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New comment by blamazon in "In praise of the humble Sheffield stand"

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In my car-centric city (southeast USA, population ~125k) when I visit private property with no bicycle parking, I try to find the owner and offer to install one of these just for the cost of materials. The idea being, they can put in another one when they see more than one customer on a bicycle at the same time. It's very cheap, less than 100 bucks typically as I have the requisite tools in my garage to make them from scratch out of metal tubing. There's a variety of materials, finishing, and mounting options the property owner can choose from. I've done about a dozen of them, it makes biking around my city much more pleasant and my day is brighter when I see someone else using one.

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749 days ago
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How Your Deepest Fears Might Be Influencing Your Decision Making

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Your success as a principal will hinge in large part on the luck of the draw, feeding you opportunity or scarcity that’s out of your control. Aside from that—or more because of that—it’s pretty important to think about where you do have control.

You need to be smart (enough), disciplined, and willing to wrestle with those tough decisions where the right choice isn’t always as obvious as your critics might think.

You also need to be self-aware, specifically about the deepest fears that drive your decision-making.

I didn’t even know this was a thing until I read Tyler Cohen’s short comment on surfacing the implicit leverage in an organization, and then using that to understand how we make decisions. That was two years ago and I’ve been thinking about it ever since.

Let me cite some specific examples. I’ll bet there’s at least one in here that you’ll identify with:

  • After two years of trying, you finally found someone who can take over the part of your job you’ve come to dislike (it would always have something to do with managing a certain group of employees or clients, or maybe even sales). While this person has the skills, they can be difficult to work with. You overlook it because you hate the idea of losing ground and getting dragged back into doing that stuff.
  • You have a physical reaction when you think about losing any client big enough to deal a body blow to your firm’s steady progress, so you’ve ended up with 30 clients, none of which represent more than 5% of your revenue. This helps you sleep at night but your AMs aren’t driven to find new opportunities and grow accounts as much as to not disappoint clients. That’s the mantra they’ve absorbed from you.
  • You want to be liked and so when something comes up in private conversation with a small group, your first tendency is to agree, even if a small voice inside is saying, “Hey, that’s not a charitable understanding of what’s happening. Are you really sure, or are you making some unfair assumptions”.

Whichever of these scenarios might be true of your firm, those deep fears are not going to change and it’s not worth the effort to push against that immovable wall. Instead, understand yourself and try to find ways to counteract your tendencies.

My own biggest fear isn’t financial ruin of any kind—it’s irrelevance. So I define success as always learning and improving. If I go down still learning, I’ll be able to live with it. If I go down because I quit learning and reaching, it will be (even) harder to live with myself.

So financial performance is secondary to me. If it happens, it happens, but that’s not the goal. I want to be the best; I don’t care about the biggest.

Your biggest fear might be working with a team that doesn’t like each other or where there is a constant underlying tension. So if you are going to choose between a staff mix that pushes each other to be better versus accepts and works well within the status quo, you’ll revert to that latter mean.

Maybe you have a very highly paid COO or Chief of Staff type. But that person isn’t afraid of the tough decisions that put your stomach in knots, and so you put up with their lack of deference in your own relationship with him or her.

These realities aren’t always right or wrong. They just are, and it’s useful to understand your biggest fears and how they impact your decision making. The most successful leaders don’t change who they are, first, but understand who they are and how that’s impacting their behavior. This process of self-awareness is then used to calibrate their decision making.

  1. What are your deepest fears in running the firm?
  2. How do these show up in your decision-making, specifically?
  3. How can you recalibrate your approach to take these into account?

Yes, your firm is going to deliver financial rewards, but it can also shape you as a leader, and help you shape others as leaders. That involves understanding our deepest fears and how that impacts our decision making.

Understand what it means if you are afraid of chaos, irrelevance, tension, financial ruin, embarrassment, or anything else.

It’s easy for us to look on the NBA’s fear of antagonizing China and why that might be. Or why a politician steps back from making a tough call because of some overwhelmingly influential source. But you and I are making the same kind of decisions based on our own fears, and effective leaders understand their own fears and how that shows up in their decision making.

