Modern Wisdom - #269 - Richard Meadows - Optionality: How To Make Your Own Luck In Life

Episode Date: January 14, 2021

Richard Meadows is a journalist and author. Life doesn't come with an instruction manual. How to organise our lives to be efficient but have options, to be take advantage of routine and enjoy variety is one of the hardest balancing acts we face. Expect to learn why you should earn as much money as you can when you're young, how to make life changing choices under uncertain conditions, protect against financial disaster, develop a system to create our own luck and much more... Sponsors: Get 20% discount on the best coffee in Britain with Uncommon Coffee’s entire range at http://uncommoncoffee.co.uk/ (use code MW20) Extra Stuff: Follow Richard on Twitter - https://twitter.com/meadowsrichard  Buy Optionality - https://amzn.to/397R4lJ  Get my free Ultimate Life Hacks List to 10x your daily productivity → https://chriswillx.com/lifehacks/ To support me on Patreon (thank you): https://www.patreon.com/modernwisdom - Get in touch. Join the discussion with me and other like minded listeners in the episode comments on the MW YouTube Channel or message me... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx YouTube: https://www.youtube.com/ModernWisdomPodcast Email: https://www.chriswillx.com/contact  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, you beautiful people. Welcome back. On to today's guest, I am joined by Richard Meadows, who is a journalist and an author. Optionality is a term from finance, and with his background in the investing world, Richard used the principles of optionality to create an entire life design philosophy that allows him to constantly be making his own look. Life doesn't come with an instruction manual, and how to organize our lives to be efficient but have options and to take advantage of routine but enjoy variety. So one of the hardest balancing acts that we face. So today, expect to learn why you should earn as much money as you can when you're young,

how to make life-changing choices under uncertain conditions, how to protect against financial disaster, how to develop a system to create your own look and much more. This was such a surprise gem. I was in droid to Richard from Julian, who's a listener of the show, and he just blew me away. We're proper kindred spirits

and yet another bromance under the wind. But he's super cool. There's so much to take away from today. And if you enjoy it, or if there's something that really resonates with you, then let me know at ChrisWillX, wherever you follow me, Instagram, Twitter, etc, etc. Oh, that's it. Let's listen to Richard Meadows talk welcome to the show. Thank you for having me.

Pleasure to have you on, man. So, optionality. What is optionality? The simplest definition of optionality is the right, but not the obligation to take action. So you can do something if you want, but you don't have to. And my argument is that optionality is a pretty good proxy for human flourishing in general, and just being able to maximize your capabilities as a human being and have the maximum range of possibilities open to you. So would that suggest that naturally as humans

are level of well-being and flourishing is directly proportional to how many different options we can take in life? I think it's less of a quantitative thing and more qualitative, so it's about the caliber of the options that are available to you. So I draw a distinction between having a lot of choices in the consumer capitalism frame where you can go to the supermarket and choose between umpteen different varieties of pasta

sauce or laundry detergent, but like having high quality options is more important. So being able to work in a career that you find meaningful or satisfying or being able to have good relationships with the people around you, that's really the key. And it's not so much about sort of floating on cloud nine and being euphoric all of the time, but also having the right to choose to do things that are really hard, will that involve some degree of not necessarily suffering, but perhaps some degree of hardship or sacrifice because it's sort of a broader definition of human flourishing that goes beyond the simple hedonistic pleasures. How do you see optionality manifesting in the real world then? That's a nice concept,

but what does it actually look like when it enters our lives? Yeah, so I've got a framework for cultivating optionality that basically looks like taking this lens and applying it to all the little decisions of daily life. So I'll give you a couple of concrete examples. So what we're really looking for overall is any sort of decision or action you can take that has a small cost or a small downside, it doesn't require a lot of money or effort to take out the option, but it leads to an open-ended upside, so it could have basically unlimited possibility, and it could be really transformative for your life. So one simple example, that would be

you know like emailing someone you admire that takes you two minutes or whatever it might be to pen an email to someone and amazingly with the power of the internet you can get in touch with just about anyone that you can imagine and then they might even write you back and it could be the beginning of a mentorship or you could have some kind of relationship or just find it to there a meaningful interaction. So the downside cost there is very small, it's not that hard to do. And the possible positive outcome is very large or open-ended. So in most cases nothing will happen, maybe they don't email you back and that's fine because you've lost essentially nothing. But in the event that they do, there's a potential for

transformative upside. So my idea is to take this framework of optionality, which is a concept from the world of finance and just look at a lot of decisions through this framework and look for those asymmetry. So what's the downside? What's the downside? What's the upside? And what can I do that has a pretty small effort and might lead to a large payoff and then just systematically collect as many of those options as you can and build a portfolio.

So even if most of them don't work out, you're sort of constantly attuning yourself to serendipity and luck, sort of a system for making your own luck. So yeah, I could give more examples of those sort of asymmetries if you like. There's also the negative optionality, which is something like being in debt. So if you take on a consumer debt, you have the obligation to do something but not the right. So it's an inversion of the original formula. If you take on a consumer debt, you have the obligation to do something but not the right. An inversion of the original formula.

And again, one of the most powerful things I would argue that anyone can do is to remove those sources of negative optionality in your life. So they're extremely cautious of situations where the upside, the possible return, the reward, the bounty is limited, so it's fixed, it's capped, but the potential downside is bottomless or infinite, so this is the sort of a Russian roulette archetype where you spin the barrel, maybe you win a hundred bucks or so, it impressure mates at bar, but in the event that you lose, you lose everything, it lights out.

So, that's the framework, hunt for the asymmetric opportunities which are loaded in your favour and steer well clear of the options and decisions which have a negative asymmetry where there's a possibility that will lead to some kind of total ruin. What are some of the other common situations that you see people getting negative optionality wrong or that negative asymmetry? Yeah, so in the financial round, which is my main area of expertise, one of them would be something quite boring. Let's say you've got a car and a lot of the more is in the UK,

but you drive around without insurance. Now your potential upside from not bothering to take out insurance, I mean like indemnity or liability insurance is you're saving X $100 or pounds on the insurance premium, right? The potential downside is that you T-bone someone's Jaguar at the intersection and you're on the hook for whatever it might be, so you're 100,000 pounds or you're sort of out of commission altogether. So I think insurance is like almost an inversion of the concept of optionality because it protects you against those large downside risks. Another good example might be during the COVID-19 situation,

or disaster preparedness more generally, whereby it's helpful to have a bunch of medicines that you need, stockpiled and some basic food and water and supplies. And the event that something unexpected happens, it costs you very little to take those precautions. I mean, you're going to eat the food the way it's sort of bugger all in the scheme of things. And then the event that you need it, you're really, really, really going to need it. So failing to take simple protective measures like that, I would also argue, as sort of a failure of imagination and kind of a common risk management mistake where people are just like not necessarily thinking

about it through this lens of like, there are these big risks out here. Do I have an opportunity to mitigate them by taking some relatively cheap straightforward actions? The number one rule of the game is to never be out of being able to play. Exactly right. Yep, you can take risks, you can lose, it's necessary to lose, but you can never lose so bad that you can't come back. Did you see Bill Ackman's trade at the start of this year? I don't think so, tell me about it. So it's being dubbed the new Big Short. So obviously the Big Short was that famous film made about the fellow Christian bail played that shorted the housing market.

