Adventure Capitalist

Passion + Training = Skill. Talent Doesn't Exist.

Sun, 05 Dec 2010 18:33:43 +0000

Natural talent does not exist. Any sufficiently evolved skill is the product of passion and applied training, nothing else.

This sort of statement may seem inflammatory to some, but there is ample scientific evidence to prove it - most of the prodigious “talents” in history who are held up as examples of some divine inspiration which training could not have created where in fact products of disciplined training.

A few examples: Ludwig van Beethoven benefited from having a father who was an accomplished composer and music teacher in his own right, a father who incidentally started training young Ludwig at age 3.
A more contemporary example: Tiger Woods - Tiger Woods’ father made the young Tiger play with golf clubs before he could even walk or speak.

Chunking, Repetition & the 10000 Hour Rule
There are two main components to learn mastery of any skill:

Chunking: breaking down the skill/part into its smallest parts to truly understand each component part.
Repetition: repeating, starting of with one or a few chunks, then adding more composite parts as your proficiency increases.

Another observed rule is that it takes about 10000 hours of practice to become an expert at any given skill. This is not taken out of thin air, but a gross estimation of the time it takes for a healthy brain to develop the Myelin sheath associated with mastery of a skill.

“But I’ll never be a Lionel Messi or Tiger Woods!”
Nope, you probably won’t, but that has nothing to do with their bodies being any different from yours, they just benefit from having started at a younger age than you: if they had already racked up 20000 hours of practice by the time you got around to start, they will always have a 20000 hour advantage on your skills by virtue of having started much earlier. That’s the difference between you and those who seem to have a God given talent: a massive head start, and for sports, possibly the benefit of having achieved the level of skill at a time when their bodies are at their genetical peak for pace, power, endurance, flexibility or whatever other physical attributes are useful for a given pursuit.

Mastery Is Not About Comparing Yourself to Others
Why am I bringing this all up if it is already futile to start pursuing a skill in your twenties, thirties or even older, knowing that those who started at age 3 will always have an advantage?
Well, to me it’s not about comparing myself with others, but to know that I can achieve a proficient level of skill in anything I wish to pursue, as long as I have the passion and time to apply myself towards acquiring those skills. To me it is about being inquisitive in mind and body and hungry for improvement.

As an example, a few months ago, I started exercising some martial arts, at an age where most competitive martial artists are probably at their peak in terms of ability to compete for trophies. I’ll never be able to compete with those guys, but at the same time, by exercising 5-6 days a week, I know that in time I will become proficient enough to protect myself and those close to me from most everyday threats, should I ever have to face your average street robber, violent drunk or road rage idiot. That alone was enough for me at the outset.
But I have also noticed some fringe benefits in just a couple of months, which are probably better than my initial motivations to start: I have better spatial awareness around myself, I am physically more balanced, I have regained a speed and flexibility in my body that I haven’t had since I was in my teens, my posture is better and I have a general sense of better well being.

Simply put, I will never be another Bruce Lee or Yip Man, but as time goes by, if my exercise can knock off about 15-20 years of aging from my ability to physically perform and move, the health benefits alone will be immense by the time I am 50, 60 or 70.

Being the Best You That You Can Be
I find the well-proven concept that there is no such thing as “God given talent” comforting, it means we can strive to be the best we can be - there are no preset limitations in what we can learn or achieve, other than the time made available to us, our physical & mental health, and the laws of physics that govern our bodies and minds.

You don’t have to compare yourself to others, they may have a head start on you anyway, but there’s nothing stopping you from being the best you that you can be.

Higher Education: No More Than Certification For The Corporate Gatekeepers?

Fri, 19 Nov 2010 00:05:41 +0000

I have a bachelors degree in computer science. I spent three years at university getting it. After the first twelve months, I learned very little. I learned more in the first four months of working than I did in the entire three years of university, but that’s not the worst part, the worst part I had to spend several years unlearning many of the things that where taught in university that where just plain wrong and counterproductive! This in spite of me going to a top university in Sweden which is considered a pioneer in the computer science area (they where the first university in Sweden to have degrees in computer science some 40+ years ago).

I know I’m not alone in my experience, I know as far as the IT industry goes, degrees are mostly useless, and it’s probably true of many other industries. It’s passion for the subject/industry, willingness to learn, adapt and keep up to date with developments that counts. I don’t care if you have a fancy PhD, if you’re not willing to keep moving forward, I want nothing to do with you. In fact, some of the worst and most useless wastes of space I’ve worked with have had PhD’s. Some of the smartest guys I’ve worked with have had no formal education apart from being self-taught from a very young age.

Certification, not Skills & Knowledge?
It begs the question: if formal education is often so useless, why do we spend years and masses of money trying to get the degree papers? Is it simply to have some sort of “certification” to get into the corporate world? Knowing that at least 3 years at a university, preferably more is the price of entry, regardless of how good or smart you are?

It seems to me like the certification papers are sometimes more important than the actual skillset and will to hone those skills. Why has it come to this? Education IS important, but it is the skills and knowledge acquired from education that is what is important. Education, formal or informal is a means to an end, namely skills and/or knowledge. If education is not a means to skills and/or knowledge, but to receive a paper certification that certifies that yes, indeed, you where present for most of the 3-5 years, what is it really worth, to you or anyone else?

Autodidactism vs. Academia: Academia Considered Harmful
Of course, there will always be exceptions to my observations, I’d be hesitant to have brain surgery done on me by someone who was not formally trained in the subject for years (though I’d be most interested in their surgery track record).

However, for many areas, formal education has little value except as certification for corporate gatekeepers, what really counts is how an individual applies themselves to learn the subject. For instance, Albert Einstein was mostly self taught. Does his lack of early formal academic credentials make his Theory of Relativity less relevant? Michael Faraday, Thomas Edison and Benjamin Franklin are a few other prominent, mostly self taught scientists.

I’d even go as far as saying that academic education can be considered harmful for furthering yourself in a number of fields:

Computer Science: PhD’s rarely know much about how to write good software or run IT projects or operations. In fact, most of what they’ve theorized in academia is often downright bad and needs unlearning.
Economics: most of the economics taught at modern universities is in plain language, useless nonsense.
Languages: want to learn a foreign language? Don’t go to school, move to the country, immerse yourself and you’ll learn more in 6 months than in 6 years at university.

The list could probably go on for as long as my arm, but I’ve made my point.

Somewhere, sometime ago, the educational system in western society has gone off the rails in a bad way, as has our perception of what education should be and achieve. The results I see from education and the attitudes I see towards education in the West, that it is simply an entry ticket to the corporate ratrace makes me even more sure that Asia will run rings around Europe and the US in this century. Westerners have the wrong idea, and that makes them ill prepared for the challenges and opportunities of the future. Stagnation can only follow unless something changes dramatically.

Let Luddites Point The Way To The Great Business Opportunities of Tomorrow

Sat, 06 Nov 2010 02:40:00 +0000

I had a good chuckle when I read this article from 1995 this past Friday. Basically, the article completely rubbishes the Internet, calling it a fad that will eventually go away. Doing a bit more reasearch on the authord, Clifford Stoll, reveals that he has made quite a career out of being a professional backwards luddite, resisting, criticising and working against any conceivable progress. A statist in the truest sense of the word.

It’s easy to dismiss Stoll and his ilk as shortsighted crackpots unable to see the development that is plainly in front of them. Another angle would be to see them as a viable business of backwardness in themselves: Stoll and guys like Nicholas Carr have made careers out of being luddites, there will always be enough people wanting to stop time to provide a market for people selling them books telling them what they want to hear.