The post How Your Deepest Fears Might Be Influencing Your Decision Making appeared first on David C. Baker.

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929 days ago
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Mythbusting the Freelancing Life

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For someone who works full time either in an office or remotely, freelancing can sound like a dream. Get up whenever you want? No boss handing you tasks or looking over your shoulder to make sure you're not just on twitter? Shop for shoes at 2:00 pm on a Wednesday? No pointless Zoom meetings? It sounds like paradise.

Yes, freelancing can be all those things. The reality is that while those things do happen, it's not all a tasty ice cream sundae. Like many things, the truth lies somewhere in the middle.

For years, people have peppered me with questions about freelancing. I've been doing it for 13 years now. In that time I've dispelled a lot of myths and dissuaded a lot of super smart, hard working people from going freelance. If you've ever dreamed about going solo, I want to bust some myths about the freelance life. Let's get into it!

Myth 1: Setting your own schedule

Okay, yes. For the most part, you're in charge of your time. The alarm clock no longer rules your life. That's probably the biggest perk to going freelance. You can hit the gym at any time of day or have coffee with a friend whenever you want. Even the experience of doing simple errands is completely different. Picking up groceries at 2:00 pm instead of battling traffic after the workday is a dream.

Here's the flip side.

If you land a great client and they happen to be in a different time zone, you may need to adjust your schedule to accommodate their needs. Or consider that in the 11th hour of a deadline, your client suddenly remembers a feature or some content they wanted to include. There go your Friday night plans and your weekend with the kids.

Freelancing is a business. It's your business. While no one is there to tell you when to be at the office, also there's no one to pick up the slack when you get sick or just want to chill.

Myth 2: No boss hassling you all day

This is true. No one is lurking over your shoulder with their stinky lunch breath making sure you're on task. There's no one popping up on Zoom to "check in." That's all over.

The thing is, the person you used to call Boss is now called Client. And while clients don't have actual authority over you, they can sometimes be as (if not more) annoying than a boss. Most of my clients have been wonderful, but there have been those needy ones who literally took over my life. From those people, get ready to handle constant emails and texts, needing updates on projects where the deadline is still weeks away.

It can be tempting to tell those clients to F**k off, but just as if you said that to your boss, your paycheck will disappear along with the client.

Myth 3: Pointless meetings are over

Oh, if this were true. I have a particular aversion to Zoom meetings. I think I have an actual video meeting allergy.

If you work in an office, you probably attend a lot meetings that could have been a Slack message. Those meetings are over. Yay!

What takes their place are new kinds of meetings. A prospective client will want to do a Zoom call or meet for coffee just to see what you're like. Or, in the middle of a project, they'll want to meet just to "get some new ideas across." Sometimes they just want to talk, and you're the closest person available. Welcome to being a therapist.

The other new kinds of meetings are networking. It's Meetups on Zoom to get established in your industry. It's being present on a particular Discord server or showing up in forums to help people out. I'll be honest, I'm not a fan of networking myself. But I know that those kinds of meetings help establish me as a pro and help build my business.

Myth 4: You can spend the day at the beach

Well, of course you can. No one is stopping you. Don't forget that now you're in charge. Except that now you need to consider that if no one is working in your freelance business, no one is making any money.

Just today (Wednesday), I took my family to the beach after breakfast (which is what prompted this post). We spent a couple hours there and headed home. While it was fun and I have no regrets, I also worked a full day after that. I'm also prepared to work on the weekend to make up for any lag in my productivity. That's just how it works. At the same time, I wouldn't dare go to the beach on a summer weekend, so it works out for me.

Myth 5: The money is better

It can be, if you do it well. But guess who's now in charge of paying the IRS (before you file your annual return) and handling your health care plan? That's right. It's you. Even if you manage to bring in what you were making full time, the cost of doing business adds up fast. So you need to be prepared to make a lot more than you were making before.