And Bill Ackman, who I'm sure that you know, a very famous short seller on Wall Street, he was the guy that wasplates that shorted the housing market. And Bill Ackman, who I'm sure that you know a very famous short seller on Wall Street, he was the guy that was adamant that Herbalife was a scam. And I think he's still short on Herbalife even though he hasn't taken them down yet. The beginning of this year, he foresaw that COVID was going to have a significantly bigger impact on the entire world financial market than anybody had priced in. So he took out a very special type of insurance, which is kind of like put options. It's a bit sort of complex to explain, and I definitely can't do it. But there's also YouTube videos out there if anyone wants to dig into it further. But the long and short of it is he made more money than the man from the big short and the differences. It didn't take him

three and a half years. It took him about four weeks, billions and billions and billions of dollars in the space of about four weeks because this man first saw that and that's kind of the same, right? Like the potential risk that he had was to just continue taking over with this particular type of insurance, but the upside was so asymmetric in his favor that it made total sense. Yeah, yeah, no, that's interesting. So the guy who I've learnt the most about optionality from is called Nassim Talib and he's an options trader and he did something very similar during the 2008 2009 global financial crisis whereby I think he was buying put options I think he was buying out of money puts and he was sort of every day

Loading up and taking these small manageable losses and he could see something bad was gonna happen with the build-up of Accumulation of risk within the financial system. And so we're not all went to pieces. Everyone lost their shirt except for him because he'd been waiting for just such an opportunity with these small, steady, predictable kind of losses. And then the upside when it came is the same kind of scenario where it's essentially, it could run on forever. And so my understanding is that he made his fortune by being a bit of a contrarian and positioning himself to profit from misfortune and disaster. So yeah, who knows the Bill Accoment 2, I have to have a look at that.

Yeah, he crushed it, man. You're going to love that story. Another good example of negative asymmetry would be having unprotected sex or texting whilst driving. Like you're talking about a marginal increase in pleasure for a potential 18 year commitment or a health risk and then the equivalent for texting while striving. Like, you know, you're looking at potentially time in jail, a fine at the bottom end or ending some poor person's life because you're not properly looking all for what? For replying to a meme a little bit quicker in a group chat that everyone's

going to forget about within the next five seconds. Yeah, that's why I love that. I wish I'd included, Iprotected sex one in the book. That's fantastic. Yeah, it's a conversation that we've had a number of times looking for these sort of asymmetric opportunities and avoiding these asymmetric risks. Do you see any asymmetries manifesting more in the sort of social realm rather than just in the financial realm? Did you come across any of those? Yeah, I have. I think most of them are positive asymmetries that you can exploit, but I'd rather,

sorry, I'll touch on the negative ones to begin with. So I think the main negative one would be just this social contagion effect whereby the people use rages up by a responsible, they kind of shape you and mold you. And they shape your outcomes in a really surprising way just because humans are so malleable and so we're so good at kind of unconsciously imitating one another. So something that I say which might come across is quite mercenary and cruel in the book, but I think is a actually a necessary thing to do is to excise the

The really toxic people from your life if you're unlucky enough to have them in your life And perhaps having taken steps to try and actually help them and do something about it, but Yeah, there's this phenomenon where by things don't get worse in a linear fashion, they tend to spiral downwards faster and faster. So if you have, if your social group, if your friends or your family or whoever it might be constantly exerting a negative influence over you, the hard and possibly probably correct thing to do is to get some distance from them. You may or may not cut them out of your life altogether, but definitely acknowledge this idea that you don't have to feel obligated to be tethered to someone just because you

have a shared history indefinitely. And I certainly found that quite powerful. My idea myself having been brought up with the notion that it's like, it's very, you have to love unconditionally from now until the end of time before your friends will fail. And there's no way to get any distance from that. Yeah, and then the more positive happy side of the equation is just it's a big old world.

And it's never been easier to connect with people. And it's incredibly easy to get in touch with people. I mean, I kind of, I know this, I'm a journalist by trade and it's surprisingly easy to find people with contact details online. So it's mostly a question of, I don't know what you'd call it motivation or confidence or something like that where you can put yourself out there and sort and find your tribe of people more easily than at any other point in history. And the manner in which you do so usually involves something like being good at email or having a presence on Twitter or on contributing to open source libraries if you're a programmer or inhabiting certain forums or putting yourself the next level of vision of that would be changing your geographic proximity.

So actually upping and moving to San Francisco if you're big into tech or New York if you're big into finance or whatever it might be and putting yourself in the proximity of the kind of people who you are likely to get along. So that's like not as an attractive and option and so far as it requires you to live in San Francisco, but yeah, there's lots of things that you can do to sort of build social capital that don't require a lot of effort and that could potentially change your life. And I'm sort of speaking from experience here, having done that almost by accident. And I think that people have this idea

that you can't really be strategic about things like relationships, like it's somehow it's a it's gauche or it's not, it's not the dumb thing. So I think if you apply this framework, where you actually say, hey, this is important to me. I'm going to put an effort in a strategic, cultivated, deliberate way.

That's really powerful, just having that realization and thinking more carefully about where you're devoting your time and your energy. Do you have any triggers that help you to continue doing that in life. One of the things that I often find is I'll come across a concept like this that we're discussing here, pretty much anything else to do with personal growth. And the issue, for the most part, isn't my buy-in. I fully believe that this could have a really positive impact in my life, but I need to instantiate it somehow. I need to have a trigger or some sort of little mantra or a reminder of some kind that allows me to actually enforce it into reality. Yeah, I mean, I like the idea of of chanking down difficult concepts into little

mantras that you can remind yourself of. I definitely have a few of those myself. Actually, I have like a, almost like a catcher or mantra. I'm not sure if I should even say that that, but I will. There's a line, I hope it doesn't lose its magic, Juju. So there's a line that goes at first, say to yourself what you would be and then do what you have to do, which is from epic status. I think you're sort of big into the style of Xany, so you'd probably be familiar with him, but yeah, it's just this idea of, I'm, I'm, I ain't nothing to it but to do it. So I have little tricks like that, but my main weapon for making all these trade-offs in a smoother fashion, you know, making these short-term, pain, long-term all these trade-offs in a smoother fashion, you know, making these short-term, pain, long-term gain type trade-offs,

is basically to systematize everything. And what I mean by that is put in place certain practices and habits and constraints that just make the process of getting to where I want to be smooth so it doesn't require willpower on a daily basis. And in the realm of finance, an example of that would be instead of sort of saying to myself, I'd like to save X amount of money and I'll try really hard not to blow my pay packet just to sit up and automatic transfer after payday that goes straight out of the bank account, straight into

your investment account, and then you have to live on whatever is left over. And at no point in the process do you feel friction or pain? It's perfectly automated and you just get by and you sort of adapt to the new normal of how much you've left yourself for spending money. And there's a bunch of tricks like that which I find really useful for both practically in terms of actually implementing these, what I think of as trades and psychologically in terms of knowing that no matter what your outcome is you're putting in the work. So you're following your system day after day and you're doing the right things and maybe it won't pay off immediately.

