Principles

Here's something that I thought was very profound, and surprised Wharton MBA's when they completed the task.  Shouldn't take longer than 10-15 min.  Click the bottom link and scroll to Chapter 1 and do the Six Lives Exercise (maybe 5-10 pages into chapter 1).  Basically you read 6 different lives of people and you rank them in order of your own definition of success.  You'll find out a little bit about your own values if you continue reading a couple pages after the exercise.  The book is called Springboard: Launching your Personal Search for Success by Shell.  The read was alright, I think this exercise is the best part of the book.

 http://books.google.com/books?id=3wcGUDQo3V4C&printsec=frontcover&dq=springboard+shell&hl=en&sa=X&ei=LBRKUuufM4nc4AOl7IH4Aw&ved=0CC0Q6AEwAA#v=onepage&q&f=false

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I realize most people won't do this, so here's the part I thought was most interesting.  A majority of Wharton MBA's pick a stone mason's life.  He likes his job, has a small house in Iceland or something.  He gets to use his creativity and has a few children.  Don't remember details of the children, but I think one of them is successful, one is not.  And basically, if that's their definition of success, why are they leading such different lives?  Why are they on paths to become hedge fund managers, CEO's and consultants?

Flow

Csikszentmihalyi is praised as the founder of a concept called Flow.  We've all experience this before.  It's when you're playing basketball, a video game, working intensely on a project or practicing a technique. The task is challenging, and the task is of your choice.  Time flies by, you're completely focused in the present moment.  That's when you're in flow.  Flow is commonly mentioned as a source of happiness and I think ideally, we should all hope to be engaged in flow in our career of choice.  

From wikipedia:

Flow theory postulates three conditions that have to be met to achieve a flow state:

1. One must be involved in an activity with a clear set of goals and progress. This adds direction and structure to the task.^[12]
2. The task at hand must have clear and immediate feedback. This helps the person negotiate any changing demands and allows him or her to adjust his or her performance to maintain the flow state.^[12]
3. One must have a good balance between the perceived challenges of the task at hand and his or her own perceived skills. One must have confidence that he or she is capable to do the task at hand.

In positive psychology, an occupation can be described as "work", "career" or a "calling."  Work is associated with a means to an end.  Work is a way to pay the bills and keep food on the table.  A career is associated with a means of obtaining wealth and status.  A calling is something you do because it gives meaning to your life.  I think it's worth considering what our occupation is to us, and whether or not we feel we're on a path to finding work that we love.  And whether or not we experience flow in our occupations and our hobbies.   

Priming

If you've taken any basic psychology course, you've probably heard of priming.  Basically, if a group of people see a flashcard with "SO_P" and recently heard the word "wash" and "clean", they would fill the blank with A to make the word SOAP.  If they had recently heard the words like "stew" or "carrots", they would be more likely to make the word SOUP.

But priming affects us much more than that.  Through introspection, I've found myself to be a money-centered person.  This may have to do with my upbringing with parents emphasizing a great education and a great high-paying job, constant awareness of how much things cost, etc.  In addition, my job as a trader can't help either.  I constantly think in terms of profits and losses, expected values, probability/stats.  CNBC is constantly on TV at work and instead of hearing the words like WASH, CLEAN, STEW, or CARROTS, I'm primed with money related ideas.

Everyone is primed in a certain way.  A priest would view an event through a religious lens, and a scientist would view the same event in a completely different way.  And once we're primed, we develop actions and actions become habits.  And once we keep habits for a long time, our actions become part of our character.  A little priming can go along way.  Recently, I've decided to wear these Buddhist mala beads to prime myself towards Buddhist ideas of compassion, nature, calm and inner peace to contrast my everyday surroundings of the new smartphones on commercials, the latest styles on GQ and all the fine dining pictures on Facebook/Instagram.  One little thing could change behavior in the long run.

Effectiveness Management

I don't like the phrase "time management."  It doesn't grasp the essence of what is important.  What is actually important is how effective you are with your time.  Time is a bad frame for effectiveness management since you can spend hours doing something without being effective.  How is it that some people can finish a paper in 2 hrs and I need 7 hrs?  How can some people lose 10 pounds in 4 weeks, and I lost 2 pounds in 4 weeks?  What matters is not time spent or money spent, what matters is effectiveness for the amount of resources you put in.

- Working at a higher paying job for the same hours is more effective than a similar lower paying job.
- Quality time with friends talking about life events is socially more effective than playing video games.
- Working out intensely for 25 min is more effective than screwing around in the gym for 1.5 hrs.
- Learning how to interview then going to 5 interviews is more effective than interviewing 30 times without prep.
- Researching what clothes are fashionable and look good on your body, then going shopping is a much more effective way to spend money on clothes.



