If You Drove Half as Fast, You'd Still Get There on Time Cover

If You Drove Half as Fast, You’d Still Get There on Time

When he lived in Santa Monica, Derek Sivers found the perfect bike path: A 15-mile round trip along the ocean with almost zero traffic. In his afternoons, he’d get on his bike and race full speed ahead. On average, the trip took him 43 minutes to complete.

After several months of arriving with a red face, a sweaty head, and feeling completely exhausted, Derek decided to take it easy for once. He looked at the scenery. He saw some dolphins. He casually pedaled along. It took him 45 minutes.

At first, Derek couldn’t believe it, but he double-checked his numbers, and, sure enough, he achieved 96% of the result with 50% of the effort. Reflecting on the experience, he writes:

When I notice that I’m all stressed out about something or driving myself to exhaustion, I remember that bike ride and try dialing back my effort by 50%. It’s been amazing how often everything gets done just as well and just as fast, with what feels like half the effort.

A few years ago, my Dad and I used to do something similar: We raced home in our cars. It’s about five miles from the city to the suburbs, and we too used to speed, catch yellow traffic lights, and overtake anyone in our way.

One day, we did the math: If you go 50% over the limit on such a short trip, you’ll save about one minute. We’ve been cruising ever since.

Life is like that a lot. You go all out to be 50% faster, better, stronger, only to arrive one day early at the finish line.

It’s easy to get caught up the everyday hustle. “Let me queue in the other line.” “I can cut a corner here.” “Maybe, I can get them to approve my application faster.” Switching lanes often feels efficient in the moment but won’t make a big difference in the end.

This applies to our daily to-do lists as much as it applies to our biggest goals. If you get the report one day sooner, the company can go public one day earlier — but all that means is that its shares will trade one day extra. On a 10-year-timeline, who cares about that day? No one.

You can stay up till 2 AM and post one extra article. But in your five-year-plan of becoming a writer, does it really matter? Sometimes, it will. Most of the time, however, it won’t. But if you don’t get enough sleep, you can’t see through your five-year-plan. That part always matters.

You can race to your friend’s BBQ and honk and yell at every other driver along the way. Or, you can drive half as fast and still get there on time.

You’d arrive relaxed, happy, and in a positive state of mind. You wouldn’t be exhausted from all the stress that took so much from your mind but added so little to your outcome. This is what Derek learned from his frantic bike rides:

Half of my effort wasn’t effort at all, but just unnecessary stress that made me feel like I was doing my best.

Sometimes, doing your best means having nothing left to give. Usually, it doesn’t. More often than not, feeling completely spent is a sign that you wasted most of your energy.

Energy is precious. Conserve it. Direct it efficiently. Take pride in doing your best in a way that lets you do your best again tomorrow. Life is short. Enjoy it. Don’t burn through it too quickly. Be content with the 96%.

After all, what good are two extra minutes if you can’t use them to gaze at the sea?

The 4-Ears Model of Good Communication Cover

The 4-Ears Model of Good Communication

All relationship problems are communication problems.

Tim says: “The window is open.”

Maya says: “I’m not your butler.”

Whoa! How did such a small interaction go so wrong? Tim said just four words, but, immediately, his girlfriend felt offended. Sadly, exchanges like this happen millions of times every single day. I’m sure you’ve had one.

Maybe, Tim just thought out loud as he noticed the window being open. Maybe, he wanted Maya to notice the birds singing outside or tell her that he opened it for a reason. Or, he really did want Maya to close the window.

Unfortunately, Maya responded so fast that she didn’t have time to consider all these options. Her heuristic-driven brain jumped to one conclusion when it should have thought about many.

We all do this. We speak before we think, and we damage our relationships in the process. Today, Maya snubs Tim. Tomorrow, Tim cuts Maya off. And the day after tomorrow, Tim and Maya break up. How sad and unnecessary.

If Tim and Maya had taken some time to talk about how they communicate, they might still be together. This is called meta-communication, and it makes perfect sense: If all relationship problems are communication problems, improving your communication will make most of your problems go away.

