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What retirement means to me

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Personal Finance, definition, early retirement, golf, philosophy, retirement, semi-retirement, trading

What retirement means to me

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What retirement means to me

via Early Retirement Extreme:

Following this post, I got this interesting question from “The Executioner” (slightly rephrased)
“You still have a full-time job, right? How can you call your blog “Early Retirement Extreme” if you’re still on some...

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#Definition, #Early-Retirement, #Golf, #Philosophy, #Retirement, #Semiretirement, #Trading

domenica 2 marzo 2014

The end of simplifying

Is simplifying the end or merely the means to an end? When I was moving around—I’d really hate to say traveling, because whenever I relocated [to a new country] I would stay for a few years—simplifying by which I really mean decluttering made life easy. If the stuff fits within the allowed airline baggage limits (used to be 2x32kg), which are getting smaller and smaller (now it’s 1×20 kg) due to peak oil, it is much easier to move compared to having a moving company organize a giant container.

If you are one of those traveling bloggers, which we used to know as backpackers have been lifted or the amount of purchases have reached a more reasonable level, it does in my opinion make little since to continue decluttering for the sake of decluttering. Of course, if that’s your thing, go ahead and do it. I’m speaking strictly from my perspective here.

What is often the case when someone reduces his stuff that much is that ordinary life functions like cleaning, cooking, repairing, and making, are either outsourced or they are simply made irrelevant by a change of interest.

Is it a coincidence that many minimalists are runners and writers? I admit they if they weren’t writers we might not know about them, but in the other hand if you play hockey instead of running you can not be a minimalist zealot.

I am going to claim that there is an economic progression which goes from “buying everything within sight” to “buying only what is needed and decluttering” to “not buying and maintaining” to “making and creating”. Without skills in making and maintaining, the only option other than buying is really not buying and doing without. Since we are all mostly a bunch of specialists by training and thus has very few useful skills, that is our only choice initially.

Long time readers may have noticed a progression from minimalism to repairing over the past year or so. I believe I am moving on. If you stick around, I will hopefully have moved onto making things next year or so. I think one catalyst was when a reader told me that there really was nothing wrong with having stuff per se if that stuff served a useful purpose. Indeed, there is nothing glorious about being a minimalist. It is neither incredible nor amazing. What I care about is functionality and the ability to do things. I want to maximize those. I do not want to minimize stuff beyond the point of eliminating redundancy because going further means cutting into functionality and this only makes sense if the minimalism is turned into an article of faith where people derive pleasure from believing in something for its own sake, that is, it becomes an end rather than the means to an end.

Daily Yakezie: Is Frugality the New Superiority? @ 151 Days Off

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The end of simplifying

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Personal Finance, minimalism, philosophy, stuff

The end of simplifying

The end of simplifying

via Early Retirement Extreme:

Is simplifying the end or merely the means to an end? When I was moving around—I’d really hate to say traveling, because whenever I relocated [to a new country] I would stay for a few years—simplifying by which I...

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#Minimalism, #Philosophy, #Stuff

giovedì 20 febbraio 2014

Progressquest your career

I just got introduced to the brilliant game ProgressQuest which along with Bartle’s observations of the online gaming world is rich in applications for understanding the real world, which in many ways can also be compared to a big game.

Perhaps, a designed game?

ProgressQuest is a spoof on the MMORPG habit of “grinding” for experience points, that is, engaging in a non-entertaining behavior (killing non-player monsters) to achieve some other end, specifically an increase in levels, wealth, special weapons.

Just stop me, whenever you get the point of this analogy

ProgressQuest requires very little interaction from the player. If it does require interaction, the interaction is meaningless. For instance, you can choose an affiliation—it doesn’t matter though.

In the game, which plays itself (the spoof is on the autokill function which relieves the player from going through the self-similar repetitive motions of trivial combat), you head out to the “killing fields”. Here you slay monster after monster (serve customer after customer, write report after report, take phone call after phone call, …) each time collecting a small reward (something the monster drops (an affiliate bonus, a sales commission, a mark on your resume or publication record). Once you have enough rewards, you automatically head back to town to sell them for a level upgrade (career rise, home upgrade, …) or a special weapon (vacation, new car, … ). Then you go right back to the killing fields.

I’ve been playing it for half an hour now. I can’t help to admit it’s kinda fascinating in a comatose kind of way—like watching TV—to follow along. It’s “engaging” to watch what you’ll kill next or what kind of “level” you’ll advance to or what “special weapon” you’ll be able to purchase.

Much like real life…

Bartleby divided online gamers into four categories: achievers, explorers, killers, and socializers.

In short…

Achievers play to gain points, rewards, levels, weapons, etc. (they act on the world).

Socializers play to interact with other players.

Explorers play to interact with the world, discovering new things.

Killers play to act on players, that is, killing them.

ProgressQuest is a spoof on achievers. Achievers care mostly about advancing in the system. Most people are actually achievers, and so most online games, computer games—and dare I say the real world—is designed with achievers in mind. You can get them to do anything (specifically, hand over their time in the real world, and/or hard earned money in the gaming world) simply by making up titles, small rewards, special things, stuff that they can hold out demonstrating to the world of their achievements.

Try to click on the link and play it for while. Now, suppose you got $50,000 per year just to watch it or maybe it wasn’t fully automatic, but you had to click A to attack, and occasionally go back to town to convert loot and experience points into status symbols, that is, do something mentally unstimulating on autopilot. Would you take the job?

Have a red pill Swallow hard.

What is most fascinating to me is that this grand piece of social engineering works beautifully. I am an ‘Explorer’, which I suppose allowed me to figure out how the game works and adequately ‘hack’ it to get out the back door. I “retired”—looking for ways to spend my time that does not involve “achieving” and “being all I can be” by collecting levels, gold, and trinkets.