However, as backwards and wrong Stoll has turned out to be, I prefer to see him as a prophet of the future. Why? Well, let’s re-read his absurd article one more time and see what his objections are as to why the Internet will never really be very successful, based on his 1995 findings and mindset:

Irrelevance of search results: I think Google has quite successfully addressed this problem, and made a business out of it.
Content that lacks editing and curating, hence credibility: Hmm, did Wikipedia and other crowdsourced sites address this or what?
Difficulties in getting paid online: I think Paypal, Cybersource and any number of other credit card processors and payments solutions have addressed this space..
The absurdity of the notion that you could connect people and build communities online: Facebook? Twitter? Match.com? Many others?

If you look at Stolls article, each and every one of his objections as to why the Internet would fail, has actually been addressed by one or more companies that these days are household names. In fact, each objection by Stoll was a blatant multi billion dollar business opportunity just waiting to be fixed!

This gets back to one of the core running themes of this blog: many things are simply about perspective and mindset. Some people chose to see objections, others opportunity. In this particular instance, Stoll saw lots of problems, others saw opportunities that made them some of the richest men on the planet.

Every objection holds an opportunity. So the next time someone complains about why something cant be done, listen carefully to his objections, and think of ways you could make that objection go away. If you succeed, it could very well make you the next Bill Gates, Larry Page or Mark Zuckerberg.

Following Your Dreams With a Stop Loss

Tue, 02 Nov 2010 23:33:00 +0000

There’s a lot of talk about “following your dreams” and taking entrepreneurial risks, and I for one applaud anyone who takes the plunge into the great unknown to try to make something out of nothing. I’m sure most who do, even when they fail eventually feel that it was worth it.

But as we all know, sometimes things just don’t work out for us for one reason or another, maybe the timing was wrong, maybe we didn’t get the execution right, maybe we pursued the wrong idea down a blind alley, or maybe someone else was just better. I personally have experience from this, which reads pretty much as “Entrepreneurial newbie mistakes 101”:
Back around the time I was finishing up university I started a business with some friends. That sentence contained the first mistake: At least one of the founders got to go along for the ride simply for being my friend. Then we focused too much on technology and too little on getting customers. And we thought getting funded was the be all, end all goal, so we built a business around impressing VC’s, rather than getting paying customers. And so it went on and on, basically a carbon print of what young kids who are not dry behind their ears do when they get a startup situation horribly wrong.

Wishful Thinking Isn’t a Business Model
My greatest mistake wasn’t the startup in itself though, my greatest mistake was living on wishful thinking for far too long. I didn’t have personal discipline enough to set up clear and time boxed milestones, I didn’t adapt the business direction based on market feedback to generate meaningful revenue sooner, I lived in a fantasy world where I thought by some magic sooner or later something would happen that would set everything on a path to predestined success.
Epic fail. I ended up with a business in need of liquidation, in debt, with a pile of unpaid bills and in a situation where I was stealing toilette paper from public toilettes to be able to buy noodles so I could afford both a clean ass and at least one meal a day. I think I lost about 20 pounds/8-10kg in a matter of weeks due to malnutrition, and I was lean before. Clearly I had let things get out of hand, my wishful thinking had taken me too far down the road for me to manage a soft landing. Had it not been for the good grace of my father and mother coming through for me when I owned up to how bad things where, I would have been in really bad trouble, most likely ending up on the street.

Clearly wishful thinking wasn’t a viable business model or business plan.

Apply a Stop Loss To Any Risks You Take
In financial/investment language there is a concept of “stop loss orders”. In practice this means you set a predefined price below purchase price for a stock you hold at which you simply cut your losses and walk away. It’s a means of defining up front what sort of loss you are prepared to take on an investment.

Though the term comes from stock trading, I think you could and most definitely should use it for most risks you take in life, entrepreneurial risks in particular. Knowing and defining up front what you are prepared to put on the line beforehand will enable you to land more softly than I did in the instance I just described. What your limit should be is probably a personal issue, maybe it’s when you have savings left to sustain you X months on a normal spend so you have time to find a job if things don’t work out, or maybe you can be flat broke and move in with your parents as long as you’re not in irrevocably deep debt. It all depends on what sort of personal safety net you have, how much of it you want to use and how hard a hit you are prepared to take.
But you should definitely make up your mind up front what your worst case scenario is, what the worst thing that you can tolerate is, so you know to quit if you get there, rather than continue on into the abyss.

This may all sound pessimistic, won’t it presuppose failure and undermine your success? I guess that depends on your mindset and perspective. Personally I see it the other way around: if I know how bad the worst case scenario is, I can think “what the hell, if that’s the worst case, let’s go for it!”.

Pretentious Grandstanding Against Strawmen: Corporate Edition

Sat, 30 Oct 2010 21:13:00 +0100

It seems that pretentious grandstanding against corporations is the “in” thing to do among those who consider themselves progressive “intellectuals” - preferably by vacuous armwaving at constructed strawmen. Corporations are said to be everything that’s bad and evil about the world, they are somehow the magical puppet masters that supposedly control our lives and dupe us to become slaves to our corporate overlords, all at the same time.

Exactly how this is done is often left unexplained, however I can assure you that no officials from General Electric or any other major corporation have yet to knock on my door with guns to force me to do their bidding or submit to their will. Though I hear governments and government officials occasionally do this..

What’s In a Corporation?
Ok, I’ll cut the sarcasm now. Let us examine exactly what a corporation is:
A corporation is effectively an individual or collection of individuals who have received a charter from the government to pursue some business goal. In exchange for acting as tax collectors for the government (income tax, sales tax, payroll tax, corporate tax…), the corporation is endowed with certain government granted privileges, such as preferential tax treatment and limited liability for its owners.

Here in lies the crux of the matter: corporations are not a creation of the free market, they could not possibly be! To achieve limited liability, the limitation has to be enforced by government guarantees of such limitation, ultimately backed by governments monopoly on the use of force and the willingness of government courts to look the other way at times in exchange for outsourcing tax collection.

Furthermore, seeing as a corporation is a collection of individuals striving for a common business goal, the morals of a corporation is simply a reflection of the morals of the individuals that make up the corporation.
Hence, corporations are not any more or less amoral, any more or less unethical than any other group of people collaborating towards some goal. The morals would be the same regardless of whether they are organized as a corporation, government or just loosely joined individuals. Believing that government is good and corporations are bad by default, or the other way around is a very oversimplified and false dichotomy to believe in.

Grandstanding Against People
For all intents and purposes, grandstanding against corporations is grandstanding against people. Assigning corporations magical characteristics or evil is intellectually dishonest and fraudulent at worst, thoughtless at best. It lacks any sort of will to investigate the morals of the individuals that make up the organisation on an individual basis.

Both governments and corporations are fictitious entities, they only exist in so far as they are social constructs that are widely accepted. At the end of the day, they are simply collections of people, assembled in various ways, for various purposes, and hence will reflect the collective morals of the people that they consist of. In this context, it is worth considering that some of the worst acts of genocide in the last 100 years where likely initiated by bureaucrats sitting in cosy offices, “just following orders”..

