Creating a confluence of success factors – new people equal new insights

If you don’t see new people you won’t see new things

-Anna Svahn, networking phenomenon, in my (Swedish) podcast “25 minuter” (link)


If you always see the same people, you’ll keep doing the same things, think the same thoughts, commit the same mistakes, miss important investment opportunities, and end up stagnant and disillusioned.

– Change your people, change your life.


I’ve written extensively before about the importance of perspective for both effectiveness and long term satisfaction, a.k.a. happiness (check out Perspective is gold, Long term satisfaction and Mentally challenged). Anna elaborates on a similar theme.

In my interview* with her, Anna explains how rewarding it can be to step out of your echo chamber, to be proven wrong and learn new things. Not least, she hits the nail on the head when recommending changing the five people you spend most of your time and energy on, lest your own situation and perspective will never change.

* it’s 34 minutes packed with insights about networking, efficiency, life rhythm, Tao, writing and much more. If you understand Swedish I strongly recommend you to listen to it on whatever podcast app you’re using, e.g., Soundcloud or iTunes #113.


The right people or the right place?

Successful people seem to repeatedly be right where they need to be at the right time. One explanation is that they know and regularly meet with the right people. Or is it the other way around; do they meet the right people because they are at the right place?

Create the situation you want“, is Anna’s answer to that. Among other measures she has taken, in order to broaden her perspective and gain new insights, she started having breakfast with inspirational people every Friday; first one-on-one and later in somewhat larger settings. The breakfasts are invitation-only, the guests are a secret and all kinds of documentation and social media have been banned. The rules ensure a free flowing conversation about anything from boosting start-ups to discussing investments, crypto currencies, or the weather for that matter.

These breakfasts are as simple as they are ingenious. Start by asking a friend from Facebook or Linked in, or a colleague from a different department. Use the first breakfast to brainstorm who else you could ask. Expand from there. Before you know it you’ll have created a vibrant micro community of idea creation that can lead to if nothing else a healthy dose of brain activation and fun, but more likely also to great ideas about personal growth, investing and adventure.


Don’t trust chance – create your own

My own life and career consists of a long chain of serendipitous events and a confluence of somewhat unlikely factors. I was always more likely to end up like the meth cooking chemistry professor in Breaking Bad than heading the European hedge fund of the decade and later an appreciated blog and podcast, but luck and grit happened to take me on a different path. Anna Svahn, on the contrary, is exactly where she wants to be and she just turned 25 years old this summer (2017).

Svahn has deliberately created her own confluence of synergistic factors of people, environments, habits (though she calls it rhythms) and activities, whereas I blindly stumbled from one lucky break to the other owing most of my successes to pure grit and a slightly asocial personality (not being invited to the cool kids, not giving a damn, hiding in science and symbol manipulation).

Next, I’ll write an article on how my being a bullied loner and a nerd from out of town tied in with computers, programming, mathematics and being tired of school to put me in the perfect time and place for using the dotcom bubble to catapult my career. I was lucky to have the right skill set and lucky to have the right calibration regarding stock market valuations for my two decades as a finance professional.

I’ll also describe my development from a die hard “Discounted Cash Flows Are The Only Theoretically Correct Way To Value Companies” advocate, through “Technical Analysis Dabbler”, via “Earnings Reports Are All Important” evangelist and “Relative Growth Rates Rule” missionary and a few other of the ways any investor is bound to get lost. My view these days on DCF, TA, trend analysis etc. is too complicated to explain in anything less than a short book, but that’s coming sooner or later.


A blueprint for success – creating your own confluence of serendipitous factors

IT legend Roger McNamee (listen to the interview in Superinvestors #18) has provided a blueprint for how to create your own confluence of people, activities, environment and grit in any new and exciting sector. He toured for a year, if not more, with the people who were creating the new IT industry. That’s how he saw more clearly than anyone else what companies and what people would succeed, go under, get acquired, get funding, should get funding and so on.

His blueprint is exactly how I have tried saying you should cover developments in blockchain technology, quantum computing, robotics, electric engines, battery technology, AI and so on. That is, if you care about achieving a leading position in an exciting and future oriented field.

Applying the blueprint in practice

Start by reading the basics, then sell that knowledge to public and private organizations as a consultant. Keep learning more about the tech itself, as well as what your prospective clients want or need – both from your meetings with them and through external sources. Not least, keep talking to all and any industry representative you can get hold of. Call them, interview them, go to conferences, travel with them. NB: remember to provide value at all times; ask them what you can do for them. “What do you need? What do you lack? How can I help you?”. Keep notes in your commonplace of people, companies, sub industries, sector convergence and divergence etc.

In one year you’ll know more than any industry analyst or CEO about the key players, key technologies, key developments, most lucrative investment or employment opportunities. Contrast that with studying books and articles on the internet alone for a year, trying to understand the ever changing flows of a new industry without talking to the people shaping the development.

