Get the Game

Stilling anxiety and making decisions we are comfortable with can revolve around building agreements. Managing expectations through commitments to each other that are understood. An ability to build driven by confidence in intended consequences, and capacity to absorb and adjust to unintended consequences. A calm and inspired sense of general direction. 

If you feel like you “get the game” so you can apply yourself and get rewarded, and have a transparent understanding of the cost of breaking agreements. A world where there is consensual agreement making. Yes means yes, and no means no. 

People feel like they are honest with each other and themselves about what their needs are. Where people find other people who willingly and enthusiastically want to be part of each other’s lives. Where no one is forced to act against their will. 

The challenge is tolerance. We don’t live in isolation. Independent decision-making is very attractive. In your world, what do you think you should do? That results in multiple, very detached realities, that sit separately from the shared world and aren’t a part of it. That has consequences. 

A difference between an investor who makes independent decisions and an operational decision-maker, is operations have momentum and they have mojo (the morale of people). Changing an investment decision affects no one. Changing an operational decision has consequences, and you can never get momentum and start compounding if you are constantly changing your mind.

Do you get the game?

No for Now

One way to pay for a Universal Basic Income would be to build up the capital to dedicate to it. 

That is true of everything. Not all good ideas are good business ideas, but you can pay for good ideas that can’t pay for themselves. Our spending choices are seldom made in isolation. There are trade offs. 

This is why it is so hard to build up capital when immediate needs are forced decisions. Many people borrow for emergencies because they have no other choice. They can’t afford to wait. This means they end up paying more than they can afford, because the price includes interest. If they couldn’t afford to pay upfront, they may struggle to pay the loan off... so they can end up paying interest on interest. They can’t afford to wait OR to borrow. 

Each spending decision is not simply about whether you want the thing or not. Spending decisions have consequences. If you open one door, what door does it close? Broad Framing is the abilty to stand back and evaluate your decisions in context. Saying, “No” to one thing may enable you to say “Yes” to another thing that is more important to you. 

Being able to hold onto things that are important in the long term is one of our biggest challenges. Giving equal weight to our future selves. Building capital is a cost effective and powerful way to prevent forced short-term decisions... if you can fight off the short-term decisions that stop you from building capital!

Tristan da Cunha

The World's most isolated island

Decisions are not made in isolation.

Bewildering Respect

Starting rich is a safety net. Not all safety nets are viewed the same. 

A lot of Government safety nets come at the cost of respect. They are the opposite of a job interview. To get help, you must prove you need help. With a job, you know there are limited vacancies, so you are proud they chose you. To get help, you prove you cannot self-sustain. That is a belittling acknowledgment to make. 

When we look at other people’s problems, our advice is autobiographical. We look at their problem with our whole picture. With our capital, our knowledge, our skills, our experience, our way of seeing... but I am not you. You are not me. 

Watching a participation play where the actors take suggestions can leave the audience frustratedly correcting and recorrecting as no decision plays out as if they were acting. I even ended up as one of the characters, “let me have a turn”. Even then, you are just one of the participants and many decisions are team efforts. The decision you would make in that situation would not be the same, because you would not be you in that situation. 

I find seeing real poverty humbling because it strips away how much credit I give myself for my own personal merit. It strips away vast chunks of the justification for why I am as fortunate as I am. It leads to a re-evaluation of thorny ideas like white privilege, civilizing missions, and unintended consequences. 

It leads to bewildering respect for people in their worlds.

Nothing Else Matters

It isn’t only the idea that matters. It isn’t only your merit that matters. Liquidity (enough to cover immediate needs) and Solvency (you have more than you owe) are cornerstones that carry anything with potential value through the chaos. 

Liquidity recognises that the short-term can swamp and swallow true value. If you think of true value as what would happen if everything went according to plan, and everyone saw the world as you do. 

Solvency is what lets you carry on carrying on, for a chunky period of time. 

If you aren’t being creative in the long-run... Liquidity and Solvency won’t save you. What they do do, is prevent you from being forced to make decisions. 

If “No” is not an option you have, the forces of supply and demand will eat you alive. Desperation is blood in the water to sharks. If you have to buy, at any price, the price will go up. If you have to sell, at any price, the price will go down. 