Using the Gervais analogy, the Killers are the Sociopaths, the Achievers are the Clueless, and the Socializers are … well, the analogy kinda breaks down—or at least I don’t see it anymore. In the gaming world, Killers frequently attract followers who look up to them. I do in some sense look up to Killers (maybe because they kill achievers… muhahaha ). In the real world, Killers work on Wall Street and in the top floor offices. I kinda see Socializers as Eloiburgers and the Achievers as Morlocks. The Explorers are the “hackers”. Killers can’t touch them, and the other groups don’t care about them. They exist outside the system, because they have gone beyond it.

Here the system we know is that of a college degree followed by 40 years for 9-5 jobs followed by a retirement home. This system is but a part of the world. Luckily, there’s still much of the world left to be explored. The tricky part, from an early retirement perspective, is how to explore it. Much of the world is built around achievement in the sense of amassing experience points. Been there, done that; life is too short. The challenge, now, is to find a different quest.

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Progressquest your career

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Personal Finance, achiever, early retirement, eloi, gervais, mmorpg, morlock, philosophy, strategy, work

Progressquest your career

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Progressquest your career

via Early Retirement Extreme:

I just got introduced to the brilliant game ProgressQuest which along with Bartle’s observations of the online gaming world is rich in applications for understanding the real world, which in many ways can also be compared to a...

Read More: Progressquest your career

#Achiever, #Early-Retirement, #Eloi, #Gervais, #Mmorpg, #Morlock, #Philosophy, #Strategy, #Work

domenica 9 febbraio 2014

Utopia

In our brave new world, progress is the process of inventing and creating products and services that can be sold at a profit to the consumer. Here, profit takes precedence over all other values, and so marketability is the primary form of aesthetic value. Thus, the product that sells the most IS the best. Therefore products are offered in a narrow and censored range that appeals to the widest possible number of people; not because they were superior but because that is where the crowd converged. Status is measured in the sheer volume of generic products a person has bought. The crowd, which always exhibits the lowest common denominator of human behavior, and which is easily manipulated is somehow thought to be wise. Individuals become authorities simply because they are famous. Popularity is a virtue and appearance is everything. Brand names dominate because they confirm the fantasy world inhabited by the consumers. Everything becomes a matter of opinion: People are guided by what they “feel”, not by what they think. And they are judged by what they say, and not by what they do, and mistakes are always somebody else’s fault. Maturity is measured by conformity. Professionalism is measured by productivity rather than independent and sound judgment.

Hmm…

Progress should be the process of inventing products and services that make life better for consumers and producers alike. Here, sustainability and viability takes precedence over all other values. After all, what does it matter if our grand children inherit an unlivable word? Production becomes an art rather than an automated science, where quality is an inherent factor and exquisite craftsmanship is offered in a wide range of works. Decadence and human expression is treasured. Conformity is dead. Status is bestowed in terms of the quality of the craft, the wisdom of judgment, and the soundness of character rather than image, brand, and quantity of consumption. Individuals are recognized based on merit and character rather than popularity and marketing. People think! There is a distinct difference between facts and beliefs. Judgments are reached by reason. Maturity is measured by wisdom, and character is not defined by what is said but by what has been done.

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Utopia

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Personal Finance, craftsmanship, individuals, judgment, opinion, philosophy, precedence, production, products, soundness

domenica 2 febbraio 2014

Tools

You, sir, are a tool. You are a tiny part in a big machine and you must do your part lest the machine fail. You are cog in a long chain of cogs that turn the wheels. A cog turns you and in turn you turn another cog like a well oiled machine.

You are a tool. You must be professional and not give any thought to anything else but doing your job. This is your life. Yours is not to reason why. Thinking is discouraged as it would distract you from your purpose of doing your part. Stick to your training and do what is expected and your career will proceed smoothly and you will be rewarded with the distractions that the machine produces to indirectly allow its own propagation through you. Quality distractions will keep you from thinking but not detract from your performance in serving the machine.

Living according to specification is what keeps the machine working. Imagine that a piston in a machine did not fit into the cylinder; imagine that a push rod did not want to push. If this happened too often, the machine would not function well and it might even stop working. Just imagine if you had a tool, like a blender, and it decided that it did not want to blend. This would be unacceptable and you would replace it. Tools must be dependable!

But do not worry, scientists and engineers are working hard to develop tools to replace you with more dependable versions even as managers and politicians are working hard to replace you with other cheaper and more desperate people.

As a cog, you must fit in and be a part of the machine to be useful. Voluntarily being alone and desiring solitude is a horrifying thought to a tool. How can it exist without depending on others and in turn being depended on? How can it be trusted to do its part if it commits to thinking on its own or acting deliberately? This is why individualism is discouraged. No, you must be social and the best way to be social is to seek out and consume the same distractions: fashionable clothing, TV shows, home renovations, … and support the machine in the same way, going to college, investing in funds, paying the bills, and pursuing a career as a professional.

Remember: Yours is not to reason why. Yours is to do your job and be successful, in the same way as everyone else.

The machine can only exist if you do your part.

This concludes today’s motivational speech!

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Tools

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Personal Finance, philosophy, work

martedì 28 gennaio 2014

Programmers, ultra-marathons, and voluntary simplicity

I discovered the simple living network thanks to a blog by Fred Ecks(*). As far as I have been able to understand he decided to quit his job as a programmer at age 35 and adopt a simple lifestyle. He now spends time renovating a sail boat and doing ultra-marathons.

Sounds eerily familiar. Here’s another programmer that decided to take a break and run ultra-marathons. A large part of my job iswas in programming and whaddya know I have been drawn to long distance myself. Nothing like these guys, my records are a half-marathon and a half-century on my bicycle which weren’t so hard to do. I imagine I could easily get into longer distances if I had 2-3 hours to dedicate to it every day.

In retrospect. No, not that easy.

(*) Much thanks goes to Beany for suggesting this blog.