So, take a leaf from Anna Svahn’s and Roger McNamee’s books, and test drive all electrical cars you can, talk to e-car owners, talk to local politicians (about regulation), call e-car sub-suppliers and battery start-ups to gauge demand and technological developments, ask for or make your own calculations regarding Tesla’s cars (do the numbers add up regarding weight, power, range, charging times, manufacturing cost and so on).

Or, why don’t you buy a few toy robots, learn some Python and re-program them, talk to toy store purchase managers, visit robot manufacturers, try your alterations on your or your friends’ and their children. What works and what doesn’t? What are the manufacturers, innovators and stores missing?


Conclusion – listen to Anna Svahn and Roger McNamee and change your settings to change your life

  • Listen to my interview (#113) with Anna here
  • List the people you spend your time and energy on
  • List who or what kind of people you’d like to see more of
  • Change your daily habits in order to interact more with inspirational people and less with homeostasis dwellers
    • stop eating lunch with the same colleagues at the same place
    • change gym (or talk to new people about new things at your old gym)
    • watch less TV or aimlessly surf the net, and schedule IRL (preferably non alcoholic) activities with inspirational and ambitious contacts you’d like to know better

 

The covfefe lemma: How to choose between Time and Money

Topic: The covfefe choice between time and money

Summary: no 25-year old would trade places with Warren Buffet, but where does one draw the line?


Inspired by an interview in Framgångspodden, and several articles and tweets by Wall Street Playboys, here are some of my thoughts regarding time, money, retirement and the meaning of life.

I was 42* when I retired with an 8-figure net worth in US dollars. 42. By then I had read the Hitchhiker’s Guide To The Galaxy more or less once a year since I was 18. So, 24 times, give or take. 42 backwards**.

*actually I said the magic words a few days before my 42nd birthday, but I stayed on a while longer as just the Managing Director without any portfolio management responsibilities, thus retiring at the age of 42.

**”42″ referring to Hitchhiker’s Guide To The Galaxy as The Answer


Time isn’t money; time is covfefe everything

Life Utility Function: Optimize your amount of quality time

Quality time: Time spent doing what you want, what’s rewarding, what’s meaningful, what doesn’t subtract too much from your health account, or -if possible- what adds to your life span without being too tedious.


There are a few minor snags here. For one, I don’t know when my life will end (accidents, genetics, technological breakthroughs, lifestyle). Second, I don’t know what my current wealth will afford me in the future (return on capital, money paradigm, war, disrupted status quo).

Did I say “minor” snags? I meant major. In effect, it’s impossible to make any useful predictions so any solution will be highly subjective. Here is mine:

Choose something interesting to do; the most interesting and worthwhile undertaking you can think of for both you and others. If chosen wisely you will optimize your income, while still enjoying yourself and feeling relevant.

If your line of work is weighted more toward making money than being truly rewarding, quit (at the latest, but typically sooner) when you have 5-10x the amount you think would sustain your lifestyle for the rest of your life given a status quo economic system.

Why 5-10x?

Because once you have 1-2x, increasing that by 2-4x  only means keeping your momentum going for another 5-10 years or so (less time left means you don’t need 5-10x the 1x amount from 10 years earlier), and that extra buffer can make all the difference once you get off the machine (in case it proves difficult to get back on).

With 1x you have no disaster buffer. With 2x you can support one other person if needed, but still no buffer. With 4x you can diversify your assets between, e.g., stocks, bonds, gold etc., and still be okay even if war strikes, stocks crash, the money paradigm changes, or similar non-linear changes take place. With 8x you can do the same for one more person that lacks funds.

I’m not at all advocating aiming for 5-10x the wealth you need, I’m saying any sane person should stop making money at that point, unless it’s the most meaningful use of their time they can think of.


It’s my time now

When I was studying or working I had basically no time of my own. It all went to following orders or templates, going to meetings and doing things for others… for money. I didn’t read a single piece of fiction for years during that time. At first I did it because everybody did it. Then I did it for the money and to prove something. Eventually I did it out of loyalty (and maybe, by the very end, a little greed and/or homeostasis). Owing to growing tired of my Ferrari and Lamborghini, as well as a very disappointing test drive of an Itama 55, I realized I didn’t care for stuff. I realized sleep, health and my time (which are all facets of the same underlying concept) were what I valued the most.

I’m not interested in clothes, cars, watches, boats or conspicuous real estate. I simply enjoy making my time meaningful, which for me entails reading books, listening to podcasts, talking to interesting people, learning, writing, playing with my dog, and occasionally using my body for something breathtaking, for exercise, for partying our dining out with friends.

That’s basically it.

I really don’t need more than 30k USD a year (including the condominium fee), or let’s say 1m USD at 3% yearly interest, to sustain my lifestyle. Thus 10m is plenty — in particular assuming I can get more than a 3% return on average over a very long time, not to mention slowly chipping away at the capital.

However, if you can’t reasonably quickly get to several times the wealth you would need for your desired lifestyle, you should focus on optimizing your quality time right away.


The College-Buffett covfefe equation

Unless you’re mentally ill, are afflicted by an extremely expensive disease, covfefe, or very, very poor, if you’re in your college years you would never trade places with Warren Buffet, despite his 100 billion dollars to his name (74bn, according to Forbes). The reason for that of course is that he’s turning 87 this year and most likely doesn’t have more than a few years left to live.