Value is almost meaningless in a pressure cooker. If one thing is so important, that nothing else matters... you won’t be able to see, hear, or feel anything else.

Shark's Eye

Feeling Decisions

Free will exists. It is just incredibly hard work. Free will is not simply deciding. It is training yourself to decide. It is creating the environment where it is possible to decide. Where your decisions are not forced. Where the constraints within which those decisions are made are chosen, dismantled, or changed consciously. 

Computers don’t know what the 1s and 0s mean. They just apply the algorithms, and something happens. If there is a glitch... a coder has to consciously find it and change it. For that to happen, they have to become intimate with the code. Open it up. Unpack it. Understand the steps, consequences, and connections. 

The further decisions are from consequences, the more information is lost because of oversimplification, and the length of time till feedback is felt. 

This is David Attenborough’s case for biodiversity as a response to climate change. Increasing the capacity for local reaction. Feeling decisions. The ability to adapt to conditions rather than the monoculture of distant central decision-making behemoths. Building flexibility and firebreaks for when (not if) things go wrong. 

The unintended consequences of big decisions may have conspicuous results, but they often hide until it is too late. Free will requires you to pay intimate attention, and do the work.

Maintaining Firebreaks

Decision-Makers

Joint decision-making is complicated. We make mistakes when we make our own decisions. They are our mistakes. They reveal information about our habits, values, character, drivers, desires, fears, knowledge, ignorance, and personalities, but they are also wrapped up in noise. 

We are complex and inconsistent. If someone else is going to make decisions for us, the further they are away, the less they will see the consequences and responses to the decisions they make for us. Central Decision-Making scales both impact and mistakes. 

If you look at the typical democratic political process, the issues are incredibly complicated when it gets to elections. How many people read and engage with the manifestos of the politicians, and grapple with what they are promising? How accurately does the manifesto reflect their intentions? Their ability to deliver? 

If you wrote your own manifesto, how closely would that reveal your real behaviours... or would it (more likely) reflect a promotional version of what you (in your head) want? 

Information gets lost as you add distance between decision-makers and consequences. Ideally, in local markets, small decisions can be made that reflect the stuff we can’t even put into words. There is relationship building. There is understanding. There is the ability to adapt. 

As soon as markets scale with central decision-makers, they become abstract. People become categories. Voters become power bases. Actions have consequences. It is important that decision-makers feel those consequences.

What we do, matters

Place to Sleep

It is not a mystery why there is not enough affordable housing. We have not built enough houses. There has been a multiple decade-long process of urbanization and population growth. There are not enough houses in the cities. 

More specifically, there are not enough houses close to the quality jobs and quality schools. Houses get smaller. Prices go up. Borrowing is provided to people to buy (if they can prove they have an income to support interest payments) which means more money chasing the same physical buildings. Interest rates are lowered so that borrowers are subsidized, and savers are penalized. 

Those holding cash have a wasting asset, being paid almost nothing for their savings, so that those borrowing that cash can inflate the cost of housing. The idea of borrowing to buy with 30-year paybacks matching our working lives, and tied to earnings, is as natural as breathing. We lend to people who can prove they don’t explicitly need the money. We lend as front loading of work-for-pay income. 

People who have bought property have seen “growth” for such a long time, we collectively think of homes as “safe as houses” investment. We are all forced buyers of somewhere to sleep. Whether we rent or buy. We can see the bricks and mortar. So the cycle continues. If we want to bring down the cost of housing, there need to be more houses. 

That would bring down the price of those with houses as investments.

Sleep

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.

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

Being Forced

You can put a price on anything. That is not the same as, you should put a price on anything. A price is just a number used to communicate an exchange. One person gets the money. One person gets the thing/service. A fundamental rule of wealth creation is “Don’t be a Forced Buyer. Don’t be a Forced Seller.” But saying something is a rule doesn’t make it a reality. Like saying something is a human right doesn’t magic the resources/ behaviours/ agreements for that right into something more tangible than words. In order not to be a forced buyer or seller, you need your yes and no to carry weight. The weight of the knowledge that you will be fine whatever the outcome. The power of the ability to choose from multiple options. The minute you are in a corner, then others will have the ability to put a price on anything you have. You can’t build wealth in a corner. 