The interesting question is always “why?” Why are programmers drawn to endurance events? I think a good part of the reason is that programming (which is often done in marathon sessions with a few hours of daily “training” or maintenance) tends to create a sense of technological and mental isolation. It is something that is happening within the artificial world of the computer. The body is wholly disconnected from the process. Eventually once the program is finished one does not even get the satisfaction of creating the output. Just press enter and the computer does it all.

I read a very interesting example over at AllFinancialMatters about how people have been come disconnected from the products they create. I think programmers become disconnected in an extreme and particular way. One way to bring balance is to go equally extremely in the opposite direction.

Running (and training for) ultra-marathons is similar to programming efforts in their duration but this is where the similarity ends. Marathon running is executed not by the computer but by the person. Also it is felt deeply in the body while the mind is left free to wander e.g. no headaches from overworking the parietal lobes (area of the brain located over the ears behind the temples responsible for reading and mathematics) but rather a dull ache from the low level pounding followed by the endorphins of a runner’s high. Also compared to road marathons, ultras are friendly and not cut-throat competitive like road-marathons or career building.

So what has this to do with voluntary simplicity?

I occasionally get the impression that people think we live in squalor because we spend so little (because of a general belief that that’s how people who earn little live). I think the point I would like to make is that we spend “differently”. It just happens that “differently” translates into “little”. Here’s a quote from the main page of the simple living network:

Simple living is not about living in poverty or self-inflicted deprivation. Rather, it is about living an examined life — one in which you have determined what is important, or “enough,” for you, discarding the rest.

… and I think this is exactly the point. What is important to many people is

A house with several bedrooms and bathrooms.

One of more fully loaded full-size cars.

A college degree with some pedigree.

Demonstrating success (dressing well, going out, buying things).

These things can be very expensive. Here’s what is important to me

Financial independence (roughly the same cost as a (pre-bubble) middle class house in whatever area you live in).

Being sufficiently strong to routinely walk 8 miles, cycle for hours, scale an 8 feet wall, and basically being physically capable.

Being widely read, and basically intellectually competent. I hold the renaissance ideal that one “should try to embrace all knowledge and develop their own capacities as fully as possible” in high regard.

So maybe we live in material squalor(*), but on the other hand I can not really imagine only knowing what I’ve been trained (educated) to do and having to show up for work every day to afford all my possessions. That would be squalor in my value system that favors independence and competence.

(*) Our living like students would be a fair assessment. However, we have lived like students for quite a while now. And instead of buying cheap stuff and replacing it when it breaks every couple of years like students do when they can’t afford quality, we have eventually gathered a collection of nice stuff.

Other links of interest:

Musings on UltraRunning and Finances

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Programmers, ultra-marathons, and voluntary simplicity

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Personal Finance, bicycle, duration, endurance, lifestyle, marathon, philosophy, polymath, satisfaction, sessions, squalor, ultra

lunedì 27 gennaio 2014

Why it is so hard for Americans to be healthy and not spend money

The American health care system is broken. The reason is not that employer group plans makes insurance more expensive for those who don’t have an employer. No, the reason that the American health care system is broken is because Americans universally tend to believe that

Technology can solve all problems.

If you spend enough, you can get the technology needed for step 1.

This is also the reason why so many people believe that they need a lot of money just to get by. Possibly this attitude comes from the country being one of engineers and businessmen (eggheads and peddlers? ), so lets use this as a model to explain why this combination of thinking fails to solve complex problems.

Technology solves simple problems that usually involve few parts with few degrees of freedom. A pair of scissors has two parts and one degree of freedom. There is roughly one degree of freedom every time on part can move independently of another part. An operating engine has many parts, but most of them are locked together, so effectively there are less than a dozen parts and maybe a handful of degrees of freedom for the different pistons and valves. It is an exceedingly complicated machine that has more than a couple of dozen degrees of freedom on the same level. In more complicated scenarios one builds a hierarchy of solutions if possible. For instance, logical circuits are gathered together on a computer chip, circuit boards are designed with chips with little consideration of the internals of the chips and so on. Compartmentalizing knowledge like this is a great tool but also a great source of weakness (like any great tool is). If humans were sufficiently intelligent, the hierarchy could be leveled and substituted for complexity (like the human brain). The fact that we have not invented artificial intelligence speaks to the fact that we have not mastered complexity.

Complex problems involve many agents with few degrees of freedom or few agents with many degrees of freedom. Examples of the former includes economic bubbles (herd mentality) and the war in Iraq. Examples of the latter includes being healthy and making efficient consumer choices. Assuming the risk of offending 90% of my readers I would say that the American mind(*) is culturally disposed to do worse at these kinds of problems compared to other nations. Conversely other nations do worse at simple problems(**) such as technology and business.

(*) Here I am talking about predispositions (stereotypes) and not the color of one’s passport. Not all Americans act like the stereotypical American just like all Germans do not act like the stereotypical German. Yet if one observes a people over a sufficiently long time there are certain tendencies that one can identify as American, German, Japanese, French, Chinese, …

(**) Make sure to understand the difference between simple problems and complex problems. Simple problems have few parts and few choices or many parts and many choices. Complex problems have few of the one and many of the other. Simple problems can be difficult to solve. Complex problems are often impossible to solve.

I think the recent track records of the economy and the war speak for themselves so lets consider health and consumer choice which is pertinent to this blog. Being a resident alien (and having lived in a few countries) gives me somewhat of an amateurish anthropological advantage in observing the natives. I have frequently seen that whenever Americans need to fix a problem they instinctively turn to Walmart. If you can’t find your hat – go and buy a hat. If that hat is too warm, too big, too red, go buy another one. If the hat example sounds ridiculous just substitute hat for shoes. I bet you have more than 5 pairs of shoes. If you’re hungry, you go and get pizza. And so it goes. Due the innate lack of ability to improvise and find complex solutions, that is, the inability to use fewer things to solve more problems necessitates solving problems by getting many things to solve many problems. Hence the lack of complex skills needs to be compensated by spending a lot of money on a lot of stuff and a lot of service, for instance the US is the first country I’ve been to where it is normal not to do your own taxes. This invisible inability is the main barrier to financial independence for many people. The only solution they know in terms of solving their problems is accumulating a lot of money.