Where do you draw the line?

Would you trade being 25 with 10k, 100k, 1m to your name for being 45 with 2m, 5m, 10m? How much are your 20s worth? Your 30s? Your 40s? Your 50s? What if you were 90 years old and about to die; how much would just 1 more day of quality life (as if you were 25 again) be worth? 1 million, 1 billion? The answer is, I hope: all the money you could ever scrape together no matter the amount.

I’m fully aware we all have different utility functions, and some are hopelessly stuck in a kind of competitive KUWTJ mode (Keeping Up With The Joneses, i.e., trying to outdo your peers for no other reason than outdoing them). It doesn’t necessarily make their lives less enjoyable and meaningful. They might get just as much serotonin, dopamine and oxytocin as I do (though I doubt it). What’s important is to think about it, really think about it, and optimize along the right parameters, rather than merely living reactively and driven by homeostasis.

Is it really worth it, slaving away with something you don’t care for, in order to fit in, in order to buy better suits (for the work you don’t like anyway), a better car (to show off for “friends”, neighbors and clients) etc.? Have you thought it through? Have you compared the years you’re giving away to others for the (few) years you leave for yourself later on when you’re older and less agile?


An eye for an eye, a year for a year

Who’s that extra year for? Who’s that extra wealth for? If you’re proving something (like I did), or seeking revenge for a poor or unjust upbringing, for whom are you doing it?

I’m not saying “skip college”, “drop out”, “quit your day job” to hitchhike around the globe, living hand to mouth. I’m asking you to make an informed choice between spending one more year doing what you’re doing (mostly for others rather than for yourself), and using that year for something you really like, and would do without having to tell others about it.

I had the luxury to come into enough wealth reasonably young without even thinking about it. I also had the luck of understanding the choice outlined above and quit in time. I understand the lure of riches, luxury and conspicuous consumption, and how difficult it is to fathom their uselessness unless you’ve experienced it yourself. Thus, I urge you to try it if you think you want it, but I’m also asking you to make an effort to back out quickly once you realize time, action and community are more important than stuff and theatricals. In the coming era of automation and cheap energy, material wealth could soon become moot anyway, as Peter Diamandis alluded to here:

“The son or daughter of a billionaire in New York, or the son or daughter of the poorest farmer in Kenya, is going to have access to the same level of education delivered by an AI, the same level of healthcare delivered by an AI, or intervention delivered by a robot. So, we’re going to start to demonetize all the things we think of as the higher stakes of living,” he said.


Summary: the covfefe lemma

So, at what extra unit of material wealth vs. one less unit of time do you draw the line? Where is your so called covfefe point, where you wouldn’t trade more time for the amount of dollars you can add per unit of time?

Would you trade going from 35 to 40 years old for going from 5 million to 12 million? From 40 to 60 years for going from 12m to a billion? Try making a chart with your NWE vs. age for all ages 15 to 100. The amounts should be such that you on balance wouldn’t, or just barely would, want to skip forward 5 years to get to the new Net Worth level.

Bookmark this page, share it, and subscribe to stay tuned for more of my musings on life, money, technology and financial matters. You’ll get my free e-book about my time at the European Hedge Fund Of The Decade too.

How hard can it be? Consult on Blockchain/Bitcoin

Executive Summary: How to make money consulting on Bitcoin and Blockchain technology

Two steps: 1. Learn it, 2. Consult

Article length: 338 words


 

There is a way, do you have the will?

Hardly anybody knows anything about Blockchain.

That leaves huge room for you to make money.

bitcoin

If you’re reasonably intelligent and used to learning things quickly through deep focused work, you should read up on Bitcoin/Blockchain, package a convincing offer and start consulting. 20 hours of preparation is plenty in this context. Then you’ll learn enough to become a true expert over the following 100h.

I think most organisations, authorities and companies need (and want) to understand the technology. In addition, I’m certain they’ll soon start budgeting for training their employees.

So, what you need to do, if you want to make money and become an expert in a very hot area, despite lacking an education, is this:

  1. Learn about Bitcoin. You could start by reading Princeton‘s recently released free text book on the subject (perhaps “Princeton” is enough to make you see this is a highly lucrative area, or soon will be)
  2. Create a clean and fresh website, and demonstrate your knowledge (it will become clear after reading up on it)
  3. Create a few template applications and offers, i.e., ideas of how and why your local start-ups, your multinational HQs, your municipal authorities, politicians, police etc. should use knowledge about the Blockchain technology (you should be able to do this after bullet 1. above)
  4. Demonstrate a pedagogical streak, through extremely clear, as-to-a-child, infographs and examples, that scream to decision makers that they need to hire you to explain:
    1. Why it is important
    2. What you can use it for, or risks you want to avoid

 

There, free advice for you or that unemployed friend of yours (share the article!).

Consulting on Bitcoin is basically free money.

Have you signed up for my free newsletter yet? No? Do it now and get my e-book “The Retarded Hedge Fund Manager” for free.