Never a Forced Buyer be.

Never a Forced Seller be.

Choosing Decision Makers

To outsource your decision-making, you need to develop trust. I like to believe in a world where we can have open conversations. The reality is that you can’t just decide to be honest, and vomit truth on someone. Truth needs unpacking. Trust is built. Both need time. It is dangerous to outsource decision-making, in part because we attach responsibility to the decision-maker. We attach identity to the decision-maker. We attach respect and blame. To outsource decisions, you need trust and confidence. Trust that the other decision-maker has your best interests at heart. Confidence that they have the competence to do what it is that they claim they will do. The decision about who to hand over responsibility to, is as important as the actual skill and knowledge required to make the relevant choice. Evaluating decision-makers is a skill in and of itself. Badly evaluating decision-makers allows you to pass on responsibility, and have a target to pin blame on should things go wrong. It does not solve the problem. 

"The Scapegoat"

William Holman Hunt (1854)

 

Hating Hierarchy

One of the ways that money is made is scaling up by doing the same tasks repeatedly. What that can result in is this is mono-culture. Which is dangerous. David Attenborough's witness statement shows aerial pictures of oil palm plantations where it looks green, but there is no life in it. It is just one decision laid out. That is dangerous. When you come to free will, there are levels of consciousness. Not everyone wants to be making decisions all the time. It feels good to nail a process so well that you are flowing. Complex decision-making is often far from flowing. Some people are more than happy just to do what they are told. That is okay. I have a friend who loves being micromanaged. It means he can be super productive because he knows what to do. And if he doesn't know what to do, someone will tell him. He just gets on with it. I hate being micromanaged. I hate someone telling me what to do. I don't like hierarchy at all. I have always had a chip on my shoulder about hierarchy. To the point where it has resulted in me being arrogant/childish. 

Central Decision Making

Decisions have Consequences

“The Man in the High Castle” looks at what how the world would have been like if the Second World War turned out differently. If Germany and Japan had conquered America and the rest of Europe. Even that kind of scenario (where we have a clear historical story of good winning out over evil), there were still moments of joy that happened in that alternate universe, that wouldn't have happened otherwise.  

Part of autonomy and consent is that decisions have consequences. Choices and events open up, and close down, histories and futures. Making peace with this idea that we have different options is a challenge. With an intricate web of ripple effects. What we do matters. To us and to others. 

I do not believe in pure equality. That is not autonomy. It would strip the world of its complexity, ambiguity, and randomness. If everyone had exactly the same experience, we would be controlled. It feels like that would be fair. But it would restrict us.

Intricate Web of Decision Making

Someone Else's Box

Wealth is created in boxes. How well do you understand your box? I heard the term “option counselling” for the first time yesterday. Everyone has vested interests, which means the idea of “independent advice” is a bit of an oxymoron unless you are a fully detached yogic master. As Austin Kleon points out, “all advice is autobiographical”. Option counselling aims to explore choices, without influencing the decision maker one way or another. It shines light on *someone else’s* box. Exploring their obstacles and paths. Exploring their choices. A key to making empowered choices is acceptance. All journey’s start from where you are, and none of us are in the same place.

Building Support

A good idea is not enough. If you are deciding to invest in a company, you do not just look at their product pitch. As important are solvency and liquidity. Solvency recognises the fact that what you see is not the full picture. Add up the value of everything the company has (Assets), and subtract everything they owe (Liabilities), and what is left is closer to the truth of what is supporting the idea (Owner’s Equity). Support is the unsung hero that makes potential sing. In a crisis situation, price and value can disconnect dramatically. Which means if most of what you see is liabilities, the price of what the company has can evaporate. A fundamental principle of wealth creation is not to be a forced buyer or a forced seller. If you put yourself in a corner, you are no longer a decision maker, and your “good idea” will get you nowhere. Liquidity is the same principle, but clear and present danger. No one sees long term potential if current expenses cannot be paid. What is true for companies is true for people. To see each other’s potential, we need to build capital and buffers. To lift our eyes from hand-to-mouth living and crisis-to-crisis survival. To empower good ideas, you need to support decision making.