This attitude fares no better when it comes to health care. Many Americans believe that the most important thing they can do remain healthy is to get a good health insurance plan. People cry for affordable health insurance rather than affordable health care or affordable health (clean water, clean air, nontoxic houses, nontoxic food, ..). The belief is that once you get sick or decrepit (and it is widely believed that everybody gets to that point eventually) then you or rather the insurance company throws [their] money at the problem and doctors fix you with technology much like cars are fixed in a garage, the economy is fixed with a stimulus package, or political problems are fixed through the use of superior firepower.

Yet when it comes to health it is always the responsibility of the individual. Health care is mostly about what and how much you eat and how and how much you move. If you eat more than you move, you are unhealthy. This eventually results in all sorts of complex problems (diabetes, clogged arteries, …). If you eat wrongly, the chance of cancer increases. If you are relatively weak (if you can’t do a pull up or a 30 second handstand then you are relatively weak), there will be problems with broken bones, joints, etc. down the line. Problems like strain and overuse also arise from moving wrongly. Thus health care starts with eating and moving correctly. This is common sense but people fail to apply it. Many people are much more likely to pop a pill than to prevent getting sick in first place(*). Forsooth, eating vegetables is widely considered to be more painful than paying several hundred dollars a month in health insurance.

As we get old expensive cancer treatments, joint replacements, etc. are required because of the idea that bodies are to be repaired rather than maintained. This attitude (coupled with a litigation happy public/justice system) causes Americans to pay close to twice as much for their health as the nearest country for the same level of health. I wasn’t surprised when I saw a financial institution predict that Americans needed to save $225,000 to to pay for health care during retirement.

(*) Don’t believe me? What do you do for allergies? Stop eating the food, petting the pet, or staying indoors when the flowers are blooming? Or do you pop a pill? What do people do for bone strength? Lift weights? Or pop a pill?

Now “an ounce of prevention is worth a pound of cure”, so for early retirement/financial independence it becomes crucial to learn how to deal with and think about complex problems. Health issues must be prevented before their appear. This means exercising daily at high intensity. It means cutting back on salt, meat, and dairy products while eating more vegetables and fruits. In terms of problem solving it means learning how to improvise(*) rather than “buying” whenever there is a problem.

(*) We used a cardboard box insulated with aluminum foil to store the ashes of our wood stove and a small garden shovel to rake the [cold!] ashes out until we got a nice set of fire place tools and a metal bucket via freecycle. Similarly the puppy currently used a set of cardboard boxes (which actually hold DVD cases and various other crap) taped together with duct tape and covered with towels for traction as a ramp for the couch. That is, until we find a free or cheap ramp somewhere.

For more info: Why it is so hard for Americans to be healthy and not spend money

Why it is so hard for Americans to be healthy and not spend money

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Personal Finance, americans, complexity, freecycle, health, health-care, insurance, philosophy, problem, technology

giovedì 23 gennaio 2014

Is it not strange that …

… modern culture does not seem to value individual independence of thought yet it values individual comfort. Conversely, collective thought (an oxymoron really) is valued whereas few care about collective comfort.

Actually it is both strange and quite sad.

It begets the question whether this preference is evolutionarily determined or conditioned by culture. One thing I keep wondering about is that perhaps only 10% is naturally inclined to thinking critically whereas the other 90% are mostly inclined to believe and have faith in what they are told. I can certainly see how having too many people thinking would lead to instability. Conversely, I can also see how going along also leads to a dangerous situation. Hence, there is an optimal number where a small fraction of thinking people in the population slowly adapts the entire population to new environments.

There is also an evolutionary concept called inclusive fitness. This can be used to tackle the comfort question. However, it is difficult to explain the widespread “F*** you, I got mine” attitude within that context. But perhaps, for humans, only a small number of considerate people, people with sufficient emotional intelligence, are sufficient as well; to essentially sacrifice themselves whenever the inconsiderate (oblivious?) majority goes too far.

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Is it not strange that …

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Personal Finance, culture, modern society, philosophy

mercoledì 15 gennaio 2014

Guest post: Fulfillment

This is a guest post from Peter Lawrence author of The Happy Minimalist. He was born and raised in Singapore and lives in Santa Clara, California. He has been able to retire well before the normal retirement age not because he won a lottery, inherited wealth, or joined a start-up. Peter attributes his early retirement to his minimalist lifestyle.

Sometimes, some people can keep eating and yet continue to feel hungry. Gorging oneself with empty calories is no substitute for the essential nutrients that the body needs. Eating a variety of different colors of fruits and vegetables together with nuts, grains and legumes can provide the necessary nutrients that the body needs such that one can actually cut down on the calories without experiencing hunger. Calorie restriction is a proven way to slow the aging process and maintain peak vitality. The goal should then be to consume nutrition dense food rather than calorie rich foods. Unfortunately, many people choose the latter. And when they continue to feel hungry, they continue to stuff themselves with the same junk, processed or packaged foods. But no amount of foods rich in energy but poor in nutrition will fulfill the body’s craving. Likewise, no amount of material stuff can fulfill our highest needs.

