Add Time

Micro-ambition is the idea that we should have very small, very achievable, goals that add up. Sustainable change starts from where you are. Sustainable change compounds. Far more important than grand ideas is a real understanding of what is going on. An acceptance. An awareness of what the options are. Working on your Endurance is always important whatever happens. For change to compound, you need to ensure you stay in the game. Working on Resilience is always important *for* whatever happens. Any plan is made without knowledge of a future that is complicated, ambiguous, and random. An approach to micro-ambition is to develop a Creative Daily Practice. Always be learning. Always be doing something of value. Then add patience and time and the magic will happen.

Work Your Marshmallows

There is a psychological experiment where they test children’s capacity for delayed gratification. I name my Financial Freedom strategy after it. Multiplying Marshmallows. In the test, a child is offered one marshmallow now, or if they can sit and wait, two in a little while. Patience multiplies marshmallows. The same is true of the difference between hand-to-mouth living, and investing the gap between your hand and mouth. Consumption fires your money. Investing puts it to work. If you are able to invest 50% of a stable income for 15 years, and that money earns 5% real return (50-15-5), the Engine you build should be able to continue paying that stable income forever (if the Engine continues to earn 5%). Eat one, invest one. Live life. Build life.

Old Scripts

We speak too quickly for each word to be a conscious choice. The stream that bursts from us comes from deep beneath the surface. A reaction from within. We recognise the situation we are in from situations we have been in. From situations that have repeated themselves into our muscle memory, or burnt themselves into us through sheer force. Seeing things from other people's perspectives is so hard, in part because we haven't had their experiences, but in part because it is so hard to "unsee" what we have experienced. As the experiences soak in, we can forget them but they don't disappear. Accessing the scripts that drive us requires patience. It requires calm. It requires doing the work. This is why honesty isn't just letting down barriers. It is also making time. Understanding can't be forced.

Old Scripts

Magic Time

Derren Brown debunks magicians. A lot of things seem like magic. Things we don't understand. British Science Fiction Writer Arthur C. Clark famously said, 'Any technology sufficiently advanced is indistinguishable from magic.' The way Brown debunks magic is by showing that he is able to perform the same tricks.

Derren Brown

I believe investing is the same. There are no magic tricks. The key things in your control are (1) how much you spend, and (2) how much you invest. How much you start with, get given, earn, or how much your money earns are much less under your control. Seth Klarman said, 'The real secret to investing is that there is no secret to investing. Every important aspect of value investing has been made available to the public many times over, beginning in 1934 with the first edition of Security Analysis. That so many people fail to follow this timeless and almost foolproof approach enables those who adopt it to remain successful.'

Most of the stories we hear are about the big successes and failures. Stories on the edges. The majority of us need to deal with reality. Not magic. Do the research. Find out what your options are. Find out what you need to do to increase your number of options. Pick one. Make a plan. Surround yourself with people who can help you stick to your plan.

I believe in building Engines. An Engine is something that can earn more than you spend. An Engine is something that can free you to make non-monetary decisions. That takes time, not magic. Time is the only magic I believe in. There is no short-cut. It takes delayed gratification, discipline, calm, and patience. Engine Building is far more about Emotional Intelligence than being book smart.

Huge returns are mostly luck. You can't plan for that. Epic failures are a lot easier to plan for. The best investment strategy is to avoid being stupid. Howard Marks said, 'When there is nothing particularly clever to do, the potential pitfall lies in insisting on being clever.' Once a solid plan is in place, normally the best thing to do is nothing.

The strategy I support is a 15-year plan. If somehow you can get your spending under control, so that with discipline you can match dollar-for-dollar what you spend and what you invest, then you will be well on track. What that investment earns is much less under your control. But, if it is in a vehicle that is left alone, I don't think 5% (after all expenses) is a completely unreasonable long-term goal. If you are lucky, a little more will shorten the time required. A little less will lengthen it.

If you are able to match your spending for 15 years, and your investment earns 5% a year after expenses, you will have a powerful Engine.

Invest 50%. For 15 years. At 5%.

50-15-5

This is not magic. Although the results are magical.

Training my Elephant

I spend a lot of time in my head. If you are like me, it is noisy there. More a committee than a voice that makes sense a lot of the time. Often quite harsh. I started Yoga about 9 years ago. The point, I was told, was to still the waves of the mind. Basically, to ask the committee to take a tea break every now and then. I like tea breaks. This sounded like something for me.

I came across the metaphor of the Elephant and the Rider in one of my favourite books of all time. Jonathan Haidt's 'The Happiness Hypothesis' is a wander through the history and current thinking around well being. Other books like 'Thinking Fast and Slow' by Daniel Kahneman, 'Blink' by Malcolm Gladwell, 'Focus' by Daniel Goleman, and 'The Art of Learning' by Josh Waitzkin all touch on a similar idea.

We tend to identify with our Rider. The Rider tells the story of our lives and explains our behaviour. The truth is that it is really the Elephant that does the doing. The Elephant may go right or left at the command of the Rider most of the time, giving the illusion that the Rider is in control. The Elephant just wants to do the same thing on those occasions. The Rider has no ability to make the Elephant do something it doesn't want to do.

The Rider can, with patience, train the Elephant. The Elephant is in fact far more powerful and intelligent than the Rider. The Rider is slow, deliberate, and forgetful. The Elephant embeds knowledge. To change what the Elephant knows and does takes time, patience, and attention. Rather than justifying or excusing your Elephant, the first task is to observe it. To understand it. To not take the credit, or the blame, for everything it does. Realising that your Elephant actually understands a lot you don't. Then you can tweak and teach, with humility.

Step one is realizing you are not the committee in your head. Give them a tea break.

Hard to Find

Now breathe

Should love be hard? There is an irony in that the harder you try, the more difficult it is. I know I am not the best version of myself when I care too much. Yet I value the part of me that cares deeply about things. Detaching feels like not caring. I also think all relationships - friends, colleagues, family, and intimate relationships - do require a degree of hard work. Love is hard to find. You have to be willing to put the work in. To rewire yourself. To chip away at obstacles that stand in the way. To be patient. Hard can be beautiful. On top of all that you do need to detach. Detaching doesn't mean not caring. It means caring enough to look after yourself. To breathe into the relationships you are working on. To give them space. 

Force

If I had to pick only one rule for making sustainably successful investment decisions, it would be 'Never be a forced buyer or seller'. Although we create false deadlines and emergencies to inspire action, these are seldom truly genuine if you dig deep. The ability to create space is essential for perspective. Perspective is essential to make decisions that take into account as much information as possible. It widens the frame from false do or die binary options. It gives space to include things that can't be counted. Things that can't be summarised. Things that can't be explained. The best decisions are tiny nudges made with patience, care, and humility. Tiny adds up. Don't force it.

Actionless Action

Swimming with, rather than against the currents. It is not a fight. There is no trying. Letting go of ideological demands of where we want things to be. Accepting where things are. Not passively. Seeing and responding to the true demands of the situation. Taking the steps that are natural, easy, desired, and inevitable. Flow is the point of engagement where we are pushing ourselves, but not anxious. It comes with engagement, curiosity, focus and connection to things as they are. It comes with a release of awareness of our self-conscious separation from what is going on around us. 'Through gentle persistence and a compliance with the specific shape of a problem, an obstacle can be worked round and gradually eroded.' (Wu Wei - The Book of Life)