The Dangers of Ideology & Likeminded People

Wed, 13 Oct 2010 19:46:00 +0100

Do you hang out with, listen to, read the work of and/or take advice from mostly likeminded people? I’m sorry to say, but you are breeding a dangerous monoculture around yourself, and you’re taking on a big risk of exposing yourself to dangers that will take you completely by surprise.
Just as monocultures in agriculture and genetics lead to increased risk of famine and lower natural resistance to new diseases, so do social monocultures increase the risk of becoming wedded to defunct ideas or blind to radical change until it’s too late.

Monocultures & Likeminded People Sowed the Seeds of Financial Disaster
I have lived in London for a long time, and with finance in general and investment banking and hedge funds in particular making up an outsized part of the economy, it is easy to make some key observations:
Investment banks are a testosteron driven environment, where “doing the deal” is more important than doing the RIGHT deal, and perhaps most dangerously where numerate degrees and backgrounds dominate the landscape entirely. Investment banks are are filled with people who are not only likeminded, but are also snobby about being likeminded and only consider recruiting those who are likeminded, or can be moulded to become similar enough.

What is the result of a culture where everyone thinks alike, where moving from deal to deal is more important than doing the right deals? Where it is an article of faith that complicated Excel-spreadsheets can model absolute truth, even if fundamental base assumptions are made-up/wrong, causing great distortion in every succeeding number? Where human behaviour and psychology is completely disregarded, seen as heresy and sacrificed at the altar of calculus and quantitative analysis?
The consequences can be nothing but disastrous, as we have recently seen and surely will again.

Business & Ideology Make For Terrible Bedfellows
I make no secret of the fact that I lean towards voluntaryism, non-aggression and liberty when it comes to politics. Inevitably this will colour my view of the world despite my best attempts to detach ideology from my perception of it, I am only human after all.
However, I do my best to detach my ideological views from perception as much as I can where I am aware of my bias: to me, ideology is a philosophical standpoint and a moral compass in personal matters. It is not a religious belief in ideology being able to prescribe a solution for every ill or holding the ultimate truth.
Mixing your ideological views with your perception of reality and truth is a dangerous thing, it has cost much grief and human suffering throughout history and on a much smaller scale, there are many risks with mixing ideology and business, such as:

Ideology driving you to make bad choices and investment decisions.
Money made on ideological standpoints cementing ideas and creating a rigid mindset, even after ideas having been disproven.

Ideology Drives Poor Decisions
Effectively, The two points mentioned above are two sides of the same coin seen from slightly different perspectives.
Let us use the gold market as an example of the first point, ideology driving bad investment decisions. Making a gross generalisation, opinions on gold are divided into two camps. The first camp consists largely of proponents of free markets who tend to be in favour of a monetary gold standard and who more often than not are perma-bulls on gold (also called “gold bugs”). The second camp tends to be Keynesians, and economic statists, who see gold as little more than a “barbarous relic” best passed to scrap heap of history.
Given the highly ideological nature of the divide, it is exceedingly difficult to find any sort of balanced investment analysis on the case for- or against gold, as most of the arguments are based on political ideology rather than matters of fact!
It should be noted that in the last decade, the gold bulls have been right, but then again they where wrong for the better part of twenty years while the perma-bears where right throughout most of the 80’ies and 90’ies.
At this point it is worth pointing out the old adage that even a broken watch is correct at least twice a day. Ideology is simply a very poor predictor of the future or judge of causality.

A Vested Interest Creates an Inflexible Mind
As for the second point, money gained from ideology tends to create or cement a rigid and inflexible mind - to take a less political subject, consider all the quality and efficiency standards/ideologies that have passed through the services sector of the economy in the last few decades. We have seen various ISO standards, Six Sigma, CMMI, RUP to mention just a few, all of these have fallen to the wayside, as have the business built around them, as the underpinning ideas have been disproven, debunked or proven to not be particularly applicable outside of their initial area of use.
Building a business based on an ideology is doomed to fail sooner or later because it puts the blinkers on the people inside the business. It makes them resistant to new ideas and streams of thought - they put their future behind a given ideology, and often they will stick with it until the very end, because of their financial and emotional investment in it. They only see what they want to see, what confirms their world view, because it has been solidified and cemented due to their personal investment and interest in it.

Whenever I start to hear public opinion or just the people around me holding opinions and views that sound too much alike, too much like regurgitations of the same set of ideas, I sit up, take notice and try to put my critical and contrarian hat on. It pays to be a contrarian and question the views of the people around you, even those who think just like you.
When a large herd all run in the same direction at speed, you should get suspicious and consider if there might be a slaughter house somewhere up the road.

In Defense of Geoarbitrage, Part II

Mon, 11 Oct 2010 23:47:00 +0100

My previous defense of geoarbitrage woke some heated debate, mostly offline and in various e-mail threads, one which apparently fantasized about beating my “stupid face into an indistinguishable mass of red pulp”. It would seem after six years of blogging in various incarnations I’ve amassed an impressive amount of people wanting to do me bodily harm for my views. I’ll take the fact that I’m able to stir strong emotions with my words as a compliment.

However it seems that the remaining criticism I have received broadly falls into three different main categories which I will address in this post:

Ascribing me views and opinions I do not hold.
Assuming the lack of instant, visible, nationwide gratification for the poor nations is the same as lack of progress.
Crass self-interest disguised as concern for the poor.

What I Do Not Defend or Believe
First of all, the original post was mostly written in the context of white-collar geoarbitrage. I very much doubt that a Philippine virtual assistant is dangled over a meat grinder and lowered into it if he/she does not answer Skype calls swiftly enough.

I do not in any way condone or defend insecure or dangerous work environments where costs are cut by purposely endangering factory workers. I believe it is a basic requirement that people should not be subjected to any undue risk or danger because someone wants to save a few bucks by not using proper safeguards or modern, safe equipment. That is simply unethical regardless where ever it happens.

That Which is Seen, and That Which is Not Seen
Frederic Bastiat was quick to point out that any economic policy or action should not only be judged by its visible and immediate effect, but by ALL of its effects, immediate, delayed, indirect and those that will never occur as a result of the action or policy. This is worth repeating when people get frustrated over the slow progress in poor countries in spite of foreign investments.

Lack of immediate progress is not the same thing as absence of progress. Instant gratification is a very rare phenomena and should not be expected, especially in an environment where the starting point is anything but great.

Change does not happen overnight. 50 years ago Singapore was as poor as Mozambique while Sweden was one of the three richest nations in the world. Today, Mozambique is still piss poor, while Sweden is still relatively affluent (yet has fallen back a bit) and often held up as a shining example of the “third way” between capitalism and socialism. Singapore? Well, they are now one of the worlds richest nations with a infant mortality rate that is lower than Sweden’s. That’s what I’d call progress, and rather quick at that. Yet it took Singapore the better part of 50 years to catch up with and pass Sweden. Some of the poorest countries can do the same, but it will take time, and it will only happen with effective governance, low corruption, the rule of law and a good business environment. Fail at any of the above and progress will be sluggish at best, but it won’t be the fault of foreign investors.

Self-interest Disguised as Concern For the Poor
This I suspect is the single biggest objection people have. Having been in IT, and started working in the wake of the dotcom bust as offshoring became a hot potato, I think I have an informed perspective on this. In fact I used to belong to the “it doesn’t work, it’s wrong, it’s exploitative”-crowd.

A lot of Westerners fear that their high wages will be undercut by cheap labour in emerging nations and protect their privilege with tooth and nail. Obviously speaking solely to protect your own undeserved privilege from the competition of the hard working poor would be considered bad form, but fear not, a solution exists!
Let’s just change the rhetoric ever so slightly so that we become the vocal defenders of those poor people from exploitation by The Man (even though they never asked you to speak for them)! Some people in this category probably don’t even realise their post-rationalisation to the point where they probably believe the crap that they are smoking.