In 1943, Abraham Maslow put forth his theory of human motivation commonly known as Maslow’s hierarchy of needs. At the bottom of the pyramid are the physiological needs. At the apex is the need for self-actualization. In the developed world, despite having easily fulfilled our lower level needs, many don’t seem fulfilled. The reason is they are trying to satisfy their highest need with lower level stuff. The pursuit to keep up and beat the Joneses is deemed as the ultimate success. As such, they continue to play in the lower levels of the pyramid instead of recognizing that they have enough and transcending. As long as you are stuck in the mode that you have to have a bigger house, a faster car etc; you are never going to be fully satisfied .Just as your body’s needs cannot be satisfied with empty calories, your soul’s cravings cannot be satisfied by material stuff either. As Abraham Maslow said, “A musician must make music, an artist must paint, a poet must write if he is to be ultimately at peace with himself.”

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Guest post: Fulfillment

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Personal Finance, early retirement, guest post, maslow, minimalism, peter lawrence, philosophy

sabato 4 gennaio 2014

A duty to work

Occasionally, albeit rarely, I get a comment that one has a duty to work insofar one able-bodied vis-a-vis able-brained. This is a fairly complex comment which suggests either socialist or collectivist beliefs, that is, everybody has a duty to work and a right to eat in the sense that first and foremost people have a right to eat and those who can work therefore have a duty to feed them; or it suggests a protestant work ethic in which work somehow brings salvation; or lately, that I have to perform the sacrifice of working because my ancestors did so — this conceivably has to do with the modernistic myth of linear progression (our culture is the best because it is the most recent?!) and manifest destiny.

Incidentally, I do not believe in any of those.

Sometimes this thinking extends further. If you have a specialized or valuable skill, that is, valuable to others, not you, it is your duty to use it. For instance, if you are a highly skilled engineer, it is your duty to engineer even though you would rather be doing gardening. The rationalization behind this is that many more people can become gardeners but few people have the talents for becoming engineerings and therefore, this engineer talent must be used for engineering regardless of whether it makes the individual unhappy.

I have noticed similar expectations when it comes to being able to work harder or more efficiently. At one point I was working in a storehouse unpacking chain wheels and I noticed that I was about 50% faster than the other two guys. As they were unpacking 3 crates together, I was unpacking two. Yet, we were paid the same. The difference can be rather large. If you are paid by the hour and you are paid the same as the other and much slower guys, you might scale down your effort. Alternatively, if you were paid by the crate, you could go home much sooner. However, if work is a duty, you should work as hard as you can regardless of whether others are slacking.

The argument gets even weirder when the only “valuable” work is work that gets compensated with wages. I think much of the work in our culture is merely a more sophisticated manifestation of Keynes’s idea of digging holes and filling them up again. This is considered honest work even though it produces nothing aside from entropy which is paid for by government stimulus checks or someone slowly going bankrupt. I do something similar when I take my bike and ride 15 miles out and 15 miles back returning to my starting point. Effectively I have done nothing, but I have worked. However, since nobody paid me, it is not real work. If I was a professional cyclist and someone did pay to watch me ride around, it would be work

I don’t think I have a right to eat. I pay my own way and I do so in several ways. First, I worked quite hard for a number of years to accumulate a sum of money that allows me to play the role of a capitalist. This essentially means I fulfill the same role as a banker and moneylender but on a much smaller scale. Second, I do real physical labor, like lifting weights up in the air and putting them back down on the ground. I suppose alternatively I could dig holes in the ground and fill them up again. If a work ethic is inherently good, then lifting weights must be good. Third, I write this blog, which is probably the most beneficial, yet least compensated, thing I have ever done for other people. Apparently I change lives around or at least provide some of the motivation for it. Third and a half, there ~~will~~is also be a book ~~at some point~~, and I ~~will~~ get paid for that, so if the blog doesn’t count, maybe the book does count. ~~Fourth, I copy-edit for a scientific journal. This is actual work for income and I earn more than I can use myself~~, ~~hence Fifth, I work on something else which does not pay anything yet. This is called a start-up.~~ I do believe that all of these produce value and I even believe that most of them provide value for others as well. Most importantly, none of them do any or much harm.

These are all things I do. Whether it is called work or not is fairly irrelevant to me. A housewife is not paid, but she does things which when done professional in restaurants, laundries, etc. are called work. Perhaps, the best example I can think of to illustrate the insanity of “work as a good/duty” is tribal people. Yes, they hunt and forage, but they only do so to feed and clothe themselves. Once they have done so, there is no need to hunt more or cut down more plants. In fact doing so would be considered a great evil. Yet, in our society producing and taken more than we can use is considered a virtue. Perhaps it would be if it wasn’t so destructive to our long term well being. In the developed world, we have so far been fairly isolated from all this since we have managed to outsource our worst and most polluting kinds of industries, but elsewhere, in developing countries (that may never develop) and in nature and the climate, they are certainly feeling the effects of our duties. No, a duty to work is not inherently and unequivocally good.

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A duty to work

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Personal Finance, philosophy

venerdì 3 gennaio 2014

Anti-consumerists can retire early from the rat race

Maybe you have heard comments from the 1950s where some people predicted that the introduction of robotics would lead to work weeks of only a few hours with robots taking care of everything else. I’m sure the steam engine lead to similar predictions. In fact the opposite has happened. We seem to work more than ever. Instead of providing us with more leisure time and less work, technology has made it possible to work even harder at making leisure toys for the masses.

I used to be interested in anti-consumerism. I read adbusters, verdant.net, Naomi Klein and others. People are anti-consumers for a variety of reasons. One is environmental. Making all this stuff and throwing it away next year requires a tremendous amount of resources, raw materials, land, forests, animals – they all gotta go in the name of the latest and greatest. Another reason is political. Since people pretty much spend their money in the same way, people are inevitably divided into classes according to their earning power resulting in political tension. My original rebellious tack was mostly environmental, but presently I think of myself as a poor aristocrat.