Also, you are now the entire Marketing and Sales team. If you don't hustle, you don't get clients and you don't get paid. You're going to have to get good at meeting new people. You're going to have to be okay with "interviewing" for new jobs frequently.

The money can be better. It also comes in waves. You could snag a high-paying gig that lasts three months, and then hear crickets chirping for the next two. To keep paying your bills on time, you'll need to get creative. It can be tempting to buy a new laptop when you get a windfall client, but when times are tough you can't eat the laptop for dinner. Good budgeting and delaying gratification are crucial to your success. You may also need to diversify your income by taking on other types of gigs that are easier to come by. They may pay less, but when things are slow, you'll at least be bring in some cash.

Alternatives that feel like freelancing

I hope I haven't put you completely off your freelancing dream (don't worry, that's coming up). It may not be the right thing for you, and that is completely okay. Knowing that about yourself is empowering.

There may be some alternatives you can consider to get some of those freelance perks.


First, take some time to think about your job and the company you work for. Is it as bad as all that? Maybe it is, I don't know. I've had some pretty bad jobs in my life. Consider that another department might be a better fit for you. Or if you hate your boss, maybe you can talk to their boss and see if you can transfer.

Remote work

A lot of people have been working remotely during the pandemic. If you want to keep that going, maybe you can negotiate for that, or at least a few days per week. A lot of companies are forcing people back to the office, so that may not work out. Maybe it's time to look for a different company?

Flex hours

If you have to be in the office, do you really need to be chained to your desk for eight hours? Maybe you can work out a schedule where you come in earlier or leave later. If you can be there during peak times when someone may need to see you in person, you may be able to work out a flex schedule.

None of this stuff is easy to ask for and it's not guaranteed to happen. But if you don't ask, you don't get.

Don't quit your job!

If you haven't quit your job yet, don't. Dip your toe in the freelancing waters by taking on side projects while still employed. Work your way up to the point where you're confident you're going to have steady work.

If you're thinking No way! There's no time in my day to do "side projects!" WTF? then I'm sorry to break the news, but freelancing is not going to work for you. You're not going to work less or even the same when you quit your full time job, you're going to work longer and harder than you ever have. So if you're not ready to take on extra, then you're not ready for freelancing.

If that didn't dissuade you, than I say go for it. Going solo has a lot of perks and it can be a great life. If you want to explore it, make sure you go in with your eyes wide open.

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1051 days ago
Great article on the myths and realities of the freelancing life.
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Harder Than It Looks, Not As Fun as It Seems


There’s a saying – I don’t know whose – that an expert is always from out of town. It’s similar to the Bible quote that no man is a prophet in his own country. That one has deeper meaning, but they both get across an important point: Everyone’s human, everyone’s flawed, nobody knows everything. So it’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.

Keep that in mind when comparing your career, business, and life to others.

Good advice that took me a while to learn is that everything is sales. Everything is sales. It’s usually framed as career advice – no matter what your role in a company is, your ultimate job is to help sales. But it applies to so many things.

Everything is sales also means that everyone is trying to craft an image of who they are. The image helps them sell themselves to others. Some are more aggressive than others, but everyone plays the image game, even if it’s subconscious. Since they’re crafting the image, it’s not a complete view. There’s a filter. Skills are advertised, flaws are hidden.

A friend recently complained about how inefficient his employer is. Processes are poor, communication is bad. He then said a competitor company had its act together. I asked him how he knew that – he’s never worked there and has never been inside the company. Fair, he said. It just seems that way from the outside.

But almost everything looks better from the outside. I guarantee workers at the competitor find flaws in the way their company operates, because they know about their company what my friend knows about his: how the sausage is made. All the messy personalities and difficult decisions that you only see when you’re inside, in the trenches. “All businesses are loosely functioning disasters” Brent Beshore says. But it’s like an iceberg, only a fraction is visible.

It’s the same for people. Instagram is full of beach vacation photos, not flight delay photos. Resumes highlight career wins but are silent on doubt and worry. Investing gurus are easy to elevate to mythical status because you don’t know them well enough to witness times when their decision-making process was ordinary, if not awful.