But let’s not fool ourselves - in the case that a western job is undercut by a worker in an emerging nation, the new worker is not the actual loser, he is the winner. You, the westerner are the loser. Railing against the way of the world at that point is not out of some deep seated sense of justice and defense of those poorer than you, it is pure self interest, so at least have the decency to admit it to yourself. Anything else is just tasteless hypocrisy.

As I said in my previous post, no one has a God given right to work at an excessive wage. Just because you made $100000 last year does not mean it is your right to make the same amount in perpetuity. For better and worse, the world is a competitive and constantly evolving place, if you want to stay ahead, you need to adapt and invest in yourself so you have the skillset and mindset to continue to provide value for employers and customers in the future. Sitting back and expecting the good times to keep on rolling is the surest way there is to be knocked of your selfmade piedestal and be left behind.

The Ethics of Geoarbitrage & Fallacy of "Exploiting the Poor"

Fri, 08 Oct 2010 11:30:00 +0100

I got stuck in a little discussion in the comment thread on Beyond Growths hilarious and humorous post “17 Steps to Instant Success as a Lifestyle Designer”.
The particular discussion I got involved in centered around the ethics of geoarbitrage and whether or not rich people from the first world exploit poor people in the third world when they hire them to do work such as being Virtual Assistants, programmers, factory workers, etc.
My answer to the question is an emphatic NO. Let me explain why.

“Neo-Colonialism” Is Just An Excuse For Years of Political Mismanagement
The term “neo-colonialism” is often bandied about when it comes to the magic of “structural exploitation” of the poor third world by the rich western world, though it is rarely defined nor elaborated on. I think it basically boils down to “white mans guilt”: just because our ancestors did unspeakable oppressive things a long time ago, they somehow still affect the structure of society.
This is greatly underestimating the human ability to change, adapt and improve, and merely making excuses for decades of political mismanagement in many third world countries.
Lets use an example: In 1955-60, countries like Singapore, Hong Kong and South Korea where approximately on the same level of poverty as most African backwaters, like Mozambique, Kenya and others. Today, Hong Kong, South Korea and Singapore enjoy western living standards, and at least Singapore has already surpassed most western nations in terms of wealth. What’s the difference? Not natural resources, both Hong Kong and Singapore where little more than small fishing harbours 50 years ago. I’d say minimal corruption (relatively speaking), openness to trade and a good business environment has done all the difference for these countries, all the while cleptocratic dictators have taken turns looting the public coffers and keeping the people down in many poverty stricken African nations.

Holding Poverty Against the Poor
But surely paying a poor Vietnamese $4/hour for the same work an American does for $40/hour is exploitation, right? Wrong. There are three sides to this:
Firstly, will the Vietnamese be better of worse off if he gets $40 at the end of the day? Would he be materially better off if he got nothing and an American got $400 instead? Of course not. Refusing to do trade with someone because they are “too poor” is simply a way of perpetuating the poverty and victimizing the poor for being just that.
Secondly, does it materially effect the welfare of the Vietnamese man whether he gets the $40 from his neighbour or a Westerner or Western corporation that supposedly “exploits” him? Of course not, $40 is $40, he’ll be better off with it than without it. In fact, if the money is coming from foreign sources, it is arguably more positive for his society as whole, as it means that they are attracting capital from outside sources, thus positively impacting the trade balance.
Thirdly, the American making $400/day for the same work the Vietnamese does for $40/day has no God given right to make an excessive wage in comparison - but rest assured, time will correct this: American living standards will go down as the debt fueled free ride comes to an end, while Vietnamese will go up and meet somewhere in the middle, though how and why is a different discussion altogether.

Free Choice, Necessity & Coercion
Free markets are based on the free choice of individuals: two parties doing business would not make an exchange unless both saw it as mutually beneficial, it’s really that simple (of course assymetries of information may create opportunities for unethical and fraudulent behavior, but lets put that aside for now).
Let’s revisit our Vietnamese friend: if he is so poor, then surely he has no choice in the matter, having to take the job to feed his family? Well, uhm, yes, sort of. But is this really so different from why millions of Americans go to work every day? They do it to feed their families, pay for mortgages and college and generally improve the life of their families. They have different starting points, that is all, but the underlying motivators are the same. Unless you believe in the proverbial Free Lunch(tm), necessity will always play a role, unless you are one of the lucky few who where born to rich parents, won the lottery or struck gold with a business venture.
Necessity and coercion are not one and the same: coercion is being forced to do something under duress against your will with no personal benefit, real or perceived, like having a gun pointed to your head being forced to do something which you gain nothing from. Necessity might make you take an underpaid job, but you still gain from it (money to get food), and you still have the choice of taking the risk of turning it down, being hungry for a while in hope of finding a better offer.
Many mix up consequence free living with free choice, however consequence free living is something very few will ever enjoy (if it is at all possible), though most of us will be free to chose in life in the absence of actual coercion. However those choices will almost always come with consequences, sometimes adverse ones.

Pricing Risk: Extracting The Value of Your Labour Through Work or Entrepreneurship
Lets look at the last of the arguments I often come across in debating this issue: If the Vietnamese man works for $40/day, but the western corporation manages to extract $500 worth of value from that work, surely he is being exploited?
Well, no again. Selling your labour by the hour or wanting to extract the full value of it is as much a choice as any. If you chose employment, you chose the perceived “safe” route: you don’t have the chance of getting the full upside to your work, but at the same time, your risk is limited - if you work for six months for a company, you’ll get six months worth of wages.
Let’s look at offshoring programming: an entrepreneur hires someone in India to build him a webapp he thinks will be a massive hit. Say it costs him $2000 to have it built in two months. If the web app is indeed a big hit, the programmer will only get $2000, whereas the entrepreneur will net the difference as profit on any amount exceeding that. However, if the webapp bombs and fails miserably, the entrepreneur is out of pocket by $2000, while the programmer still gets his $2000.
The point of this is, if you want to extract the full value of your labour, the flipside of that is that you will also have to carry the full risk of failure. You can’t have your cake and eat it too. The choice of employment is the choice of limiting BOTH your potential upside AND downside for a reward that is known up front to be within a narrow band agreed. In market parlour, it’s an exercise in pricing risk.

I do not dispute that poverty exists, or that people are born with different levels of natural opportunities depending on where in the world they are born and to which parents, but that’s just life unfortunately. Nor do I dispute that there are shady and unethical business practices used around the world.
But the ethics of international trade and geoarbitrage are a separate subject from the subject of general business practice ethics. Unethical business practices such as lying, misleading and defrauding are unethical regardless of whether your employees are American or Vietnamese. However, assuming the absence of coercion and fraud, the free exchange of products, services and labor for mutual benefit agreed through free choice can be nothing but an unequivocally positive thing that improves the well being and prosperity of all those involved. To paraphrase Frederic Bastiat: where goods do not cross borders, soldiers will.

"Who Took My Money?" - Why Cash Really Is Not That Safe

Wed, 06 Oct 2010 11:22:00 +0100

I have had a discussion over the past several days with a friend who rightly worries about the inflationary risks of current fiscal stimulus, budget deficits and money printing (renamed to the less alarming “Quantitative Easing”), and the effects it might have in devaluing his rather sizeable savings.
Yet despite his worries, he is hesitant about diversifying his savings into investments in other asset classes, and is hesitant to even put part of his money into another currency despite holding most of his savings in a currency which has been constantly and purposely debased by the central bank over the last decade. The rationale seems to be “at least I can’t lose more than whatever inflation runs at”.