You don't know exactly when it will pay off and you don't know what will the pay off look like, but you can feel good about the fact that you're following your system and you're stacking up what I think of it's these juicy asymmetric options. So I should probably give a concrete example of that as well, which would be something like reading books, I think, is just like changed my life, probably like

no other practice has. And the reason that I like to read books, I mean, I'm quite apart from the enjoyment factor is that they're cheap. You can buy them cheap or you can get them from the library for free. And then you don't know what's in there, you don't know what idea you're gonna encounter what you practice, you're gonna pick up when you sort of get to gaze out upon the world through someone else's eyes. So that's the small cost and the very large potential upside. And then if you have this practice, just read a fucking book, like read a book read a read a fucking book like read a book Rather than watch TV or something like that just just read a fucking book and then it will pay off at some point

You don't you don't know how you don't know you don't know what it's gonna be Until you until you get there and it will it'll surprise you every time so the practice is really what matters You don't you it's not sort of like you have to see the future and project. It's going to be exactly this and this is going to lead me on to part. This is going to lead me to this path and that's going to result in this opportunity. If you become the kind of person who does such and such activity and I would include sort of reading in that bracket, it's going to pay off. It's just going to pay off and you can feel good about that.

So much to go through there, man, it sounds like I'm talking to a kindred spirit here. Certainly one of the things that I've done this year, which has made a big difference, a little mantra I've had in my head, has been, this is why you're here. So when things get hard or you feel discomfort, the reminder is that that's what you're here for, you're here for the slightly uncomfortable learning experience, it's because you're learning something difficult and worthwhile, you're there for the burn in the gym, you're there for the slight level of hunger or tiredness or whatever it is at the end of the day because you are on a calorie restricted diet or because you've trained hard that day or whatever it might be,

this is why you're here, lean into your discomfort as if you invited it through the door and then talking about systematizing some things that you want to do. A good hack for that. Sleep with your phone outside of your bedroom and don't watch Netflix after a particular time at night. The only choice that you have to do is to read a book or go to bed early either way you win. So those are two ways that I've instantiated things that I want as long-term lifestyle changes into a daily practice. One thing that I can see as a potential problem here is optionality being polarized with optimizing. Like if you're always exploring new options, you can't exploit and double down into certain things. How do you deal with that?

Right, yeah. I'm glad you brought that up. Yeah, so that's the fundamental tradeoff that's exploring and exploiting. So to begin with, I think it's never a bad idea to maintain some level of optionality. So in other words, to maintain some level of optionality.

So in other words, to devote some small portion of your time to be constantly exploring and opening up possibility right until you're on desk to what kind of thing. But then, yeah, after a certain point, you do have to switch from trying to open up new possibilities to just actually execute on something and sort of grab onto both hands. So my model for that is the optimal strategy for switching from exploratory map mode to

exploit mode is a function of the volatility of the domain in question and of your time frame in that domain. So it actually views theories depending on what it is that we are talking about. So let's say that you kind of, in your teens or early 20s and you're trying to get a handle on fitness and nutrition and workouts and stuff. It's a good idea to try a bunch of things and see what sticks and see what you like and dislike. Just again, from the point of view of not trying to do battle with yourself and just make life easy on yourself. So that would be a point where you want to do a lot of exploration, but obviously you don't want to be that guy who's constantly doing the hot new thing and never actually makes progress with anything, as the disease of the fuck around us.

So you have to commit to something. Yeah, and then in that particular domain, the volatility is not increasing. So that implies that as soon as you've found something that you are into and that you feel good about, you actually basically lock them in and just get after it indefinitely. And you can keep trying little things here and there, but you should do just enough exploration to find out about your own personal preferences and what works for you and then just get after

it. So the reason that that is that you should approach it that way is because the human body and the sort of, what would you call it, like the interventions for physical fitness are not changing. Like the barbell, well, calisthenics is thousands of years old and then the barbell I think is at least a couple hundred years old and dumbbells that dumbbells go right back to ancient Greeks so The body itself like it changes in on an on an evolutionary time scale But it doesn't change over the course of your own life except in in the sense of aging so Because the domain is relatively stable you don't benefit from

Constantly exploring and seeing if new opportunities are cropping up. It's not like the laws of physics will change one day and suddenly, you know, CrossFit will be out and, you know, or spectable checks will be in or something. Like there's no point in positioning yourself for uncertainty because there is no real source of uncertainty there. And then to give a counterpoint of an opposite sort of scenario, if we talk about career planning, the argument that I make is that you have to be open to exploration much more so than in a domain like physical, because the world is changing,

there is a lot of volatility, and you can't necessarily lock yourself into something and then put your feet up and just exploit. Because, let's say you have this model where you're a specialist, you're very good at one thing, and this is the old model of the job for life, 40 years in a golden handshake. You lock yourself into that, you don't broaden your skills and then the robot apocalypse comes along and takes your job. Yeah, you know, one of these sort of, I mean,

it doesn't even have to be one of these outlandish AI scenarios, just the more mundane reality of industries collapsing. So you've sort of concentrated all of your career capital in this one domain, and it serves you very well over the short term. And what you can't see in the background is this large accumulation of sort of silent risk. So you might be all right, you might make it to retirement and nothing bad happens, but if your job suddenly gets outsour source to, you know, to Bangladesh

or India or whatever it might be, you're screwed, right? You haven't sort of diversified yourself. You don't have options. So that's the downside resilience case for always being exploratory in a domain which is changing quickly, but the more attractive side of that is looking at the upside. Thinking about emerging technologies and emerging fields, things are changing now within the course of our lifetime. Within the course of a single year, or certainly a single decade, and if you have broad set of skills and you are interested, you take an active interest in the world and you're a sort of a curious person, you can position yourself to benefit from these things.

I mean, I think we're talking about Bitcoin just before we have record. Imagine being one of those guys who was buying Bitcoin for 30 cents each or whatever, because you're a geek and you're interested in this new, weird money thing that no one else has ever heard of. Just because you're sort of taking a broad interest in life and not just being like, I'm the chief widget maker, the widget factory, and I'm good at what I do, and I'll never broaden my horizons any further than that. Does that make sense?

Absolutely, man. Yeah, totally, totally does. That insight of optionality being inverse to the level of volatility within the system makes a whole turn of sense. And I guess this year COVID, up or up evil, it's just the year of optionality. But if the future's uncertain, how do we become more confident about our decisions? Shouldn't we just constantly be worried about the future, especially given that technological change in society is moving so fast now. Yeah, I mean, this goes back to what I find to be psychologically comforting about optionality.

