngumuntu ngabantu (a person is a person through other people). 

Even the most hardcore libertarian has to make agreements to engage with the world. That involves a meeting of minds. That involves respect, trust, and trade-offs. 

Now if you are wrestling for respect using conspicuous “success” that doesn’t resonate with you, it can be hollow. I sometimes get resentful when I do get recognition. 

When the thing being recognised is actually a trade-off I am making, and not what really drives me. When I meet the productive targets of others, but they don’t see me. 

They don’t see the inconspicuous, hidden, hard to communicate ways I am creating meaning. It can then be frustrating when the only time I get seen is when I am doing the things I need to do. 

Joint decision making is hard. Really seeing each other is even harder. 

“Sometimes I do what I want to do. The rest of the time, I do what I have to.” (Marcus Tullius – Braveheart)

Bears Repeating

The biggest pushbacks I get on the framework I use for developing financial freedom are:

1) Most people in South Africa can’t even find enough money for a living wage 

(half of all South African wage earners earn less than R3,300 and support 3.5 people), and 

2) “I can’t reduce my expenses”

The first point is heartbreaking and a mountain to climb. The second point is often true however big that income is, and despite the first point. “The lifestyle to which someone has become accustomed” is a phrase that disconnects completely from how that lifestyle is paid for. Even when there are masses of people living on less than you, our spending is often determined by the people who live in the bubble we live in. Bubbles have price tags, which either require someone else to foot the bill, or have real consequences for the available earning choices you have. 

The reality is that there is no one set of steps people need to take. There are trade-offs. There are hard choices. There is honesty required. Financial security and investment is a group sport. If those around you are spending freely, it is going to be difficult to build buffers and capital unless you are earning significantly more than them. 

That hard pill to swallow bears repeating. Half of all South African wage earners support about 3.5 people on less than roughly GBP165 or USD230 a month. 

Less than ZAR940 (GBP50 or USD65) per person per month.

Bears Repeating

Spending Discipline

Spending discipline is not just a personal decision. Choices have consequences. It is much easier to be “harsh” or stoic, if it is just you. The yogic idea of Tapas is the opposite of a holiday. “Tap” means “to be hot”, but the practice is embracing difficulty in order to gain comfort in it. Where the heat births inner strength. Holidays are normally where we release the pressure built up in a 5-day work, 2-day recovery cycle. Something we look forward to, and use as a reward. With Tapas it is in the other direction. You remove the pleasures and complexity, and when you return to real life you suddenly see the flavour and joy. 

Much of what we spend is habitual and deeply intertwined with our community. “Nothing kills an activist like a mortgage and school fees”. The more extreme measures of cutting back expenses (in order to build buffers of emergency funds and capital to support you in difficulty), become challenging when money going out is not a voluntary pleasure. Fixed expenses are things you no longer make decisions about. They just happen. Like living in a particular area because that is where the school or job is. Moving would have real consequences. Real trade-offs. So even when there are cheaper options, they are not your options. 

When you start the journey of financial planning by writing a list of how you spend, there will be steady outflows that are fixed and regular, and bursts that variable and voluntary. There will be items that feel like your choice and others that feel chosen for you. Every journey towards more autonomy and consent, starts with “where are you”. 

Write that list. See where you are starting from.

See the Value

One of the ways to gain control of your spending is to select where you place value. To find value in the plentiful rather than in the scarce. Spending is often a team sport, and changing your habits can be incredibly difficult. 

Like trying to become more vegetarian in a South African meat-eating culture. It is painless to change habits if the tweak feels better. If it is simple to make vegetarian food, and you enjoy how it tastes, it will be a smoother transition to eating less meat. If you feel like you are punishing yourself and being a martyr because everyone else is eating what you want, and you don’t like what is on your plate, it is going to be incredibly difficult. We get a quota of self-discipline, and if you use it all up in one area, it can explode in another. “Everything in moderation, including moderation”. 

Build changes to behaviour realistically, gradually, and sustainably. Planning is not about epiphanies. Break-through-weekends are followed by Monday alarm clocks and deep soaked patterns. To make real change, see the value in things that you did not before. Tweak your drivers and incentives. Deep, slow, conscious re-programming. The self-imposed limits stop feeling like chains because you experience the world differently. 