Of course there’s a spectrum. Some companies operate better than others, some people are more insightful than average. A few are extraordinary.

But it’s always hard to know where anyone sits on that spectrum when they’ve carefully crafted an image of who they are. “The grass is always greener on the side that’s fertilized with bullshit,” the saying goes.

Occasionally a window into reality cracks open. Warren Buffett’s biography The Snowball revealed that the most admired person in this industry has at times had a miserable family life – part his own doing, the collateral damage of life where picking stocks was the highest priority. Same for Bill and Melinda Gates in the last month. Elon Musk broke down in tears three years ago when asked about the mental toll of Tesla’s struggles. “This has really come at the expense of seeing my kids. And seeing friends.”

Sometimes the behind-the-scenes isn’t tragic but is just as revealing.

The Chris Rock I see on Netflix is hilarious, flawless. The Chris Rock that performs in dozens of small clubs each year is just OK. No one is so good at comedy that every joke they write is funny. So every big comedian tests their material in small clubs before using it in big venues. Rock explained:

When I start a tour, it’s not like I start out in arenas. Before this last tour I performed in this place in New Brunswick called the Stress Factory. I did about 40 or 50 shows getting ready for the tour.

One newspaper described Rock at the Stress Factory fumbling with material to an indifferent audience. “I’m going to have to cut some of these jokes,” he says mid-skit. That isn’t bad; he’s still a genius. But back to the iceberg: what most of us see is a fraction of what happened. And it’s stripped of all the hard parts.

It leads to a few things:

When you are keenly aware of your own struggles but blind to others’, it’s easy to assume you’re missing some skill or secret that others have. The more we describe successful people as having guru-like powers, the more everyone else looks at them and says, “I could never do that.” Which is unfortunate, because more people would be willing to try if they knew that those they admire are probably normal people who played the odds right.

When someone is viewed as more extraordinary than they are, you’re more likely to overvalue their opinion on things they have no special talent in. Like a successful hedge fund manager’s political views, or a politician’s investment advice. Only when you get to know someone well do you realize the best you can do in life is to become an expert at some things while remaining inept at others – and that’s if you’re good. There’s an important difference between someone whose specific talent should be celebrated vs. someone whose ideas should never be questioned. Eat the orange, throw away the peel.

Everyone’s dealing with problems they don’t advertise, at least until you get to know them well. Keep that in mind and you become more forgiving – to yourself and others.

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1094 days ago
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Should you take on clients outside of your niche?

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Very occasionally, a prospect will come along who doesn’t fit into one of my two niches (coworking spaces or marketing consultants).

Despite being booked solid the past year and a half, I will occasionally take on work outside of my areas of specialization—especially if I think I can help.

But I do have some standards about who I’ll let in.

The big ones are:

  1. Am I interested in this project?
  2. Do I connect with the person I’m speaking to?
  3. Do they have a reasonable budget?
  4. Do they have a niche/are they differentiated enough?

This fourth one is a big one.

If they’re in a niche or have a distinct differentiator, I’ll consider the project.

If not, I’ll check to see if they’re open to finding a tighter position to help them stand out to the right people.

One of the hardest things to do as a marketing consultant is helping those who are not sufficiently focused or differentiated.

Marketing to a sea of generalities is a recipe for disaster—and I don’t want to be on that ship when it hits the shore.

If the prospect’s business is interesting, I connect with them personally to a degree, it pays well, and they currently are or are willing to make hard choices to become a “Category of One”, then I’ll consider them.

Otherwise, there’s no good reason to do so—especially when I’m busy.

And thankfully, I’m always pretty busy. 🙂

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1095 days ago
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Getting the Goalpost to Stop Moving


There aren’t many iron laws of money. But here’s one, and perhaps the most important: If expectations grow faster than income you’ll never be happy with your money. One of the most important financial skills is getting the goalpost to stop moving. It’s also one of the hardest.