So at this point, it might up to sort of mention my model for what are the raw ingredients of optionality so I break it down to financial capital I how much savings you have and how little debt you have Health capital, how fit and healthy and energetic you are Social capital the strength and quantity of your relationships and knowledge capital Which is the depth and breadth of your skills and experiences and If you have if you focus on all four of those buckets and you're sure not to neglect any of them, I think you can kind of feel confident about the future, even though you don't know what's coming, because let's say 20 years from now,

I wouldn't have a clue what I'm going to be doing in a fine grand kind of a sense. I don't know what sport I'll be playing. I don't know exactly who my friends will be and I don't know what I'll be doing for work. But in any possible conceivable scenario, it will be extremely useful for me to have all four of those buckets full so that I'm in a good position to execute on whatever makes sense at that point in time and my life and my career and that future version of me. So I find it extremely comforting. I mean the probably the simplest and most obvious version of this is that anyone who's ever been in debt or who's just had a shitty job

and sort of struggling to make rent, it's just a horrible position to be in. Like you feel powerless and you can't relax and it sort of bleeds over into every other area of your life. And getting yourself in a position where you've cleared your consumer debt, for example, and you've got like a bit of an emergency fund in case the shit hits the fan. It's just such a powerful thing to do. And it doesn't

actually, it's not changing anything in the sense that maybe you still work the same job, and your life looks more or less the same, but just cycle, even psychologically, it's a powerful position to be in. So yeah, my argument is that if you build up these sort of central assets, these real core valuable sources of optionality, that alone is extremely comforting. It's never not going to be useful to have a big chunk of change sitting in the back, so you're well positioned. Maybe an investment opportunity comes along. Maybe you're the guy who finds out about the $0.30 bit points, right?

Like maybe you have an idea to start a small business or you want to quit your job and take a sabbatical and launch a podcast or whatever it might be, right? Like it's always always gonna be useful. And you're like, I don't know, you just feel a certain sense of security and possibility when you have all of these things topped up. So I think that the future is kind of scary,

but you can take some of the sting out of it. And maybe even make it into an exciting thing. That would be the ideal, where you're kind of intrigued about what will happen. I mean, just from like, yeah, it is, I mean, the world is a fairly wild place right now. And if you can, if you can be the perfect star, I can sort of remove yourself from it a little bit.

It is almost entertaining, isn't it? Like, it's just so bizarre. Yeah, is, I got asked on a podcast I was guesting on someone's show this week and they asked me like, what do you want to do in 50 years? What do you want written on your tombstone? And I've never really been that good at long-term planning. I think it's a function of being curious. If anyone is super, super curious, you're always aware of just how many things you're not doing, rather than the

things that you are. That, to me, is just like, man, I don't know. I get the sensation. I get the impression that when I start a family, I'm currently single and don't have kids, but I get the impression that when I start a family, I'm currently single and don't have kids, but I get the impression that when I start a family, that's probably going to be a sledge hammer of emotions that I'm not ready for. That's probably going to whitewash most of the other stuff that I do in my life, but I might be wrong. And given the fact that I don't have that input and I do tons of different things, I was like, I don't know, man.

But you've given me a comfort blanket, then, man,, like I've just got options, I've got optionality. Yeah, talking about the absolute fundamentals, what is the fundamental best way for someone to start opening up the optionality they have in their life? Um, I think the single most important thing that anyone could do is probably to attack the financial side of things only because, well I'll tell you a little story. So, I used to be a business reporter, had a good job, enjoyed it very much, but I was starting to get a bit bored and sort of getting that three-year-edge kind of thing. And I came across this subculture called Financial Independence Retire early, or the Fire

Movement, and I started getting into their stuff and their main thing is like you go into kind of hardcore through Galilee mode and you think really carefully about what's important to you and Cut out any extraneous spending repay debt aggressively so I did that and I saved like enough a big enough chunk of change to Eventually sort of quit my job not an impermanent retirement since But in a sort of go-taker sabbatical and work on other projects since and that was like that was the the lifestyle experiment that launched a thousand ships kind of thing like that was the most

powerful move that I've ever made I think and that is very accessible to most people. So, um, what was the figure that you hit? I hit a hundred thousand New Zealand dollars. I think I've hit it in the green back about a year later. So, um, yeah, enough money for me to go and travel when, um, do my thing and have some space to breathe and think about other projects, but not enough to retire on permanently. But just the principles of doing that are so powerful and money is not quite the same thing as optionality, but it's one of the most powerful ingredients because if you have money, again,

you have the right obligation to spend it however you see fit. So you can't buy everything with money, but you can make it pretty good, make it pretty good, attempt at it. So one underrated way of, or maybe it's not underrated, but one powerful way of having more optionality is to take that, use something like that frugal approach. I think especially when you're a young man or young woman, and you can, you don't necessarily have to have an extravagant lifestyle and try to keep up with your peers. You can just, again, it's a short-term pain, long-term game thing.

You can just sort of set yourself up to being a stronger position, a little bit later down the track. So I would highly encourage anyone who's listening to this who is thinking about like, if you don't feel powerful, if you don't feel like you're in a position where you could take a punt,

where you could take a risk and start your own project, or where you could walk away from your job, because you don't like your boss, you don't like your co-workers or something. Yeah, I think if you want to give yourself some power, what you want to do is start being more intentional about your spending. I've got a lot of tips in the book and start trying to build up the net worth, start trying to get rid of debt. And then that puts you in a really strong position.

You can walk away from a shitty situation. You can retrain or upscale. You can take a sabbatical to launch your passion project. You can cut that to part time hours. Maybe there's been more time with your family or put more effort into your health or whatever it might be. And I feel like that's an unusually accessible intervention that a lot of people could use.

And with the exception of people who are really doing it tough and they're already sort of living on the smell of an oily rag, the great majority of young trade to people in professionals could use those strategies to get themselves in a good position. So yeah, I think that's probably the simplest step to get started. I remember I had a conversation while I was on a photo shoot, maybe about six or seven years ago with this older lady. She's probably about the age that I am now, something 32, she's maybe like 32, something like that. She's telling me about her and her husband,

and I just bought my second house, my first rental, I had my own, and then I bought a second one for a buy to let, and she's telling me, we've just got our eighth house, and I'm talking about all the different things, and I was like, also, what's the plan? And she says, well, me and my husband have done all of this.