But HOW much is inflation going to be?
Over the last 20 years or so, we have been spoilt with historically low increases in consumer prices in comparison to other periods in history where fiat money has been used. However, as any investment- or fund manager will tell you to avoid jailtime: “past performance is no indicator of future performance”. Just because we have been fortunate to live with 2-3% yearly consumer price increases in the past couple of decades, doesn’t mean we couldn’t go back to the 10-20% that was commonplace in the seventies and early eighties. It also doesn’t meant that things couldn’t get even worse than that.
To make a parallell: if you would have put money in the US or any other western stock market in 1980 and just held it until 2000, you would have made a bundle of money. But if you invested in 2000 and held until now, you would have lost money in real terms.

Consumer Prices vs. Inflation
Another point of note is that Consumer price changes are not actually a real measure of inflation - inflation is per definition the increase in the money supply (amount of money circulating in the system). Even if consumer prices have only risen by 2-3% in the last few decades, it doesn’t mean there hasn’t been inflation, it just means that the newly printed money has gone elsewhere.
There was a massive stock- and tech bubble in the late 1990’ies which came crashing down eventually. After that we had a massive real estate bubble, and we all know how that ended. Both of these where symptoms of inflation of the money supply and the malinvestments that follow when too much money chases too few investment opportunities/resources.
Inflation is a little like putting a garden hose down into the ground and turning it on: you don’t know where the water is going to bubble up, but you can be sure it will bubble up somewhere eventually. The same thing goes for inflation: prices will rise somewhere, you just never know where. In the last 20 years or so, we have been fortunate enough that the price rises have mostly not been in consumer prices such as food, but consumer prices have in no way reflected real inflation, as the picture below of the US Monetary Base growth illustrates in no uncertain terms (do note what has happened since the early eighties when our current debt super cycle started):

Consumer Prices vs. Purchasing Power
Yet another point is that rises in local consumer prices don’t actually reflect the loss of the purchasing power of your money. Imagine that you held all of your savings in British Pounds in 2007. Three years later, those same pounds would have lost approximately 25% in value compared to other major currencies, such as the US Dollar, Euro and Swiss Franc, and even more to some others. The same 2007 monetary value would have bought you 33% more “stuff”, if you had held your savings and made your money in Swiss Francs instead of British Pounds since.
In other words, compared to people who held savings in some other currencies, you would have lost 25% of your purchasing power if you held British Pounds. If you lost 25% of your net worth in the stock market, I’m pretty sure you would feel a bit deflated, yet when the same thing happens to your savings, people seem ok with it, as long as it is the same or higher nominal number that shows up on their bank statement. If this isn’t cheating yourself and allowing politicians and central bankers get away with daylight robbery, I don’t know what is.

All Value Is Relative
The point I’m trying to get across here is that there is no such thing as “absolute value”, there are only overvalued and undervalued assets.
Many of us have been fooled into thinking that our wealth and purchasing power is the same as our net worth in nominal currency terms, less the consumer price change per year. This clearly isn’t true: what if you wanted to buy a house for your family after house prices and rents have risen 50% in 3 years? What if you wanted to move to another country and all of a sudden found that your new home was much more expensive than what it was the last time you visited because your purchasing power had decreased due to exchange rate changes?

So What Should I Do To Protect My Net Worth?
Well, I am not going to give investment advise here, I just want you to realise that your money isn’t particularly safe, and isn’t an asset class that is safer to hold as by some weird magic. Sure, it is a good idea to hold enough cash to fill your daily expenses without duress and make sure you can survive a potentially lean earning period so you don’t have to hold a firesale of assets currently undervalued by the market.
But the only long term safety you have in protecting your net worth is to learn how to identify if and when different types of assets are overvalued or undervalued. To blindly hold cash in your savings account is a great way to put yourself at risk of allowing the tides of time and the governments “inflation tax” to slowly, or maybe even quickly impoverish you without you even realising what hit you.

Lifelong Learning, Kicking Ass & The Timeless Teachings of Bruce Lee

Mon, 04 Oct 2010 23:51:30 +0100

Bruce Lee may be most known as an actor and a martial artist. However, he was much more than that: he was a philosopher and a great thinker, bringing together Taoist- and other eastern philosophies with western streams of thought, creating a fusion of ideas that where not constrained by the limitations of their origins.

Lee’s teachings can easily be applied to any part of life: your inner life, your personal relationships or your professional life, but let’s examine how they may apply to the areas of life long learning and improving oneself.

“The Usefulness of a Cup Is Its Emptiness”
This was a metaphor used by Bruce Lee to represent the concept of being prepared to accept new knowledge without being hindered or biased by old knowledge, preconceived notions or biases.

Many claim to have an open mind, but in reality the number of people with truly open and flexible minds are few and far between. Most of us are afflicted by various cognitive biases such as most commonly confirmation bias, meaning we tend to have our mind made up about what the “truth” is, and find the evidence to support it while conveniently disregarding or devaluing contrary evidence. This is particularly true for subjects which are heavily influenced by personal values and political ideologies, economy and politics come immediately to mind.
As much as morality and beliefs, both explicit and implicit can be valuable in many circumstances, they can cloud our ability to absorb when it comes to understanding and finding real truth. If we can strip ourselves of the constraining spectacles of morality, beliefs and prior knowledge just for a moment as we take in new information and knowledge, we can better judge the usefulness of our new knowledge without the filtering effect of pre-judgement.

“Absorb What Is Useful; Disregard That Which Is Useless”
Do not burden yourself with what you have no use for, and do not waste effort on methods, information or actions which you have found not to contribute to a useful end. Cut waste, and get to the core, the essence of what it is you are pursuing. In this regard I see many parallells between the Taoist roots of the concept, and that of Systems Thinking around organizational effectiveness and efficiency. To me personally, it was a liberating discovery to find a core principle that is applicable not only to learning, improving and my personal life, but also to the work that is my business.

Simplicity and cutting to the bare essence are simply timeless values applicable to almost any area of human existence.

“The Less Effort, The Faster And More Powerful You Will Be”
If you truly want to learn something to mastery, it should become part of you, instinctive and effortless. The more something is an instinctually learned part, whereby you don’t even have to think to do it, just be part of the moment, the more powerful it becomes. Bruce Lee’s martial art, Jeet Kune Do embeds this in the concept of “economy of motion”: efficiency, directness and simplicity, expending as little energy and movement as possible to achieve your end. These concepts can easily be transferred into almost any area, such as learning, mastering and executing any skill or achieving any goal. Let’s call it “economy of effort” instead of “economy of motion” in this context.

Have an open, flexible mind that is not clouded by prior pre-conceived notions, learn to cut to the essence of anything and absorb it, discard the useless and achieve mastery by pursuing the most efficient, direct and simple solutions - If you can internalise and integrate these skills and values into yourself, you’ll be halfway to truly kicking ass in any pursuit you apply yourself to.

Rational Detachment - Enlightenment the Vulcan Way

Wed, 29 Sep 2010 01:59:00 +0100

I strive towards having as much rational detachment from- and control over my emotions as possible. This does not mean I strive towards feeling nothing at all, I still embrace the positive aspects that come with the human condition, it is impossible not to and it would be a shame to miss out on the positive experiences. Furthermore, we need the contrast of experiencing the negative to fully appreciate the positive. However, what rational detachment does mean is that I strive to understand WHY I feel a certain way, while at the same time not letting my emotions or state possess me.