“Save more later” is an approach where the goal is not to adjust your spending up if your income goes up, or you get an unexpected boost. Where you snap the sense that life is better if you spend more, and spoil yourself because “you are worth it”. Reward yourself with the abundant. Put your money to work.

Changing Habits

Under Pressure

You can get into a situation where you do have a stable, decent, income, and yet are still not able to still the waves of money anxiety. Trapped with a big portion of that income servicing past consumption. Where you are not paying enough to get the hovering debt to shrink. Struggling for scraps to feed the beast. Cornered there, it is difficult to get to the point where “your money is making money”. 

Finding stillness requires both a source of income and control of spending. External forces make that difficult. The goal is shifting that challenge internally. Where you are the one creating the discipline. Limits don’t disappear, but you want their form to be your conscious choice. Where the boundaries are not “there is no money” or “I owe someone money” or “you must do this for money”. 

Where your money is available and working, and you can choose not to harass it or have it harass you. Where your money is capable of absorbing your shocks and stress in bad times. Where you are capable of repairing and building your capital in good times. Getting to this point, even with a job or stable business, can be difficult if you are under spending pressure from your own behaviour or your chosen community. You need to gain control of the collisions in your container.

Pressure through Collisions in a Closed Container

Necessary Friction

Building wealth is not purely about skills and knowledge. There is not a pure play meritocracy with a completely level playing field. The reality is we all have to eat, and that requires a degree of protection to be able to incentivize investing in skills and knowledge. With 7.7 Billion people on the planet, a pure meritocracy with no barriers would mean almost all of us would have to point out that someone is better than us at what we do. That means building wealth does require some friction. Some boundaries. Something to allow you to build an engine and vehicle completely detached from you. That can support you, and your community, without judgement of their merit. To still the waves of financial anxiety, you cannot constantly be weighing and measuring everyone. There has to be some independent commitment. That requires a level of self-awareness, seeing what your strengths and weaknesses are, what your community is, who your clients are, and understanding the market you are in. Developing skills that do not define you, but are transferable between different problems. 

 

Reply All

I have been lucky to work with awesome people. My colleagues are the part I miss most about a Corporate life, and the thing I am looking most forward to in the trade-offs of a return. You spend a lot of time with the people you work with. Those teams change. As time grows since my first job, it is interesting mentally going through the list of who I have worked with, and where they are now. The old adage of repairing a boat panel by panel, till you ask if it is the same boat. I once got a job as a waiter at a restaurant I loved eating at. Turned out management was awful to staff, and then switched on their smiles. The same can be true in “Reply All” slip ups, and emails forwarded without looking at the full trail. False smiles will out, and containers will change. I love being part of a team, but have gradually realised my real loyalty lies with the people I have connected with. Not the dynamic containers we were using at the time. Clients become colleagues. Colleagues become competitors. Competitors become colleagues. We are all connected, across time and through actions. Money is made in containers with barriers to entry and exit. We are not made in one container. There is always a bigger container that matters more, and will last longer.

You need boxes to move.

But boxes are not the point.

Spin the Coin

Waves of randomness batter individuals the hardest. Our best efforts can be swamped by chance, and the lotteries of birth – geography, genetics, community, time. Take a big step back, and you lose and gain information. Spin a coin once, and you have no idea whether it will be heads or tails with confidence. Spin it a million times, and if the coin is fair, it will be a hair’s breadth from half a million of each. One way to control for unwanted noise is to pool the risk. Let your fate be decided by the million spins, rather than the one. Be part of a group. To accept that, you must accept the cross subsidies. A Cross Subsidy is where one group of consumers pay a higher price, so that another group pay an artificially lower price. It is like splitting the bill. The question is when you will care enough about the container to be okay with splitting. If you intentionally had salad and water, you are going to be bitter about paying for steak and champagne. Understandable. That is different from voluntarily acknowledging the coin of life has treated you well, and chipping into the container of 7.8 billion individual spins. Even though you already know the result, and can pretend it is merit.