We started a business together, we got married early. It's a 22. We started a business together and been working on this business and building up this property portfolio alongside it. Now we've got the manager that's been with us for ages. She's going to run the business and we front loaded our wealth. And it was that term that stuck with me. So we front loaded our wealth acquisition to the point now where we're going to go travel the world for the next to the point now where we're going to go travel the world for the next four years and then we're going to settle down and we're going to start family. And I was like holy fucking shit, that's it. If compounding is the eighth wonder of the world,

which I think we all agree it is, then front loading that wealth as quickly as possible. And it's something that I ended up doing purely by fortune rather than by design. But it certainly put me in a strong position. Now I have my house plus three other rentals, and I have a nice sort of steady part of cash. And it also means that even my own home, because I let two rooms out to my buddies,

even that's paid for, you know, the whole world could go to hell in a hand basket and I'd still, why he has done this, yeah. And financially, I know that I'm still sorted. And the converse of that is kind of the live young wild and free advice that's often given to people. And I get that, like, don't get me wrong. Being young is a time for you to adventure and to do new things and to be a little bit reckless as well. But at the top of this episode, we talked about the number one rule of the game is to never be out of playing and locking yourself in, going bankrupt, getting into a business at 23 years old with zero business experience and some shady business partner and having a bankruptcy

on your record or having a terrible credit rating because you've run up a ton of different cars on repayment finance or a bunch of credit cards because you wanted a new 50-inch TV or whatever you know upside 50-inch TV downside shit credit rating for the next decade Upside 50 inch TV downside shit credit rating for the next decade Pretty big asymmetric risk that you've got going on there. So yeah Certainly and and that the the beautiful thing about front loading wealth is that you've front load if you haven't done it up until now Now is the time to start you can be 75 listening to this and you're better off front loading wealth and you are back loading it now

I had a Morgan house along guy that wrote the psychology of money and he said that 90% of Warren Buffett's net worth was generated after his 65th birthday. Is it right? Holy shit. That's how powerful compounding is. Yeah. So yeah, I'm all about that, front load that wealth. Why didn't you decide, right, I've got my 100,000 here, I'm now going to continue to work

and just build up like some insane amount of cash and then go for not, not whatever it is, I can't remember what the first two letters are, retire early, financial independence retire early. Why not like financial independence, retire an all right age but wealthy as fuck? Yeah, well, so I could have done that, that was my initial plan, but the problem was that I was a journalist and a journalist am not really making banks. So it would have been a bit of a slog and I wouldn't have retired super well for it. I would have had a pretty spartan existence if I wanted to do the early retirement thing, which is fine. I'm you know, I'm actually okay with that.

But what I wasn't okay with was sort of having this super distant future focused idea of distant happiness. So it took me right out of the moment because this idea of finite cylinder pens for tie early is like the whole point of the game is to check out the earliest opportunity. So it's very, it's a very kind of negative framing. Work is bad and you must escape, right? So I wasn't prepared to keep doing my job which I was no longer wildly interested in for 10 or 15 more years to get to the point where I could retire properly because I had all these other things

that I wanted to experiment with. And also I hadn't done my overseas experience, which is a sort of grand tradition in New Zealand. You have to go out and have your gap year or whatever and do the banana pancake trial and that sort of thing. So I didn't want to squander my youth and my mobility and sort of lock myself into this future thing. So I just decided, I'm going to pull the plug right now.

This is enough to make some big changes to my life and maybe look for some higher leverage opportunities. So being a salary earner is fine. It's great in some way, in many ways. It's sort of comfortable, and you have that stability. But I think I like that in the violin that, you know, the way to get wealthy is to own something. Is to own a piece of something, like you with your houses

or you know, you with your podcast or, you know, your own estate and a business you start your own business you and the fundamental difference here is you capture the upside right not your boss not the shareholders of the The conglomerate that you work for Possibly there's there's a there's a stronger element of downside risk and it's a bit more of a Specular the play that you get to catch it all the grave it. So that's like, I mean, thank God that I did quit my job and go off and wander and sort of try some of these higher leverage or speculative plays because that's actually how, you know,

the other path would have been okay. I could have gone back to work and had a pretty good existence. But like, now I'm financially independent just having, without having to work full time or do anything that I don't want to do. What do the roots of leverage that you have favorited over the last few years? So investing is my main thing and that is how I've also sort of generated most of my wealth. So what I'm looking for is again asymmetries, I don't know if you want to get into investing at all.

But yeah, like looking for neglected opportunities and things that kind of intersect with my own skill set or experience or things that are available to me that aren't necessarily available to every announcer, but I'm not talking about S&P 500, which every man and his dog can go on and trade, things where you have some insider knowledge or you have a personal connection and therefore there's an opportunity there might be an asymmetry to exploit and then the other things would include somewhat entrepreneurial ventures like yeah I don't know if I'd call them entrepreneurial but writing a blog, writing this book I've just finished where you're having a punt, the downside cost is the time it takes

you to write the thing and pay for various expenses. Then you give yourself a shot at collecting quite a large upside, whether that comes financially which is informationally difficult to make money through books, but it's always possible that you get the sleeper hit or the runaway hit. And then also in terms of creating other opportunities, so broadening your reach in your audience and you never know who's going to read it and who's going to get in touch. So yeah, I've been, yeah, I suppose I spent my sabbatical collecting those kind of options, like meeting new people and

trying some uncertain ventures that don't have a steady paycheck associated with them. And then, yeah, I've just been lucky that some my stable of options have started paying off. Interestingly, after I'd written almost all of the book, so this is not a sort of one of those things we create a cute story after the fact to explain your success. I didn't know that this would happen, but I was putting myself in the best position possible for it to happen. I love it, man. Speaking in Navarre language, you're leveraging on media and capital. And the one that I feel like Naval actually misses off,

which is kind of the social slash network slash renown effect. And it's a kind of a combination of all of those. Is there an elephant in the room talking about what you've just brought up there? And then the point I made before about front loading your wealth. Is there a bit of an uncomfortable elephant in the room that there is, if you want to have a family, there is a little bit of a time bracket on this that we need to spend a little bit of time avoiding debt and accruing facts, stacks of cash. We also know for most of us, we don't want to be a parent to a newborn child at 50. So there is a kind of a window in terms of long-term lifestyle design that we need to slot

ourselves into and for women, the window perhaps is made even smaller. Although, statistic from 2019 in the UK, more women had children over the age of 40 than under the age of 20, right, yeah? Wow. If you're cool, start. Yeah. But you understand the paradigm I'm talking about.

I do, yeah. So, you're absolutely right. But I think the good news is that it's not necessarily a bi-phasic thing where you're in this mode now and then you switch to this mode after a certain point or because you're having a family or whatever it might be. You can see that move in and out of different modes. I'd probably again go back to the exploring and exploiting thing or you know risk on or risk off modes and you can you can do that like multiple times throughout the lifetime. So my preferred model is for a young person, first spend some time actually building some career capital. I reckon that's always the way to go. And what I mean by that isulates some skills, get paid to be less dumb, basically get a regular job.

You'll also meet people through the job, hopefully, and repay your student debt if you have one or at least have a crack at it. And also learn how the workplace works as well. Learn how to have a disagreement with your boss, learn what it is to get up at 7 a.m, etc, etc. Yeah, and maybe get a taste for what you don't want to lie to, I suppose. Yeah, like it's that thing, I don't know if anyone who's ever done like manual labor or maybe worked in a hospitality or in a restaurant, I think if you're in a shit job, not that I'm saying all

those jobs are shit, I just mean if it happens to be a shitty version of that job, that's pretty good motivation, right? You don't want to think of yourself like 40 years from now doing the same thing. So the character building element to it as well, where everyone should really have to do that. But anyway, so you go through a phase where you're trying to be useful and you know you're young and dumb, you don't know anything. Like you just pick up skills, come useful. Then maybe you do your exploration where you start, maybe you go out into the world and you take risks because you don't have the mortgage necessarily, you don't have kids at that point. It's not a surprise that so many entrepreneurs are in there, even in their late teens or early 20s, like it makes a perfect sense.