First, a little story about the 1950s.

“The present and immediate future seem astonishingly good,” LIFE magazine’s January, 1953 cover story begins.

“The country has just lived through what was economically the greatest year in its history” it wrote. It had done this with “10 straight years of full employment, through new management attitudes which include an increasing realization that the well-paid worker, who does his job under healthy and agreeable conditions, is a valuable worker.”

Wealth came so fast to so many it was jarring. “In the 1930s I worried about how I could eat,” LIFE quotes one taxi driver. “Now I’m worrying about where to park.”

If these quotes don’t surprise you it’s because the 1950s are so often remembered as the golden age of middle-class prosperity. Ask Americans when the country was at its greatest and the 1950s is usually near the top. Compared to today? Different worlds, no comparison. The overwhelming feeling is: It was better then.

George Friedman, a geopolitical forecaster, summarized the nostalgia a few years ago:

In the 1950s and 1960s, the median income allowed you to live with a single earner — normally the husband, with the wife typically working as a homemaker — and roughly three children. It permitted the purchase of modest tract housing, one late model car and an older one. It allowed a driving vacation somewhere and, with care, some savings as well. I know this because my family was lower-middle class, and this is how we lived, and I know many others in my generation who had the same background.

There are two ways to debate a position: Asking whether it’s true and asking whether it’s contextually complete.

This version of the 1950s lifestyle is true in the sense that the median American family indeed had three kids and a dog named Spot and a breadwinning husband who worked at the factory and so on.

But the idea that the typical family was better off then than now – that they were more prosperous and more secure, by nearly any metric – is so easy to debunk.

That doesn’t mean those yearning for the 1950s are necessarily wrong. It just shows that something else changed in the last 70 years that created a gap between what happened and how people feel about what happened.

And that something else is not complex: America’s wealth grew but its expectations grew more.

The numbers are not close. Median family income adjusted for inflation was $29,000 in 1955. In 1965 it was $42,000. In 2018 it was $63,000 (last year was higher but stimulus checks skew the data). Higher median income wasn’t due to working more hours, or entirely due to women joining the workforce in greater numbers. Median hourly wages adjusted for inflation are nearly 50% higher today than in 1955.

LIFE described the 1950s as prosperous in a way that would have seemed unbelievable to someone living in the 1920s. The same is true today – a 1950s family would have found it unfathomable that their grandchildren would earn 50% more than they did.

Some of today’s economic worries would have puzzled a 1950s family.

Healthcare costs have indeed exploded in the last 20 years. But half of Americans didn’t even have health insurance in 1950, and two-thirds lacked “surgical insurance” to cover a major incident – which partly explains why 4% of Americans didn’t live to see their fifth birthday in 1950 vs. less than 1% today.

Saving for retirement is a burden today, but in the 1950s the entire concept of retirement was a luxury reserved for the upper classes – 47% of men age 65+ were still working in 1950 vs. 23% today, to say nothing of how much more physically demanding a typical job was back then. Average Social Security checks adjusted for inflation were half what they are today; poverty among those age 65+ was nearly 30% compared with less than 10% today.

The homeownership rate was 12 percentage points lower in 1950 than it is today.

An average home was a third smaller than todays despite having more occupants.

Food consumed 29% of an average household’s budget in 1950 vs. 12.9% today.

Workplace deaths were three times higher than today.

That’s the economic era we long for?

Yes. And it’s important to understand why.

Ben Ferencz had a hard childhood. His immigrant father didn’t speak English, was unemployable, and settled in an area of New York controlled by the Italian mob where virtually everyone got beaten up.

But Ferencz said none of it seemed to bother his parents. They were thrilled. He recalled:

It was a tough life but they didn’t know it because where they’d come from it was tougher. So it was an improvement no matter what.

The Ferenczes fled Hungary to escape Jewish persecution during the Holocaust. His family came to America on an open deck of a ship in the middle of winter, nearly freezing to death. Ben later became a lawyer and prosecuted Nazi war criminals during the Nuremberg trials, and today seems to be one of the happiest people I’ve come across.