Being More Than a Hairless, Domesticated Ape
Being able to look at- and control your emotional state with a certain level of rational detachment is a healthy thing, it allows us to rise above being instinctual animals, it allows our cognitive faculties to be firmly in the drivers seat of our own lives, rather than our animalistic instincts.
Being able to exercise control over your emotional state and understanding why you are in a certain state means that you can safely embrace those feelings that are good for you, while at the same time being able to discard and divert those that are detrimental to you.

A lack of control and understanding of emotions can lead people down many detrimental paths: crimes of passion, unhealthy obsessions, irrational fears, depressions and many other self perpetuating bad habits. Being able to lead and direct your inner dialogue and state is a powerful tool not only in understanding yourself, but in avoiding many self destructive and self defeating behaviors in our lives.

Transcending the Human Condition
As human beings, we are endowed with intelligence, rationality and sentience, these are the things that makes us stand out, that enabled us to become masters over this little planet of ours. To me, emphasizing and improving these gifts over our more basic instincts is what being a better human is all about. It does not mean that we should not embrace the fact that we are emotional, feeling animals. But it does mean that we allow the sentient, rational part of ourselves make the important decision in our lives and be what guides our decision making.
It means not being slaves to the biochemical reactions and impulses in our brains, but rather mastering our own biochemistry.

Embracing rationality, gaining understanding and insight through detachment from self or “id”, rising above the animal inside us is a way of becoming more human. It is a path to enlightenment that is a truly spiritual journey. A path that can allow us to transcend humanity through profound insight and knowledge into ourselves and the world we live in, giving us tools that will quite literally allow us to define our reality, and through action create almost any outcome we desire.

The 3 Mental Shifts Undermining Western Prosperity

Thu, 23 Sep 2010 23:17:32 +0100

For most, it is plain to see that a massive shift of power is happening in the world economy: the old Western empires are crumbling under the weight of regulation, excessive taxation and crippling debt. But I think the Western decline is not only related to policy mistakes and financial bubbles, it is a more deep-seated issue than that, it goes all the way to shifts that have happened in the mentality and psyche of people living in western Europe and the US - I believe there are three fundamental mental shifts that have occurred over the last 30-40 years.

From Building Wealth by Saving & Investing to Feeling Wealthy by Spending
This shift is something that is plain to see not only in the racking up of massive consumer debt with no productive purpose or rampant consumerism, but in the very commentary of contemporary economists.
Even the academics and financial forecasters of the west have been fooled into believing wealth is created by mindless consumption by invoking fairy tales such as “aggregate demand”, rather than understanding that the consumption can only occur because something has first been produced!
As long as this mindset prevails, the west is not only doomed to stagnate, but to actually be in perpetual decline.

From Self-Reliance to Entitlement
The Welfare State can only function so long as its citizens have the morality to only use its safety net in their hour of need, rather than as a means of financing their idleness and hedonism. In most of Europe, we probably passed the point of no return a good 20 years ago.
Generations of children grow up in families where the parents have never worked, nor even shown any interest in working. Without a massive effort of will to break free, the children are doomed to follow in their parents footsteps. With no interest in work or education, entire generations become the permanent clients of the Welfare State, not only accepting perpetual dependence, but also expecting it, seeing as an entitlement they have a right to.
Those who are slightly more interested in their own welfare try to get jobs, but even in these cases, if you take away the jobs permanently, most would fall into the same dependence rather than take the step to build their own future by starting businesses and making sure they become self-reliant. Food, clean water and shelter are our most basic needs, yet 90% of the western population would probably starve to death if they didn’t have it handed to them, and most major European and American cities would probably descend into looting and civil war if water and electricity went out for 3 days.

From Improving Your Own Lot In Life to Coveting Thy Neighbours Lot
Jealousy is probably a universal feeling that has been around for as long as man has been able to strap on a loin-cloth, but with the combination of consumerism and an entitlement mentality it has gone into overdrive, at least in Europe. People seem to have lost track of the fact that wealth is not a zero sum game: unless you are a robber or criminal, someones gain is not another persons loss, but also the other persons gain. Capitalism and wealth creation drives living standards upwards by mutually beneficial exchanges.
What your neighbour has doesn’t matter to your standard of living, so why are we so focused on what others have? If you burnt all your money, how exactly would that benefit someone else?

If the west is to break free from its decline, and try to avoid entering a free fall, it must rediscover som fundamental truths that it lost somewhere along the line. Maybe it was the Welfare State, maybe people got too comfortable, maybe it was a combination of the above. Either way, as long as these mindsets remain in society, the decline will continue.

Clean Out: Week 10 & Retrospective

Mon, 20 Sep 2010 00:32:59 +0100

Tenth and final week of my official “decluttering challenge”. This is what’s going this week. Slightly less than some other weeks, but I think I’ve done well so far.

In addition to what is pictured above, I might be able to sell off a Nintendo Wii, PSP, Apple Time Capsule and four quite large books before next week is up, so that’s money in the bank and less stuff. I’ve gotten rid of a lot of junk to the point where my apartment is looking very neat all the time with a minimum of effort, as I don’t have stuff cluttering up the place all the time.

I’ll try to keep getting rid of stuff: I own a Kindle, so most of my books are going, though I’ll sell and donate them away rather than wholesale throw them away. Same thing goes for a large amounts of DVD’s.

End Result?
So what’s the actual end result of all this? Well, if you discount the obvious things that go with a home (furniture, kitchenware and utensils etc) and the books and DVD’s I have already marked for giving/selling away, I would venture to guess that I may only own somewhere in the region of 100-150 “things”. In effect, if the proverbial shit hit the fan, I could probably fit most of it into a backpack and two other bags. Not exactly “minimalist” if you buy into the gospel, but that was never my goal in the first place: the goal was decluttering to the point where I was down to the things that mattered.

A lot of my “stuff stress” is now gone, and I feel much freer, being able to move should I want to without having to worry too much about removal and storage.

It's a Hard Knock Life. So Get Over It.

Wed, 15 Sep 2010 18:40:00 +0100

I’ve had a lengthy discussion over the last few days in various threads with Carlos Miceli of OwlSparks, my sister and various other people about feminism, inequalities, privilege and the difference in opportunities different people have given different circumstances.

You Don’t Want What I Want & That’s OK
I wrote about this some months ago at some length. But the gist of it is that different people want different things. All too often people frown upon or judge others if their values and goals in life differ from their own, even though there are infinite possibilities and infinite choices to make in life.
Some might find comfort in the town they grew up, others want to see the world. Some might strive for wealth, others for spending more time cultivating their hobbies. Some might want a big family, others may find peace in solitude. There is no “right” or “wrong”, just your choices, wants and goals. Hopefully you’ll find a balance that aligns them as closely as possible to make you happy.

Privilege, Disadvantage, Excuses & Redefining Your Reality
There is absolutely no doubt that poverty and racism exists, and there is very little doubt that women are severely held back in some backwards cultures. People are born with diseases, disabilities and different educational opportunities, depending on the genetic and geographic lottery of birth.
But I am an optimist. I refuse to believe that anyone who grows up to an adult age is condemned to a bad life because of their circumstances - people can still make the most of whatever they have, and quite often you need little more than your wits and willpower to perform what to some would seem like miracles.