Then, if your ambitions don't work out and you want to have a family or whatever, you can take risk off, you can sell your business if you got it started or just sort of work a regular salary job and step things back. But that's not the end of the road. So interesting statistics, I think the most successful entrepreneurs tend to be in their fifth days or certainly older.

Like the Zuckerbergs of the world, actually there's a lot of them, but that doesn't actually necessarily relate to their success and it might even be the opposite. So I think they're incredibly rare. There's a really famous diagram floating around a couple of years ago, where it was talking about the founders

of some of the biggest companies in the world and when they founded the companies and it's like Bill Gates in his 50s and Steve Jobs in his and blah blah blah blah blah The only reason I can see that we have adolescence worth billions and billions of dollars is a function of the fact that Silicon Valley's valuations of companies has become completely detached from their actual worth and it's more a quirk of the particular way that our economy is set up at the moment. i.e. Silicon Valley doesn't know what the fuck it's doing and it's just chucking, chucking money at anything that moves in a desperate attempt that it's going to go to the moon. So yeah,

I totally agree, man, you can win at almost every stage of life now. There's these kids, these like seven, remember this seven or eight year old, who had a YouTube channel reviewing toys and he's like one of the biggest YouTubers in the world a couple of years ago. And you can flip that round to the Warren Buffett story where you make 65, oh you make 90% of your net worth after you're 65th birthday. There is a full lifetime of success opportunities. And you really, as long as you're never out of the game, you only need to hit that moonshot once. Ideally, you're earlier on because then you get more time to enjoy it,

but you only need to get it right once. Yeah, no, you're absolutely right. I mean my own personal plan was if my little ventures didn't pay off, I was, because I do quite want to have a family at some point. I thought that I would return to the workforce and, you know, have a reasonable job and a good career and maybe do the kids and house and family thing. And then yeah, at some distant point down the track, save up another stack of cash or getting a good financial position and then go do something wild again.

You know, like go try and start a company or sell everything and go traveling or whatever it might be. I think dude, I think that's kind of whatever you'd call it. That second, second youth when the kids leave home, I think we're going to see that more as we've got more frictionless travel, people who've grown up with a traveling mindset and an entrepreneurial mindset. Rather than the kids leaving home and your parents retiring to the country, it's like the kids leave home and your parents retire to five different countries a year, air being being their way around the world, doing all of the stuff they just

didn't quite have time to complete when they were 25. And I think that's going to be super cool. I certainly know, given my wanderlustin, it sounds like you've got the same. That would absolutely be something that I would be looking to do. But not just going away on wanky dfdsc ways tours and cruises which like everyone's mum and dad seem to be obsessed with at the moment. Like you know going and heading off to all the countries that you didn't get chance to or going on an expedition or going dog sledding, you know, all that sort of stuff. I think that hopefully we'll see that and it'll be really,

it'll be a really fucking cool world if that was the case. And it's also going to plug a ton of wealth and income into more very countries. You're going to take wealth that's been created in the developed world and plug it into the developing world in a really nice way. Yeah, that's right. It's even doable with kids in tow. I mean, I don't know how much of a logistical mission that is, but when I've been wandering around, I've met a bunch of families who are actually doing the nomadic, digital nomad lifestyle with their kids.

And it's pretty cool for the kids because they get to, you know, like I'm thinking of this family who have got two young boys and the boys are in an entire school learning tie at this formative age. And that's normal for them. That's their life.

So yeah, I think that can be, that's even a possibility as well as to make it so. So many options. So many options, Richard. Right, so you've got these 10 principles for optionality. And we've kind of gone through a few of them, but there's some in here that I think are really cool. So can we do a sort of a quick fire

and have you just explained some of these to us? Yeah, of course. Perfect. So number two, sorry, number three, beware of geeks bearing formulas. Yeah. So there's a, okay, so in the world of finance, people love to come up with very fancy models that they think have some predictive power about what's going to happen to the stock market or oil or a little bit coin or whatever it might be.

And they use these models to decide how much risk they're willing to take in terms of assay allocation and timing and all these kind of decisions that they have to make. Now when people do that on their own behalf, that's okay. You can be a trader, you can go on all straight bets, you can have a play. And if you screw up, then because you're for the Nazi retracements, we're wrong or whatever. Like that's on you and you know, maybe it's a learning experience or something, right? But the danger is that everyone has exposure to the financial system as a whole and people who are making these kind of decisions on your behalf because they're investing your retirement fund for you or pension fund or whatever it might be.

So, there's this tendency throughout human history, but especially in the financial realm to sort of have too much confidence in these predictive models, which only have offered a very simplified version of like a complex chaotic system. And then when the models are wrong, things work out very, very badly. So during the GFC, for example, which during the credit crunch, yeah, this is the story I recount in the book where the Goldman Sachs guy who's funders just lost 30% or something is saying like, this was a 25 standard deviation move outside of our models and it happened multiple days in a row. It's a total freak accident. And the funny thing is that like these freak accidents happen all the time.

And it's not that the universe is just sort of taking the piss. It's that the models are broken, the models are wrong. So the more general lesson to sort of extrapolate out from that is just if you're making any kind of decision that's based on an equation or a model also very popular in the financial independence retirement early movement. Just don't put all your faith in it. Just remain open to the possibility that you might be wrong or that your model might be wrong and

sort of plan accordingly. Because historically if you sort of trust in the numbers too much, like so and so is a sure thing, you will be proven wrong in a sort of a devastating fact. So you have at once every decade as well? Yeah, yeah, I mean it will happen in your lifetime, yeah. For sure. Number five, generating better options is much more important than trying to make perfect decisions. So, if you think about when you go through daily life and you're just presented with this massively expensive array of options. And I mean expensive in terms of attention and mental bandwidth. And the vast majority of them just don't matter.

So we're sort of blind to them because we are so used to it. But like what clothes you wear, what exactly, what brand of cereal you're eating, and all of the products elections that you make, the route that you drive, the people you associate with, the emails you check, the websites you look at, blah, blah, blah, blah, blah. If you add all of that up, we're talking about like millions of branching paths in front of you at any given point in time. You could order anything you want. You could look at any website on the entire internet or watch any TV show or film.

So a lot of people try to optimize those branching trees of possibility. So swap through the umpteen different brands of detergent and figure out the exact best one for me or find out the exact TV show that I should watch or basically putting a ton of thought into these decisions that don't have any asymmetric payoff because you choose this brand of laundry detergent over that one, like it's not going to be wildly exciting either way, and your whites are whiter or whatever. So the point that I'm making there is that you don't need to worry about the vast majority of

those choices that are presented to you in daily life. You're much better off pruning quite a lot of those pathways and trying to put your channel, your efforts into looking for the actual asymmetric opportunities that are going to be powerful to you. Instead of walking down the brick for serial aisle and trying to decide which type of serial you should eat, a higher lever of absorption to be thinking about is like, do I wanna be eating cereal? Or, you know, like, do I want to have breakfast at all? What is the concept of breakfast?