It would seem that the values of early retirees are completely different from most people. Whenever I have a problem, my first thought is not to drive over to Walmart and buy a gadget that will solve my problem. Rather, I sit down and wonder how I got this far without spending money and then I find an alternative solution using creativity rather than credit cards. In many ways, my possessions – my stuff, is quite old, but also selected for high quality to last many years. Good stuff ages well. “Fashionable” stuff ages poorly and thus has to be thrown out and replaced with new stuff to the detriment of the environment, financial independence, and leisure time.

The asset/income ratio of early retirees is also completely different from most consumers. It’s not that assets necessarily are very large (you’d be surprised) – rather it’s the income that is relatively low. For instance, I have learned to live quite well on less than $10000 a year. In other words, I am wealthy by definition, but not rich, hence “poor aristocrat”. I don’t have/spend a lot of money, but what I do spend, I think I spend very well.

What are your spending values?

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Anti-consumerists can retire early from the rat race

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Personal Finance, early retirement, philosophy

mercoledì 25 dicembre 2013

The Gamesmen

I was inspired to post the following by a recent mail from T. and some earlier writings on the ecology of society. I would like to draw your attention to The Gamesman by Michael Maccoby. In this book, which I have not read yet but I got a summary from Thoughts of a Philosophical Fighter Pilot by Jim Stockdale, Maccoby identifies four types of people. These types should perhaps more accurately be identified as traits in that a person encompass all these traits in varying degrees.

The four traits are

The Craftsman (Ben Franklin) – characterized as being inventive, self-contained/independent, resolute, and sincere. Since any strength has a corresponding weakness they are also prone to being obstinate, stingy, and suspicious. Craftsmen were the dominant type from 1776 to the early 1900s and laid the foundation of society.

The Jungle Fighter (Andrew Carnegie) – characterized as being tough, competitive, and bold, but also ego-driven, paternalistic, and authoritarian. Jungle Fighters operate in a world of finite resources and thus play zero-sum games. Us against them. Jungle fighters often start from poor circumstances and battle their way up.

The Company Man – much like the jungle fighter but his primary motivation is the fear of losing rather than the desire to win. The company man is loyal, hard-working, honest, and eager to please, but he is also afraid to take risks. Company men were born into the affluence associated with fitting into a structure and they are afraid to lose it. Lacking the skill-focus of the craftsmen and the guts of the jungle fighters, company men were the ones that made marketing and appearance important.

The Gamesman – was the new breed of Ivy League educated people who saw the world as a giant chessboard. The Gamesman believes that everything can be analyzed, dissected, and optimized. And thus the Gamesman does not believe in the zero-sum world of the Jungle Fighter. Rather everybody can win if he plays his cards right. Gamesmen like awards. The Gamesman is cool, detached, intellectual, and open-minded. However, he lacks heart, inspires little loyalty, and does not like confrontations. Gamesmen do not like to fire people. Instead Gamesmen have invented elaborate systems of performance reviews, e.g. “it was not me that fired you – it was your performance review”.

The current world is dominated by gamesmen. Hence the importance of sports rather than having served in the military (war does not allow time-outs and it requires performance under the worst conditions rather than the best conditions of Gatorade and Under Armor, think about it!) as a career ladder asset. Hence the long books on exactly how to behave during an interview, what to say, what to do, and even where to sit at meetings in detailed analyses. The oldest culture, the craftsman culture, is hard to find. If you want to see the difference try to contrast and compare an popular science magazine of a hundred year ago, full of information and requiring a solid foundation to understand (if you can get your hands on old copies, get them!), and a present popular science magazines with it’s glossy pictures and prose written to entertain rather than inform.

Ecologically speaking most species will naturally tend to feed on another species and in turn be fed upon by the next species. It is exceedingly arrogant to think the humans or their culture is the one exception to this rule. At the frontier, the craftsmen rule. They deal with nature and as such are used to dealing with problems that don’t care about the man. For instance, being on a small boat in a storm, the storm does not care if you are seasick – it will kill you regardless. Craftsmen will colonize barren land. They will set up government where there is none. The will invent tools where there were none. The jungle fighters will then move in and capitalize on these tools using them to fight each other until the domain has been conquered. When there is nothing more to fight for and no places to expand into, the jungle fighters can no longer expand. They have reached their population density. Hence they are gradually replaced by more social creatures, the company men. This allows the population density to overshoot. In other words, there are now more people providing essentially the same functions. In other words, productivity per person decreases. Having a fully formed environment with redundant assets to be terminated, the gamesmen will sweep in and start discarding people. In this sense, the gamesmen are like trees that cover the bushy undergrowth of their predecessors.

It is important to note though that the gamesmen are not self-sufficient. This will be a problem that will be realized by the next generation. Interestingly enough it is also inevitable and unavoidable. The gamesmen, which are actually net-negative contributers (this interpretation fits exceedingly well with the focus on appearance and their belief that everybody wins), will eventually cause their own downfall. For instance, it is apparent that as companies eliminated their jungle fighter loyalty to their employees, the employes eliminated their company man loyalty to their employers. This makes the structure less more skill based but less solid (much like a modern bicycle helmet is less bulky and thus less safe while still skirting the standard – yacht racing is an even worse example of this problem, here computer programs design yachts not according to sea worthiness but according to race regulations). I see this problem playing out fast. The main question is, who will be the next type to replace the gamesman. There is a suggestion in Thoughts of a Philosophical Fighter Pilot. I am not sure I agree.

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Personal Finance, business, corporation, ecology, evolution, overshoot, philosophy, strategy

venerdì 20 dicembre 2013

Buying the best from the outset

When delving into a new endeavor (house owner, car, sport, computer, … ) it is often recommended to buy a “beginner” version or a “starter unit”. The idea, as it goes, is to see if one is “really” into this new activity before committing a lot of money. Now, ab initio this sounds a good idea, except that it is an expensive thing regardless. There should be better ways to figure this out. The best way I have found is to start with units that cost time or commitment rather than money.