Are you a woman being held back in your career because of the “old boys club” running the place? Why the hell would you want to work for them anyway? Why not go somewhere where you are more appreciated (or better yet: start your own business). If you’re any good, it will only ever be their loss.
Are you an ethnic or religious minority subjected to prejudice or held back because of the colour of your skin or religious beliefs? Why stay where you are being abused or disadvantaged? Go somewhere else where circumstances are better. If immigrants in the 19th century braved the unforgiving American wilderness with little else than the clothes on their backs to escape religious persecution in Europe, I’m sure you can move your ass too.
The point is that you can chose either to use your disadvantages as an excuse for continued unhappiness, or you can redefine your frame of mind and do the most with whatever you have. I would even argue that early disadvantage can act as fuel for the fire driving you on, because you have a point to prove and a very clear obstacle to overcome.

It’s Not About How Hard You Hit, It’s About How Hard You Can Get Hit And Keep Moving Forward
I am an avid reader of Sovereign Man, one of my absolute favourite blogs around. In the last week or so, the comments have exploded with peoples stories on how they are acting to increase their self reliance and prepare for future economic turbulence.
Some of the most heartening comments have been from people you would not expect to be there: in-debted widows, pensioners and many others who have been knocked around in life and not given a lot of breaks.
One of my favourite comments was by an elderly disabled man living on meagre disability income, yet he was still determined to take steps to increase his own self-reliance and quality of life. His comments where not words of self-pity or excuses, they where words of determination to improve his lot for whatever time he has left. If someone like him can take steps to transcend unfortunate circumstances and make a better life, I don’t think anyone else has a lot of valid excuses.

Not all of us can be billionaires (or even want to), football/soccer pros (too late for me now), famous actors, business moguls or whatever other high-flying dreams you may have harboured. But that doesn’t mean you should settle into the grey mediocrity of a life you never wanted, or self-pitying unhappiness. Do the best you can with what you’ve got to make your life the way you want it to be or at least as close as possible.
In the words of the famous Rocky Balboa: “Life ain’t about how hard you hit, it’s about how hard you can get hit, and keep moving forward.”

Refuse to just be just a gender, race, religion or number. Each and everyone has the innate ability to be so much more.

The Era of Post Political Freedom

Mon, 13 Sep 2010 18:59:00 +0100

In the future, every man will be an island. The promise of panarchy - people being able to freely chose the political system under which they live is a reality today, if you only reach for it.
In years past, the concept of panarchy seemed a pipe dream concocted by wild-eyed anarchists and libertarians. To most who still think inside the box, it will still seem that way. But if you redefine your frame of mind and think outside the narrow confines of Nation States and physical chains, you will quickly realise that you can live in almost any system you wish: highly taxed egalitarian socialism, untaxed, unregulated free-market capitalism, repressive authoritarianism or free to say what you want, the choice is entirely yours.

Free to Chose Your System: Rise of the Post Political Man
If you are smart, independent minded and shrewd enough to establish an income that is location independence, you are almost entirely free to chose the systems under which you want to live.
Most people are stuck in the rigid mindset that they need to have a home that is physically anchored in a particular country and place. From a legal perspective that may be so, but there is nothing stopping most people from having a few “homes”.
For instance, someone who is liberty minded could establish legal residence in a country with low taxation and/or territorial taxation where income sourced elsewhere is not taxed (Singapore, Hong Kong, Panama, Malta, Costa Rica and most of the Caribbean are a few that come to mind).
To avoid legal troubles, full legal residence would have to be established in a way which satisfies both your current/previous home country, and your new home country. However, establishing legal residence does not mean you have to be present all year round, in all likelihood, you could simply be present a small amount of time each year, and then spend the rest of your time in other places that you like, so long as you stay for a period of time that is less than what would make you considered resident for tax purposes.

In other words, you could have “economic” residence in one place, but spend the bulk of your time in a few other places around the world which fit your social wants and needs better. This would effectively mean that you would pit the competing systems of Nation States against each other in a way that would be perfectly legal.
For ages, politicians have been pitting people against each other for their own purposes, creating conflict where none were necessary: workers against business owners, ethnic majorities against ethnic minorities, the list goes on. It’s about time they got a peaceful dose of their own medicine by having to compete in the marketplace for ideas against other Nation States for the productive capacity of able individuals.
In a globalized world, where people, knowledge, information and assets are increasingly mobile, you’re in the drivers seat for once, the possibilities are endless. You no longer have to vote at the ballot box every 4-5 years in a single country, when you can give your vote on your own terms every day of the week by chosing which countries get to benefit from your spending and your productive capacity.

Freedom is Yours For The Taking
Some might ask “isn’t this a young mans game?”. Sure, it might be easier for someone with few worldy attachments to a specific location, but I know for a fact that there are many families that live a mobile lifestyle and love it. I believe that the biggest inhibitors to living free is fear of the unknown and emotional attachments to local friends and family. But with modern day technology and transport, it can often be a false objection: with the rise of Skype and low-cost airlines, those close to you are never far away. The price of entry to freedom is simply economic self-sustainability combined with mobility.

Our modern day is a paradox: as the noose of authoritarianism grips more firmly around the necks of regular people in large parts of the world, the opportunities for real freedom, for true individual sovereignty from our former masters are greater than at any previous point in history.
With a flexible mind, some business acumen and able execution, freedom is within grasp for anyone wanting to grab it: after millenia of struggle, the emancipation from our political overlords is now a real possibility - you are free to define and live your life the way you want without having to ask permission from anyone.

Clean Out: Week 9

Sun, 12 Sep 2010 23:10:05 +0100

As part of my ongoing decluttering challenge, the following things went this week:

Yet another old (laptop) backpack that was frayed and broken.
My Slingbox, which I gave away to a friend. It’s been acting up lately, not connecting to the network etc, so it got to go.
A Google branded foldable chair (blue bag/package)
2 keyboards (I use a 17” Macbook Pro laptop with a perfectly good keyboard)

Next week will be the last week of the official decluttering, though I suspect I am likely to keep going for some time even after that date. The ten weeks where mostly as a “Proof of Concept” that it could be done, and it has been done with relative ease.

Finding a Voice: "Life, Liberty and the Pursuit of Opportunity & Excellence"

Thu, 09 Sep 2010 19:16:00 +0100

Since I started this blog in October/November last year, I’ve struggled somewhat to find a voice, a core theme - I’ve written mostly about things that have interested me, but they have been all over the place at times.

It’s been a slow process, but I think in a sense I have come full circle and worked out what I want this to be going forward:
This blog will not be about any one or a few particular subject alone, but will instead be focused around the core theme of the intersection between financial/entrepreneurial opportunity, personal freedom and becoming the best person you can be.

In a sense, the pursuit of financial opportunity, personal freedom and becoming the best man I can possibly be embody my core motivators and passions, so focusing my writing on the areas of intersection between these three is a natural evolution and in a sense coming full circle with a more clear purpose.

Financial & Entrepreneurial Opportunity
At heart, I’m an opportunity and ideas guy. My late grandmother never tired of pointing out that when I was four years old, while all the other kids wanted to be policemen and astronauts, I wanted to be an inventor and businessman. By age six I was designing my own imaginary space rockets, and by age nine I was an accomplished door-to-door salesman, running around the little town I was living in selling magazines and other trinkets, making a pretty penny for someone who was only a little boy.
As an adult, the same things still energize me: opportunities and ideas are what makes my heart pump faster and what turns my head.