Like, is this just a myth sold to us by Mr. Kellogg or whatever? Right, so like, the point being not that you should skip breakfast, but just that, like, maybe that's a more interesting, potentially rewarding option to think about and then like the very specific difference between one brand and the other and sort of scrutinizing ingredient panels and that sort of thing. So it's my sort of, go ahead, sorry. Go on. Going one level of abstract background. I can say that with my temporal hat on, my conspiracy theory is that I don't know if this is an exact deliberate ploy or not, but when you have all these options sort of dazzling

you, you're essentially trapped and this is what the consumer capital system wants from you is to keep you obsessing over this narrow range of standardized options so that you don't make the big high leverage decisions to stop consuming in certain ways or change up your life in a more meaningful way because you're just constantly trying to make these low-level boring low pay-off decisions. So I go on, you're going to say something. Yeah, so the illusion of choice that we're given as a consumer still traps us in the matrix of making decisions as a consumer. It doesn't actually allow us out of the maze, it just gives us different flavors of cheese within it.

Yeah, I love that. That's a great way of putting it. Um, one of the things I thought, first off, a good heuristic, I suppose, would be to take one step of abstraction back from the question that you're asking and just think about it from first principles about like, do I need to do this? Do I need to do X? Well, I get my car cleaned every Saturday. Okay, well, like, could you get away with getting it cleaned every other Saturday? Do you actually need to get it cleaned at all? Like, what's gonna happen? Could you get it cleaned every six months? Is there a different way that you can get it cleaned?

Can you go for a machine as a hand washer, this and the other? Another thing that it made me think about is an aval quote, play stupid games, win stupid prizes. And that very much I think talks about the, it speaks to a number of different things, but one of them is the obsessing that we happen to have

over easy decisions, because it allows us to push away the difficult ones. So I'll never forget, this is when I was maybe 23, 24. So I was on my way to buy my first house and I was the director of a pretty successful events company and I had a fair bit of money behind me. And I remember I must have spent five minutes debating between two different types of yogurt

based on the deal that was on, It was like four for three pounds or like like seven for eight pounds, but there were different yoghurt and there was some different flavors and this one's more, this one's got a little bit more protein and but there's a little bit more trans fats and the other one. And I remember I had to take that step back, go one level of abstraction away and go Chris, what on earth are you doing? Like this is absolutely insane. In the time you were here, you could have gone home and done something with far more leverage that would have genuinely added value to your life.

But it's because I hadn't made the decision around which mortgage broker I wanted to use or because I hadn't, you know, the hard thing, I hadn't sent the application after whatever lawyer company. That's what I was hiding from. And really, that play stupid games win stupid prizes. Also ties into, it's a really easy way to identify the negatively asymmetric games that we're talking about.

So, stupid games is unprotected sex. A stupid game is texting whilst driving. A stupid game is putting your entire net worth into some expert algorithm trading advisor that some kid on Instagrams decided to tell you that you should use. And another one of those, the most obvious one, which really struck home at me that when I realized it, was what is the prize you win for always responding to messages within 24 hours? you win for always responding to messages within 24 hours. Because we all do that. We all check our inboxes, our social media, Instagram, Twitter, Facebook, whatever it might be, TikTok. We all, I don't even, I don't know if TikTok has a inbox. We all check those. But what's

the prize that you get for being the fastest replier in the lands? Like genuinely, these people, especially as you start to accrue a little bit of social capital and you get more incoming than you have outgoing. And most of the incoming is people wanting something from you, whether it be an answer to a question or just the sense of belonging to do whatever. Like that's cool and satiating that desire is fine

and it's a nice way to connect. But what's the prize that you win for being the fastest person on the trigger for that? It's absolutely nothing, it's noise not signal. And that's the question. The prize that you win is that people expect that from you as well in the future and then it sort of becomes a trap of your own making. It's a curse. So here you... Yeah, I mean, that's my excuse

for why I only reply to emails once a week or something. Thanks for giving me that excuse. That's fine. Spectacular success is a matter of putting ions in the fire. Yeah, so this comes back to the idea of looking for these asymmetric opportunities and following your systems day in, day out.

Basically, my frame on luck is that quite a lot of success in life does oil down to luck of one variety or another. Perhaps the genetic blessings that you've been bestowed with or not been bestowed with all your parents of childhood traumas or whatever it might be. But you can't be fatalistic about it and sort of blame your entire station and life on deterministic events.

You actually do have to take responsibility. So how do you balance that? It's clearly not a matter of just you know, vibing with the universe and putting out your intentions, the secret style, but it's also, yeah, it's also not to say that there's nothing you can do. So my frame for optionality is, well, you can make your own luck. So look for those asymmetric opportunities and just snap them up, just build a portfolio over years. And you don't know, you can never be sure if they will pay off if you take one of these speculative plays. And probably they won't, you know,

the chances are against you and any given one of them, but the idea is you're building a portfolio. One of them is going to pay off at some point in time, at which point you're going to be okay. So you just keep stacking up opportunities wherever you see them and maximizing your chances of getting lucky. So you can't, there's no guarantees. I can never say you're definitely going to you're all your dreams are gonna come true. And life's gonna be sunshine and lollipops. But like you can definitely put yourself in the position of getting a transformative upside

and it's that stoic principle again of focus on the things that are within your control. Universe could either make you or break you at any point along the way, but you can give yourself the best possible chances of actually getting a good outcome. Hording options indefinitely is for cowards. Right, so,

if you are on your desk bed and you're very wealthy, then one view of the world is that you've done very well for yourself and are admirable. And another view of the world is that you've fucked up because it's that Jesus thing that a camel will pass through the eye of an eagle more easily than a rich man will make it into the kingdom of God so into heaven. Sorry, so Optionality has diminishing returns because it's sort of raw potential and you don't want to just be sitting on raw potential And definitely it's very useful to always maintain

Some level of optionality, but the point is to take risks like the point is to do something and sort of leave the world in a better place than you found it. So looking at money for example if you have a bunch of money and you don't deploy it anywhere, you know you just sort of have it a mouldering wound or mattress or whatever it might be, you could have invested that money. You could have deployed the capital to the place where it connections could be Do the most good or you could have spent and put it back into the economy or you could have given it to someone who Will get a much higher return on investment from that money. So if you're just hoarding options until the end of time My argument is that

Once you have made good once you've got yourself in a comfortable position, you're taking care of you and yours, I think it is sort of a, not a, I don't want, necessarily, one of the frame as a requirement, but like, it's a very attractive opportunity to use your expanded range of choices to help open up other people's options and capabilities. Just because you've already tapped out, you've hit the point of diminishing returns. You don't need more opportunities, you don't need more money, you don't need more friends. Right? These things that you can't have an infinite number, it's not going to help you.