For instance, it very common to decide to get in shape and then order/buy some (cheap) exercise gadget. However, poor equipment rarely brings satisfaction. Instead what I do is to set a trigger in the form of commitment. For exercise, I would say, do not buy anything until you can run 5k straight, do 10 pull ups or 20 push ups or whatever you consider reasonable. This should be something that will take a month’s work to accomplish. After that point I would say commitment has been demonstrated and a purchase can be made.

At this point I would buy the best equipment I could ever see myself using. For instance, with the bicycle, there would be little difference for me between buying a $3000 bike and a $1500 bike. Even if I had a million bucks, I would not have the skills and strength to take advantage of the $3000 bike. The difference between a $750 bike and a $1500 bike would be equipment limited though. Therefore I would get the $1500 bike as the first bike although if you are only going to use it sporadically, I would consider needs vs wants and go a cheaper one, like this $1.38 mountain bike.

This avoids the upgrade malaise as there is no need to replace existing equipment with something better. It is simply not possible when you already own the best. This strategy has saved my thousands. Yes, so I’m wearing shoes that cost more than $200. However, these are very old shoes, so annual costs are closer to $20. Also, 10 year old $200 shoes look better than new $20 shoes any day.

It takes quite a while to replace one’s possessions with the best. Money has to be saved and also one has to wait until the old things wear out (or maybe that’s just me). After a decade, though, one will end up with a collection of really nice stuff.

There is less use of resources which is an added benefit.

Even better, should one decide to sell it, it tends to have a fairly high used price. For the very best, the used price is actually higher than the new price for a corresponding new item. This is true for HiFi equipment for instance.

Much thanks goes to CR and GH for the donations!

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Personal Finance, bicycle, bike, car, gadget, philosophy, quality, result, satisfaction, shape, shoes, ups

mercoledì 27 novembre 2013

Are we qualitatively different?

If there is anything this country enjoys, it’s measuring things by numbers and then comparing numbers. We divide people into percentile according to net worth, credit score, GPA, GDP, IQ, etc. with the implicit assumption that it is possible to understand the entire scale simply by multiplying by a number. For instance, someone spending twice as much must live twice as well or someone with twice the IQ must be twice as smart.

However, all of these numbers are a function of something that is very complex and nonlinear. Therefore it makes no sense to compare two numbers which are very different. While it is possible to compare the expense level of persons A and B, say $40,000 and $39,000, respectively, and conclude that person B is slightly better with money than person A, it is impossible to compare A and B to person C who only spends $20,000. Here person C would live qualitatively different and make qualitatively different choices. For instance, A and B might have two cars each and here B would be driving a slightly more fuel efficient model, whereas C would not be driving a crappy car. More likely, he won’t be driving a car at all relying on other means of transportation. Hence it is impossible to make any conclusions merely based on comparing numbers.

So how do we compare?

When two things are scaled different, one usually builds ratios. Nobody but an absolute rookie would consider a stock priced at $30 to be twice as expensive as a stock priced at $15, say. No, the ticker price must be scaled by some value. Earnings per share is a very popular scaling factor. Suppose that the higher price stock has an EPS of $4, while the lower priced stock has an EPS of $1. Then the P/E ratios are 30/4=7.5 and 15/1=15 respectively. All other things being equal, the former is the least expensive. Stocks with high P/E values are called growth stocks and stocks with low P/E values are called value stocks.

If we go back to the car example, there are various ways to build a ratio (making up ratios seems to be a primary occupation of stock analysts by the way). We could divide by the number of cars. This would mean that person C would have a ratio of infinity. We could divide by the distance travelled giving some indications of mileage costs or we could divide by the time spent on transport. One or more of those ratios would show a substantial difference.

This is interesting, when one is comparing budgets like frugal vs frugal or when comparing food expenses. It is very likely possible to establish several classes of lifestyles. Comparisons should then be done within a class. For example, it does not require a genius to establish that all value stocks by definition are less expensive than growth stocks. But what about frugal lifestyles? Do some people exhibit a qualitatively different form of frugality. My answer is yes. I have a hard time using frugal tips and suggestions from most personal finance blogs, because they are out of my league. I simply can’t afford to follow their advice

In a future post I will hopefully have been able to develop some ways of classifying the different personal finance setups. Until then any suggestion is welcome.

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Are we qualitatively different?

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Personal Finance, compare, comparison, measure, net worth, personal finance, philosophy, qualitatively different, scale

domenica 10 novembre 2013

Sympathetic magic and the church of positive thinking

Magical thinking is the cognitive mistake of confusing correlation with causation. It is a very common mistake and is due to a lack of critical thinking. A person is particular prone to this mistake if he is incapable of thinking “statistically”. To think statistically one must be able to reason alternative scenarios leading to alternative explanations.

For instance, imagine that we have a digital clock. Now, thinking statistically, we realize that if we look at this clock, the first two digits can show 12 or 24 different values. The last two can show 60 different values. If, however, a mind does not have sufficient mental complexity(*) to “describe” this set of possibly outcomes (there are 12×60 or 720 of them), AND it attaches a special meaning to certain numbers, 11:11 is a popular one, it does not take much of a mental lapse to reach backwards and attach all sorts of meaning to events that coincided with 11:11 if one happened to see just that number instead of say 11:26, but otherwise had no causative connection at all.

(*) A good way to understand complexity is in terms of itself. A system is more complex if it can contain another system. For instance, if A can understand B, but B can not understand A, A is more complex than B.

“Sympathetic magic” is the kind of magic that says that “likes” attract. This can be cast into all sorts of pseudo-scientific language such as Vibrations, Cycles and Resonances, or even Quantum Resonances although they (of course) have absolutely nothing to do with physics. [Someday I would like to learn why such terms are always capitalized in magical thinking literature?!].

What this means effectively is the belief that if you, say, put a picture of a slim person on the fridge, you will lose weight; or if you put a picture of a car, you will get a car. “Attract” a car into your life so to speak.