Compounding and Noise Reduction

Wealth creation is path-dependent. Rewards escalate and attract resources. Most decisions are made independently of each other. This is both a feature and a flaw. Ignorance allows focus. We have limited capacity and sloppy memories. We cannot scale up our way of thinking to 7.8 Billion people, nor should we. We die, and new ways of seeing grow in the soil of our deep soaked biases. Central decision making is a strong candidate for the cause of the world’s biggest mistakes. Empowered decision making allows multiple perspectives to chip away at our challenges from different angles. We need to learn and apply every day. Asking better questions. Making better choices. Compounding our good decisions, but making different mistakes that cancel each other out. Unpacking the past. Building the future. Creating the capital and containers required to see our skills and knowledge. To see and hold space for each other, and for different paths.

Don't Compound Noise

Decision Maker with Money

My first job after university was in Risk Product Development. My focus area was Earning Ability. Money is made by solving problems for decision-makers with money. In a hand-to-mouth economy, without capital-backed decision-making, you only get to make decisions on how to spend money if you have earned it from another decision-maker. First, you have to find a job. Then you have to do a job. Then you gradually get breathing space if you get paid more than you need to spend. When you venture into the land of discretionary (by choice) spending. Then you can either consume that money or put it to work. To start, you are at risk. Unless you have someone to turn to, there is the danger that something goes wrong, and you cannot work. Something goes wrong, and you cannot do your daily tasks. Something goes wrong, and you cannot do the work you were trained to do. Or you cannot do any work. The question “How much capital would I need if I couldn’t work?” is the starting point for the target size of the Engine you need to make your own decisions. Until then, something might go wrong.

Three-Horsepower Engine

Space for Choice

I am trying to think of a gender-neutral word for emasculated. Disempowered does not feel visceral enough, and disemboweled is, I admit, too extreme. I also do not like being infantilised or micro-managed. This distaste for hierarchy is not a dislike of rules. I really enjoy clear decision-making processes and agreements. A perhaps strange combination of a rule-abiding contrarian. Seeking permission sucks when you are the one who has done the work. I have no problem with other people making different decisions to me. What I like is space. Space to make imperfect choices, and space for others to see the world differently. Where accountability and authority live together, with honest acknowledgement that we are all making it up as we go along. A great part of being an adult, is tolerating and dealing with your own mess. Building your own process. Owning the fact that decisions have consequences. In positive and negative directions. Making agreements, and making decisions within those agreements.

Forced Decisions

Never be a forced buyer. Never be a forced seller.

Price is supply and demand. If you must buy something, no matter what the price, that is dangerous. That is no longer a consensual exchange. Consider walking away if a sliver of that possibility exists. If you can find a way to create breathing space. Detachment at that level can feel impossible. You might, correctly, feel that it is your most important decision. It is a difficult thing to sit with, but nothing is so important, that it is more important than everything else. Certainly, nothing with a price.

The reason to build buffers, the ability to endure, and practice detachment, is so that you do not get yourself into that corner. Poverty puts people in a corner. Poverty is a form of scarcity that reduces the available options, smothering empowered decision making.

"Unequal Marriage" Pukirev

A young girl forced to marry against her will

Human Voice

“Poverty is not a lack of character. It is a lack of cash,” points out Rutger Bregman. Two fundamental principles in stilling the waves of money anxiety are (1) Never be a Forced Seller, and (2) Never be a Forced Buyer. Avoid being put in a corner. Get yourself in a position where you can say yes, or no. Become a decision maker. Price is not value. It is a way of listening to supply and demand. Adding force or scarcity is a way of price swallowing value whole. The key source of force is basic living needs and unexpected emergencies. Things you cannot say no to, that stop you from building or breathing. To avoid force, you need to snap the hand-to-mouth connection of depending on your earning ability. Overcoming any debt traps, then building an emergency fund of cash. Gradually putting money to work, and building your lung capacity. The breath to say no. Price does not listen to those with no voice.

Spectrogram of the Human Voice