Sometimes, Working Smart > Working Hard.  Think about how effective you are, and think of ways to become more effective.

Habits

I believe habits to be one of the biggest influences of our actions.  We're lazy, we fear change, and we're risk averse.  How much more likely are you to enter a restaurant if you've already been there before?  How much more likely are you to exercise if you've already done so in the past week?  How much more likely are you to switch your dentist, even if you've had a bad experience last time?

Try a thought experiment.  Say you're Jane Goodall observing monkeys LOL.  And you observe what they like to eat, how much they play, sleeping patterns, social patterns, mating patterns, what they do day-to-day etc.  You spend the time researching and thinking about these behaviors and write a dozen books on monkeys.  Try to take a step back and think of yourself as the monkey, and ask yourself what a book on yourself would look like.  What are your eating and sleeping patterns?  What are your social skills like?  How is your physical health?  Take a few minutes to actually think about what a book on your behaviors would look like.

Then make a conscious decision of what habits you want to keep and what habits you want to change.

*I said I was going to write more about principles, but I'm going to hold off on it for now.

Principles Part 1: The Problem

I'm very intrigued by the process of decision making.  I actually enjoy reading about behavioral biases, about where people go wrong in making decisions.  I like poker because it involves so much game theory.  To study poker is to study how other people make decisions; I think it's really fascinating stuff and you can count on me posting about this stuff later.  But before you're able to make any real decisions, you need principles.  I've gathered this idea from 7 Habits of Highly Effective People by Covey.

Great so here's a hypothetical situation:

You're 29 and you've planned a week long trip to Greece with your serious girlfriend and her parents, and your senior partner tells you that your big case is being moved up to the same weekend.  You think that if you crush this case, you'll impress senior management because you'll help bring in a huge client, and it'll put you to first in line of becoming a partner within the next few yrs.  You've been with your girlfriend for just under 2 and half years, you've met her parents before, but this trip seems very important to her and everyone involved.  What's the best decision?

Principles are simply the things that are important to you.  At the end of the day, what's going to make you happy?  You see a lot of articles about how to network, how to make money, how to interview, how to talk to girls at the bar, how to this and that.  But these are techniques or tools.  It's like learning the subway system, learning how to drive a car, get gas, etc.  These skills are important, but you first need to know where you're going.  If you want to get to a destination but grab the wrong map, you'll be upset that you've ended up in the wrong place in life.  

"... working jobs we hate so we can buy shit we don't need." - Fight Club

Sometimes, we forget what makes us happy.  Kahneman in Thinking, Fast and Slow talks about how our brain will try to simplify questions like "are you happy?" into a question that is much easier to answer like "what's your current mood?" or "has anything good/bad happened in the recent past?"  Sometimes we relate money to happiness or unfortunate events to sadness.  If the stock market swings down 40% and you lose 30% of your net wealth, you might be devastated.  But all you really lost is money...  

In my next post, I'll write about my thoughts on sets of principles and what different "Maps of Life" might look like.

  

Game Changer: Investing

In my mind, investing is something that can help you and your family never have to work another day in their lives.  For me this is a huge game changer.

Being born with wealth is like starting a game of Monopoly with property, extra money, and if you're dad is the owner of some big company, it's like you've already built big beautiful hotels on your property.  This is completely insane and unfair if you think about it.  But life isn't really fair is it?  We're all in a big game of monopoly, and we're actually all doing pretty well (read my last post "Perspective.")  Being born into a middle class family in the US is like collecting lots of money when we pass go, relative to someone born in a 3rd world country.  My family and I are doing very, very well compared to the rest of the world.  Now I'm saying we can do much better if we bought property, just like in the game Monopoly.  **I'm totally not saying money should be the goal in life, that's absolutely not what I'm saying.  Just making an analogy right here.

To help quantify this "much better", the US S&P 500 has grown at something like 10% a year for the past 100 yrs, and if you consider about 3% inflation, you can grow your purchasing power by investing in the market by 7% a year.  That means every 10 yrs you can double your purchasing power.  In your 70 yr lifetime, you can grow your purchasing power by 2^7 or 128x.  For the same amount of money you use to purchase a car when you're born, invested correctly, you'll be able to buy 128 cars.  Okay so there's taxes, maybe the US growth rate will be lower in the future or whatever, but the point remains.  Investing over a long period of time can put your family out of the middle class.  This is the benefit of owning a profit generating asset.  Owning stock is like owning part of a business and will make you rich over time.

An interesting experiment I heard from my high school AP Psych teacher, if you give a 4 yr old the opportunity to choose from an Oreo cookie now or 2 Oreos tomorrow and he chooses 2 Oreos tomorrow, he'll be more likely to become an intelligent man.  Well we all have a very similar situation in front of us right now.