Personal Freedom: the Emergence of the Post Political Man
My first ever blog was a swedish blog about politics, which at its height probably was among the top 20 or so political blogs in Sweden. It was often an outlet for me, allowing me to rant and vent my anger at the political system as it stands.
My political values are largely the same (though evolved); I am principled believer in freedom stemming out of the principle of non-aggression.
This means freedom in its truest sense: social freedom to live life the way you want as long as you do not hurt anyone regardless of what your chosen lifestyle and habits are, political freedom to express whatever opinions you have, however abhorable I may find them, as long as you do not incite violence against others, and economic freedom sell your labour, knowledge and creations in whichever way you chose without undue restrictions or taxation.
You may disagree with me, and that’s ok, but I won’t apologise for my convictions, nor my drive to live as freely as I possibly can.
In terms of this blog, my political values won’t manifest themselves in terms of ranty rages against the machine/system, I long since gave up on changing the political system, besides, local political systems are becoming less and less relevant:
In an increasingly globalised world, Nation States are becoming more or less irrelevant and people are becoming more free to chose the circumstances under which they want to live - I would call the concept “The era of post political freedom”, or being a “post political man”. There is no need to try to change a system which may take decades to just nudge in another direction, if you can simply hop on a plane and move to a system that is more compatible with your values, or even better, pick and chose by pitting competing systems against each other to your personal benefit.

Being the Best You Can Be: Fulfilling Your Potential
Personally, I don’t strive for happiness alone, though a fair amount of happiness is desirable in ones life. But just singular pursuit of happiness is not enough to fulfill the innate potential we all carry to be extraordinary. Pursuit of happiness alone could in some cases even degenerate some people into instinctual animals concerned with nothing more than alcohol fuelled orgies and excess.
Like most other people, I am a flawed person with more than a few hang-ups and faults. Some I have come to accept, others I try to get rid off. But at the same time, I feel it is my duty as a civilised and rational human being to be the best man I can be. This means finding a balance between happiness, mental discipline, enlightenment and physical excellence, wrapped in an existence of maximum self-awareness.
To me, every person who is not trying to improve themselves, at least fulfilling some of the promise that every person holds is a human tragedy. Being the best we can be is something we all owe ourselves, if no one else.

Some of these values and subjects have probably already shone through in my writing, some of it may not.
This blog won’t be about finance, entrepreneurship, politics, nor self-improvement though those subjects may be touched upon. This blog will be focused around the intersection of opportunity, being the best you you can be and shaping the life you want for yourself outside of the limiting confines of national party politics and social convention. This will be more of a theme, concept and idea than fixed set of subjects - call it the mission statement of this blog if you will.

These are the things I believe in, the things I value, the values that define who I am.

Survivalism, Finances and the Rule of Three

Tue, 07 Sep 2010 19:25:42 +0100

Survivalism has a number of “Rule of Three’s”, for instance one states that a man can only survive for a maximum of 3 hours without shelter under extreme weather condition, a maximum of 3 days without water and a maximum of 3 weeks without food.
Survivalism author Ragnar Benson has turned this rule into tangible survival advise, stating that under survival conditions, you should strive to:

Have three separate sources of water
Have three separate sources of food
Have three separate places of shelter

Bensons idea behind this is to lower your risk and increase your chances of survival, should one or even two sources be contaminated, destroyed or otherwise unavailable. In a survival situation, having contingency sources for your basic needs can become a matter of life and death.

Turbulent Financial Times
We currently live in a time of almost unprecedented economic and social turbulence: the banking crisis may soon enough become the sovereign debt crisis. Economies in developed countries are barely recovering from a deep funk.
Questions have to be raised: can you trust the value of your money? (the dollar has lost 99% of its purchasing power in the last 100 years..)
Are you sure governments won’t impose new confiscatory taxes, or even means test or outright expropriate your pensions to save their own skin? (Spain is already propping up its sovereign debt by forcing pension funds to “invest” in it).
Is what you do for a living now still going to be able to sustain you in five years time?

The short answer is: you can’t be sure of anything. Going on as if everything will always be the way they are in a comfortable status quo is a surefire way to get badly burnt when the next crisis hits (they always eventually come around).
A good way of hedging against being caught out by the next financial storm is to adapt Benson’s Survival Rule of Three to your finances.

Assets: Derisk Your Asset Holdings
Don’t hold everything in one currency or asset class. Don’t tie yourself in to one geography, make sure you could potentially move at least part of your assets around the globe if the proverbial shit hits the fan: banks collapse, governments go bad or collapse, the economy hits a depression etc. Ideally:

Hold assets in at least three different locations across the world.
Hold at least three different, somewhat uncorrelated asset types.

Income: Don’t Rely on a Single Source
Your very worst-case starting point should be at least investing in yourself, making sure you have a skills advantage over others doing the same or similar things, though it is generally a bad idea to rely solely on employment income.
You should really look at establishing multiple sources of income:

Business income: you should aim for having business income that is sourced from at least three different primary clients, preferably more.
Investment income: This goes back to your asset strategy. Ideally, you would have three sources of investment income, for instance dividends, interest and rental income.

Costs: Live Well Within Your Means
This should be common sense, but to millions of people it is not. The smaller the financial footprint you require to live a decent life, the better you will fare in the face of financial setbacks or difficulties. The less junk you have to carry around, the more mobile you can be in your pursuit of new opportunities. For happiness, it is better to collect experiences, not things.
Unlike others, I am not advocating all out “minimalism”, I could certainly not live with less than 50 things (or whatever the perceived limit is these days). Most of us like having some creature comforts around, I certainly do. But at the same time, a lot of the clutter we amass over the years is just an unecessary ballast holding us back - tokens of consumerism that cost us more in money than they gave us in satisfaction.
If you can at least reign in your consumerist tendencies and keep clutter down, you will not only have more money in the bank, but you will also have more freedom and less stress. Building wealth is all about under-consuming to enable investment.

Survivalisms Rule of Three: Applied to Your Finances
As you can see, Benson’s Survival Rule of Three can easily be applied to your financial survival. If you’re lucky, applying these rules will just give you a leg up on building your wealth for the future. If the proverbial s*** hits the fan, these rules might just be the difference between financial oblivion and successfully navigating stormy waters and surviving.

Clean Out: Week 8

Fri, 03 Sep 2010 23:49:09 +0100

This week, I finally got around to throwing out some stuff long overdue that have been in my storage for over two years:

2 IKEA floor-to-roof poles for mounting sliding doors or shelves on. Bought but never used.
2 IKEA shelves.
Blinds that I never installed.
Some old clothes.
Old jogging shoes.
Sub-par quality backpack I bought in Buenos Aires. Replaced with a better one.
Scanner that broke yesterday.
Bag full of various smaller IKEA junk.

To be honest, throwing out stuff is just getting easier and easier the longer I go - I am starting to disconnect emotionally from all the junk I have amassed, and come to terms with the fact that it’s not a waste throwing it out - the waste occurred when I bought it in the first place.

Clean Out: Week 7

Sun, 29 Aug 2010 21:31:06 +0100

This is what bit the dust this week:

Cleaned out the entire set of drawers - from five full drawers to having only some things in two of the drawers. What’s in front of it is what I will shred during the coming days (lots of old bank statements, bills etc from years past, plus check books I have never even used).

Old jeans, old shoes and a bag full of more junk from the drawers.

Old debit-, credit- and various loyalty cards that are expired and/or never used. Thoroughly shredded.

..oh, and if anyone gets the idea of going dumpster diving outside my place, I do have a cross-cutting shredder, so you better be good. :D