But it'll be transformative to other people. So this is sort of my preaching bit, but like, yeah, I'd like to see people open up their options. And a selfish way is why not, but also then use their position to help other people. I suppose this isn't just limited to financial either. So you can imagine someone perhaps in a relatively okay middle class position, who's maybe had a ton of different ideas You know for invention maybe there are maybe there are low level engineer or a code or something like that But it was safe for them to stay within the particular firm that they were at and they made it to 55 and got a big fat penchant because they've been in them for 30 years But had they've decided to deploy on some of those options they could have had So much more flourishing they would have felt better the world would have actually been raised up the whole consciousness of the world

Would have been improved because of whatever the cool thing is that they're gonna do So that would be hoarding options in one way and then I suppose as well people can hoard their networks It's built into my blood because my business is that of a club promoter that I adore linking people in. This guy, this guy, you need to get him on your podcast and this author need, you should speak to this person and they're probably sick of it. They're probably sick of me constantly sending emails like, put Greg McEwan that that wrote essentialism. Like I've become his booking agent, like constantly, mate, mate, you need to go on to the Ben Burjorans podcast

and this guy loves you and this guy loves you. It's just as well he's got an assistant so he's not being hassled with it. But my point is that a lot of the time you can imagine someone would not only hoard, perhaps money, they would hoard intellectual wealth and some of that would be conscious, i.e. a fear of committing to it,

because as soon as you put a target or a goal out into the world, you give yourself the chance of not achieving it, which is failure, which is scary. But another side of it would be someone consciously doing it. I don't want to share my insights about the financial market, my networks about this, my spare room in the house, which is currently unoccupied, a lower rental rate that allows a family to move in. All of these different things, there's a ton of different ways that people can be cowardly

by not acting on options. And certainly this year for me, I've thought that trying to err on the side of action first, in my experience we all are quite hesitant creatures and that makes sense because we're both predator and prey evolutionarily which is an odd situation to be in. We can be eaten by stuff but we also eat stuff. So we're tentative by nature. But, earring on the side of action, David Allen's two-minute rule. I was like, it's a really good one for just day-to-day stuff. But even bigger than that, like, okay, what would it take for me to get this,

the minimum viable product of me starting this thing going? Or me beginning that friendship with that person? Or me saying something to that girl over the far side of the room? Or pick whatever it is that you are having that conversation with my boss that I think treats me a little bit badly. All of these different things until you put them out into the world until you actually decide to commit they're just notions they're just fucking ephemeral clouds these weird thoughts that no other human except for you are going to be aware of. And earring on that action first mindset is something that I definitely want to cultivate

more in myself and I think a lot of other people would benefit from too. Yeah, I agree. I think especially if the cost of doing so are minimal and it's basically like a motivational issue or sort of just pulling finger, like just make a little experiment, make a small bet, and then iterate, right? Like, you know, you'll learn something from it, but I like that framing, I think you should definitely be, trying to get more data about the world as quick as you can, which will usually look like doing something,

just make sure it's a reversible thing or that it doesn't expose to any kind of large obligation and then take that action. What is a concept from Talib that more people need to know about? One that perhaps isn't as common as the black swans and anti-fragility and stuff like that? Yeah, I love his idea of a barbell strategy. Well, it's not actually Caleb's idea, but he does write about it, which is basically

taking a sort of bi-modal approach to life where you're extremely extreme and aggressive and one particular domain, and then you're very high-per-conservative at the same time. So you think about like a, yeah, like a barbell, there's one big lump and then there's another big lump and then there's nothing, you know, there's just a thin line in the middle. So I've found that really useful and also it's a few is actually. So just to give you an example, I have this like barbell strategy for buying stuff. So what that means is I want to have the best in class stuff, things that really bring me joy and that I love and that might be quite expensive and that are very good quality. Or I want to have like whatever the cheapest version of that is, like the very thing that I pick

up at the thrift shop without giving any particular thought to, or the thing, maybe I buy it in the fast fashion item or something because I don't particularly care about it. And then I want to have nothing in the middle. I don't want to have like middle of the road stuff where I have to think about it and it's not that great. Or I pay quite a lot of coin for it and it's not going to last me very long. So yeah, I kind of I've found that quite quite liberating thinking about also forces you to think about like what it again, what is worth having, what is worth concentrating on. What are some of the examples of products that you've applied that thought process to?

products that you've applied that thought process to. Yeah, so I have, there's a community called Biate for Life on Reddit, which I think is pretty cool. And well, maybe I'll give you some context. I've been traveling for about four years since I quit my job and I've been living out of a suitcase. So I haven't owned anything and I got rid of everything before I left. So I had my sort of 4-ket of clothing that I could wear over and over again. It's made out of marino wool. And then that's expensive and then I put some fort into acquiring.

And then I'd also just pick up sort of bits and pieces as I was traveling with basically no thought put into them, like you know a t-shirt for working out or whatever. And then if it gets dirty or stolen or something, I don't care, it's just, you know, it cost me $2 or whatever it might be. And then since coming back to New Zealand, I'm sort of thinking of moving into getting settled down a little bit and actually wanting to acquire

positions. So I'm using the principles of this biode for life community to think about what are the things that I will have that I could potentially buy forever. Right now I'm researching Chef's Nights and I've got some answers on. Cool. Yeah, I want to get it once and I want to look after it and be intentional about it and care for it forever.

So this is on my hyper sort of aggressive, expensive end of the barbell. Something that I will use every day, I'll get a lot of utility out of and pleasure out of. And that's worth actually diving through that annoying consumer capitalism, labyrinth four. But I don't want to do that with some middle of the road stuff and do it five years later when this one craps out on me, you know.

Yeah, that is cool. I had a Rory Sutherland on the show recently, a behavioral economist from Oglevy advertising, one of the most unique force of nature humans on the planet. And he was talking about exactly the same thing. And he spoke about how he thinks middle of the road fashion is dead. So the marks and spences are the debenums of the world, which is sort of 50 quid for a pair of jeans, or sort of 35 quid for a t-shirt, is just from a psychological perspective, totally mute because you get a particular rush when you get a bargain, when you get a where it wants for a fiver, piece of clothing, and you also get a nice rush and a sense of satisfaction when you buy 130 quid pair of replay jeans that you know are going to be around for a decade,

but you don't really actually get any sense, it's just that I've paid a fair price for a fair item. Like, this isn't exciting. Like, it's okayly made. I'm not really that excited about it. I'm going to have to care about it, but I didn't really pay that much to care about it that much. It's just so vanilla. And yeah, I have the Babel strategy as one. Also, that I'm a huge fan of from Talib. Richard Mann, I really, really have enjoyed today. It feels like we could have done many more of these and perhaps we will do in the future. Optionality, how to survive and thrive in a volatile world will be linked in the show notes below on Amazon. If this has been the sort of thing that you've enjoyed today,

then I highly recommend that you go and pick it up. Any other things that you want to plug where else should people check you out online? Yeah, I think coming, say hello at my blog, which is the deepdish.org. I encourage people to reach out and say hello because I want to build about my network and it's one of those cheap options to take out. And yeah, if you want to know about the book, go to optionalitybook.com and you can see a little preview and some what people are saying and also get links to the various retailers. Awesome, man. Thank you so much for today. Thanks for having me, Chris.

Thanks for watching. you