Social Capital

One part of the job search process I do not enjoy is CV writing. As someone who includes “Price is not Value. Salary is not Worth. You are not your Job” as one of his mantras, a CV feels very much like a boastful autobiography. Public Speaking is the best example of where everything works more smoothly when the focus is the content, not the person. When you speak passionately about something you care about, to people who care about it too. Magic. When it is a school oral in front of a class of bored 14-year-old ingrate inmates, no wonder people are scarred for life when they have to present. LinkedIn and Facebook partly solve this, with my tendency to think aloud and befriend strangers. Ideally, as you grow in your career, you are not starting from scratch. You are part of a community. Ex-colleagues, “competitors”, suppliers, clients, classmates and others in my (privileged) network turn it into a team effort. Like the compound interest of investing. Always worth remembering in whatever role you are currently playing.

Tough Crowd

Blerrie Complicated

PK and “The Power of One” created a vivid picture of overcoming struggle, and of Oxford and the Rhodes Scholarship, for me. Cecil John Rhodes casts a shadow over South Africa with a bloody complicated legacy (or blerrie complicated, as my Grandfather would say to avoid swearing). Which includes an Oxford-like university in Grahamstown called Rhodes, surrounded by places like King William’s Town, Queenstown (where my Mom was from, with family on both sides of the Anglo-Boer war), Port Elizabeth and East London, in the area where the 1820 Settlers arrived after the Napoleonic Wars. Smack in the middle of a 100-year conflict between the Xhosa Kingdom and earlier European settlers. Rhodes’ statue also used to preside over the Rugby fields, looking with South England ambition towards the mountains, outside my leafy residence at the University of Cape Town. I applied for the Rhodes Scholarship, but didn’t get an interview. I still ended up in Oxfordshire on a different path. Living just outside the city in a small medieval market town called Burford. A Buhr is an old English fortification. A ford is a river. Crossing rivers. Crossing continents. Crossing cultures. Unpacking blerrie complication.

Statue Removed, Shadow Remains

Path Dependent

Learning is path dependent. There is a real risk of Group Hypnosis on the path. Money and meaning are made in containers. Within constraints. With shape and form. It takes time and effort to build these containers. The things we care about, may be connected to things we don’t care about. Things we used to care about. Perhaps even things we think are wrong. We don’t get to pick and choose everything to be exactly as we want it to be. There are trade offs and concessions. We cloak the truth in a shared story or interpretation. There may come a point at which pointing out that the Emperor is wearing no clothes becomes worthwhile. Before that, it may be fine to have a naked ego maniac playing bossman if it doesn’t mess up the things you care about. When he suggests strip poker to take the things you care about, it becomes a little too obvious. Somehow, we need to detach and keep learning rather than defending our container. While still defending the people we care about in the containers. 

Given Time

I am not that interested in the first five years, if that is all that is on offer. I believe in compounding and foundation building. If you are living hand-to-mouth, neither of those factors are relevant. If you are simply being paid for the work you do, and that gets consumed. Money is made in containers. If you help build a container, you want to have a stake in that container. Ownership. The kind that exists beyond you. Real wealth is created over the long term. Through owning the container. Through owning the barriers to entry. Even fifteen years is short. Compounding is just starting to kick in. We judge ourselves over short periods like months, quarters, and years. What is your 100-year plan? What is your 1,000-year plan? What is your plan that has nothing to do with you?

The Cango Caves

Mad as a Potter

Somewhere in Cape Town lives a crazy potter named John. He is not hard to find if you follow the trail of creativity he leaves in his wake. He used to live (conspicuously) a couple of houses down from me when I was in Harfield Village. His dream was/is to bake some houses that would grow into a Creative Community. A group of people coming together to make beauty. Community building is hard. Even with passion. I also want to build a virtual Community of 150 people that pays Basic Incomes and builds a Community Wealth Fund. The challenge is who?, how?, and around what common fire? What happens when (not if) people leave? As we discard geography, race, class and other containers, how do we build new ones to support each other? In a world where tomorrow is very different from yesterday, what does a thriving us look like?

johnbauerart.com