It’s staggering how expectations can alter how you interpret current circumstances.

In 2004 the New York Times interviewed Stephen Hawking, the late scientist whose motor-neuron disease left him paralyzed and unable to talk since age 21.

“Are you always this cheerful?” the Times asked.

“My expectations were reduced to zero when I was 21,” Hawking said. “Everything since then has been a bonus,” he replied.

If an abjectly terrible situation can be offset with low expectations, the opposite is true.

Not long after the Times interviewed Hawking it interviewed Gary Kremen, who founded Match.com. At the time Kremen was 43 years old and worth $10 million. That put him in the top half of 1% in the country, and probably the top 1,000th of 1% in the world. In Silicon Valley, it made him just another guy. “You’re nobody here at $10 million,” he said. The Times wrote: “He logs 60- to 80-hour workweeks because he does not think he has nearly enough money to ease up.”

The point here isn’t to say Hawking has the clarity of a monk or that Kremen was out of touch. Just that all happiness relies on expectations.

And Kremen’s situation is by far the more common one. It’s natural. It’s so natural that an important question is wondering if most of us walk through life on the same path.

Warren Buffett once told a group of college students and told them that every one of them lives better than John D. Rockefeller:

I mean you’re warm in winter and cool in summer and can watch the World Series on TV. You can do anything in the world. You literally live better than Rockefeller. His unparalleled fortune couldn’t buy what we now take for granted, whether the field is—to name just a few—transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do.

This is another one of those technically-right-but- contextually wrong problems. Rockefeller never had Advil or sunscreen or penicillin. But nobody today wakes up in the morning feeling better off than Rockefeller because that’s not how people’s heads work.

People gauge their wellbeing relative to those around them. It’s the path of least resistance to determining what life owes you and what you should expect. Everyone does it. And goalposts move both ways: Sebastian Junger’s book Tribes details the long history of camaraderie during shared disasters, like soldiers during war and neighbors during natural disasters. Hardship is more palatable when everyone around you is in the same boat.

Subconsciously or not, everyone looks around and says “What do other people like me have? What do they do? Because that’s what I should have and do as well.”

And this, I think, is a window into understanding why we yearn for the 1950s despite today being better by almost any measure.

Paul Graham wrote a few years ago about what happened to the U.S. economy after World War II:

The effects of World War II were both economic and social. Economically, it decreased variation in income. Like all modern armed forces, America’s were socialist economically. From each according to his ability, to each according to his need. More or less. Higher ranking members of the military got more (as higher ranking members of socialist societies always do), but what they got was fixed according to their rank. And the flattening effect wasn’t limited to those under arms, because the US economy was conscripted too. Between 1942 and 1945 all wages were set by the National War Labor Board. Like the military, they defaulted to flatness.

Indeed, a few years after the war historian Frederick Lewis Allan wrote:

The enormous lead of the well-to-do in the economic race has been considerably reduced.

It is the industrial workers who as a group have done best – people such as a steelworker’s family who used to live on $2,500 and now are getting $4,500, or the highly skilled machine-tool operator’s family who used to have $3,000 and now can spend an annual $5,500 or more.

As for the top one percent, the really well-to-do and the rich, whom we might classify very roughly indeed as the $16,000-and-over group, their share of the total national income, after taxes, had come down by 1945 from 13 percent to 7 percent.

This went beyond income – even the variation in consumer goods flattened out. Harper’s Magazine wrote something in 1957 that was so important to the era:

The rich man smokes the same sort of cigarettes as the poor man, shaves with the same sort of razor, uses the same sort of telephone, vacuum cleaner, radio, and TV set, has the same sort of lighting and heating equipment in his house, and so on indefinitely. The differences between his automobile and the poor man’s are minor. Essentially they have similar engines, similar fittings. In the early years of the century there was a hierarchy of automobiles.

If you look at the 1950s and ask what was different that made it feel so great?, this is your answer. The gap between you and most of the people around you wasn’t large. It created an era where it was easy to keep your expectations in check because few people lived dramatically better than you.