Sympathetic magic can be materialistic as described above, but it can also be mental. A personal that believes in “mental sympathetic magic” believes that by thinking a lot about being a millionaire, one will attract money; by thinking about losing weight, one will lose weight, and by thinking “Positive” thoughts, one will lead a positive life.

This kind of belief would not be so popular if it was not epistemologically, that is, functionally true to some extent. However, I think we can reasonably say that merely thinking about something is going to obtain absolutely nothing. There is simply no reality-based causation.

What does cause results is a change of behavior; and it so often happens that thoughts result in such change. The magical thinker simply misses this causation though. This lack of observation may be acceptable, but a major problem with positive thinking or mental sympathetic magic in general is:

1) In statistical terms, very many explanations are simply discarded. This means that a positive thinker is simply mentally incapable of seeing negative events, like 9/11, the failure of Iraq, or the banking crisis: all things that were foreseen by many “negative” or should I rather than more realistic thinkers, but which the optimists were mentally blind to.

2) There is a lacking sense of realism. Magical thinking is not really thinking but more a kind of haphazard intuition. Never put an optimist in charge of critical machinery, never, ever, never!

The main problem I see though is the utterly close-minded and fundamentalist attitude that many believers of the church of positive thinking subscribe to: Specifically, the belief is very strong that attitude explains all. Hence, if you fail, it is simply because you failed to be sufficiently positive. You were not sufficiently righteous. The belief that negative or realistic people (nonbelievers?) must be shunned, avoided and ostracized from one’s life as if they were somehow dangerous to one’s faith. In fact, this very attitude suggests that the fundamentalists do realize there is a weakness in their position. They simply deal with it in the simplest possible way, namely, by sticking their fingers in their ears and chanting “happy”, “happy”, “happy”.

Oh the humanity!

There is no doubt in my mind that the better option is to acknowledge both positive thoughts and negative thoughts. They are, after all, simply thoughts. The same thing goes with feelings which are, after all, just another kind of thoughts [of a different part of the brain system]. Excluding some thoughts whether it happens through self-delusion or through medication [Americans love psychotropic drugs] is simply not the best way to proceed because it exclude parts of reality. Are positive thinking people simply unable to deal with reality and as a consequence they have voluntarily created this bubble world where all that matters are perceptions (illusions, delusions, schmolusions)? To some extent, I think this actually is the case. Or maybe it is indeed just an inability to think critically.

In either case it is a problem since the last thing a complex world needs are people who only see half of it or refuse to deal with it.

You can read more about this in Barbara Ehrenreich’s book Bright-sided. I have always considered the concept of positive thinking somewhat fishy but I had not realized just how much it has in common with fundamentalist (here in the narrow-minded sense) religions until reading that book. The main reason for this is that “positive thinking” like “extrovertism” or “postmodernism” has become so prevailing so as to co-opt the language in an almost Orwellian sense so as to make any thinking about different positions sound negative in nature. Indeed I just demonstrated that very fact by my choice of the words positive and negative above.

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Personal Finance, health, magical thinking, philosophy, positive thinking, the secret

sabato 26 ottobre 2013

Cold showers — one year later

When I went sailing on the bay for the very first time, the skipper told me two things:

First, don’t get hit on the head with the boom: You’ll either die or you’ll wish you died.

Second, if you fall overboard, remember to hold your breath before hitting the water. Otherwise, the cold water will knock the air right out of you and you’ll be gulping salt water, throwing up, and running out of air all at the same time.

You probably experienced a similar shock in the shower. When I started cold showers as an exercise in tolerance range, I tried all sorts of tricks to avoid the shock. I started the experiment in the spring and at the time people thought I’d change my mind come winter. Of course, I’m just experiencing the oxymoron of a California Winter, but the water has definitely gotten colder—the water coming out of the unheated water heater is colder than the water coming out the cold faucet from underground.

What’s interesting is that there’s no cold water shock and no tricks needed. I take my showers in a normal fashion only registering that maybe my scalp is going numb and maybe I should move my head.

There are some propane saving benefits in using cold water. It’s quite expensive to heat 5 gallons of water from near freezing. However, a greater benefit is in the freedom of not being dependent on having the water be a certain temperature to take a shower.

Further benefits of cold showers: The bathroom doesn’t steam over. The water is refreshing. You don’t become languid like after a long warm shower. The skin does not become puffy or clammy. The air feels warmer afterward—specifically, you don’t feel like staying just a minute longer just because the air outside is relatively cold.

Warm showers have one benefit: They are not shocking to someone without tolerance.

The lesson should be obvious, but let me hammer home the obvious. The rich person is not the one who sits on a plushy couch or otherwise needs a lot of stuff or a lot of conditions to be satisfied to be comfortable. In fact, such a person is very poor having externalized their ability to be comfortable. The rich person is the one who can be comfortable or happy in any kind of situation.

Newest ERE book review on In The Trenches.

Jacob comments: Pointing out how much it costs to heat water or how much is saved in money terms is missing the point I was trying to make. This would be like asking why one should go jogging when a bus ticket only costs $1.50. The point of jogging isn’t to go from A to B in order to save $1.50 on a bus ticket. It is to get exercise to improve one’s health and make other physical tasks easier. The point of cold showers isn’t to save $10 on heating. The point is to increase tolerance ranges and capability—to make cold, like being outside on a winter day, more comfortable. You probably know people who can clear five floors of stairs without getting winded and get there faster than other people need to wait for the elevator to bring them up. Why would the former even think of using the elevator? This is the state we’re striving to achieve. The point is not to save a few bucks. The point is “better, faster, stronger”. I often get the impression that we’re talking about an entire paradigm shift. A good example is the “couch to 5k”-programs. It’s almost unimaginable to me not being able to run 5k. This is a different level/paradigm than thinking of being able to run as a major challenge.

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