It’s the one thing – maybe the only thing – that distinguishes itself from other periods

The lower wages felt great because they’re what everyone else earned.

The smaller homes felt nice because everyone else lived in one too.

The lack of healthcare was acceptable because your neighbors were in the same circumstances.

Hand-me-downs were acceptable clothes because everyone else wore them.

Camping was an adequate vacation because that’s what everyone else did.

It was the one modern era when there wasn’t much social pressure to increase your expectations beyond your income. Economic growth accrued straight to happiness. People weren’t just better off; they felt better off.

And it was short-lived, of course.

By the early 1980s the post-war togetherness that dominated the 1950s and 1960s gave way to more stratified growth where many people plodded along while a few grew exponentially. The glorious lifestyles of the few inflated the aspirations of the many.

Rockefeller never yearned for Advil because he didn’t know it existed. But modern inequality mixed with social media has made it so you do know that people drive Lamborghinis and fly in private jets and send their kids to expensive schools. The ability to say, “I want that, why don’t I have that? Why does he get it but I don’t?” is so much greater now than it was just a few generations ago.

Today’s economy is good at creating two things: wealth, and the ability to show off wealth. Part of that is great, because saying “I want that too” is such a powerful motivator of progress. Yet the point stands: We might have higher incomes, more wealth, and bigger homes – but it’s all so quickly smothered by inflated expectations.

That, in many ways, has been the defining characteristic of the last 40 years of economic growth. And Covid-19 pushed the trend into hyperdrive.

The point isn’t to say the 1950s were better or fairer or even that we should strive to rebuild the old system – that’s a different topic.

But nostalgia for the 1950s is one of the best examples of what happens when expectations grow faster than incomes.

And all of us, no matter how much we earn, should ask how we can avoid the same fate.

Jesse Livermore was one of the richest men in the world in 1929. By 1934 he was bankrupt – again – living off the money his wife saved from a previous marriage. “I am a failure,” he wrote, before shooting himself in a New York hotel.

Livermore’s story – the greatest investor of all time whose success led to bigger bets that eventually ruined him, a process he repeated three times – is fascinating because he was the best in the world at making money and perhaps the worst at keeping it.

By his own admission, the problem was rooted in past success increasing his appetite for future success. If he could double his money in a year, why not triple? If he could triple, why not quadruple? And so on until he went broke.

Livermore wrote shortly before his death:

I sometimes think that no price is too high for a speculator to pay to learn that which will keep him from getting the swelled head. A great many smashes by brilliant men can be traced directly to the swelled head – an expensive disease everywhere to everybody, but particularly in Wall Street.

He is the most extreme example. But the idea that if you don’t know where the boundaries are you’ll keep pushing until you blow past them has universal truth.

Whether it’s savings or investing, getting the goalpost to stop moving – or at least move slower than your income grows – is the only way to both be happy with what you have and ensure you don’t push beyond the limits of what you can handle.

It requires two skills.

One is the constant reminder that wealth is a two-part equation: what you have and what you expect/need. When you realize that each part is equally important, you realize that the overwhelming attention we pay to getting more and the negligible attention we put on managing expectations makes little sense, especially because the expectations side can be so much more in your control.

The second is realizing that managing expectations doesn’t have to mean being conservative or unambitious. It’s just realizing that an insatiable appetite for more will always push you to the point of disappointment and regret – always, every single time. So having some ability to deny an extra dollar of work, or a potential opportunity, a bigger house or a nicer car, is essential if you want to use money to make a better life.

This story, told by Kurt Vonnegut, can’t be told enough; it’s that important:

True story, Word of Honor:

Joseph Heller, an important and funny writer now dead, and I were at a party given by a billionaire on Shelter Island.

I said, “Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel ‘Catch-22’ has earned in its entire history?”

And Joe said, “I’ve got something he can never have.”

And I said, “What on earth could that be, Joe?”

And Joe said, “The knowledge that I’ve got enough.”

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