Read More
How To Never Wonder How Much To Tip Ever Again Cover

How To Never Wonder How Much To Tip Ever Again

It’s ironic: If you don’t tip for your burger, your waitress can’t eat.

In the United States, more than half of service workers’ earnings come from tips. For many of them, this figure equates to about $850/month, meaning it’s essential to their ability to pay for rent, food, and utilities.

Even with tips, most wait staff and bartenders only earn around $10/hr. That’s just 25% above minimum wage. Even in countries like Germany, where minimum wage is about $1,700/month and tips are less critical, they can make the difference between a life that’s acceptable and one that’s enjoyable.

It’s simple: Unless the service was terrible, tipping your waiter is the right thing to do.

Unfortunately, the process of calculating your tip can introduce a lot of friction into what should be an easy task. This friction often causes us to tip less than we intended and, sometimes, nothing at all.

Read More
What I Learned Losing $300,000 Cover

What I Learned Losing $300,000

In January 2018, my crypto portfolio showed a value of $350,000. At the time, I had invested about $20,000, making the multiple a cool 18x.

A smart man might have cashed out some of that money; a genius would’ve cashed out all of it. I was neither smart nor a genius, and so I watched that $350,000 shrink into $30,000 at its lowest point over the last 2.5 years — all while continuing to invest. My portfolio has recovered a good bit since then, but it’s still far from its all-time high.

The only way to learn how to act in a financial bubble is to live through one. You can read all the psychology and trading books in the world — how you’ll handle the real experience is written into none of them.

Me, I had to go up and down to learn. I don’t regret anything. I had a lot of fun, and I learned a great deal in an extremely compressed period of time. Some of my initial theses crumbled to bits, but I believe others are still valid.

I wanted to take enough time to reflect on this story. It’s been three years since I first began studying cryptocurrency, and today is a good day to tell it.

Here are 9 lessons I learned about money and investing.

Disclaimer: I’m not a financial advisor. This post recounts my personal experience as an individual. If anything, it’s probably a tutorial on what not to do rather than what to do.

1. Don’t count your chickens before they hatch

I guess technically, I didn’t “lose” $300,000 — because you can’t lose something you don’t have. The money never hit my bank account.

To this day, I haven’t cashed out a single cent. I’ve sold assets to buy others, but whether at a profit or at a loss, I always used that money to buy more assets. That’s a fine strategy to have, I think. They always say, “Treat the money you invest as if it’s gone forever.”

On some days, however, I pretended to have that money. I felt and behaved like someone with $300,000 in the bank. That’s not good, because that’s what leads to feelings of remorse when you later do realize that, actually, you don’t have the money. Never count your chickens before they hatch.

2. Think about profit before you think about taxes

In Germany, any gains from cryptocurrency you held for more than a year are tax-free. That’s a tempting promise, and so my plan from day one was to hold everything for at least a year.

(Un)fortunately, the profits came and went much quicker than that. Paying taxes on $100,000 in profits is a lot better than having no profits to pay taxes on.

But the flip side of the German tax rule — any gains you make from selling within a year become part of your overall taxable income (and thus drag up your tax bill for everything else) — clouded my thinking.

You have to take profits when there are profits to take, period.

3. A good time to take profits is when they feel too good to be true

Looking at old screenshots, I realized my portfolio hit $100,000 on December 23rd, 2017. On January 7th, 2018, it hit $300,000. When your portfolio triples in two weeks, it’s probably a good time to take profits.

For months, I spent 2–3 hours every day studying blockchain technology and the crypto markets. There were enough signs. I listened to smart Youtubers every day. I distinctly remember one of them pointing at a vertical chart, saying: “Anyone who doesn’t tell you to take profits on a chart like this is probably trying to scam you.” But since it didn’t align with my plan, I didn’t understand the urgency of taking profits. And so I never took them.

In hindsight, I would always take some profits when times are so good you know they won’t last. Planned or not, it’ll still give you peace of mind.

4. Have an exit plan before you enter

My investing philosophy is compounding every dollar I can spare indefinitely. I’m not in a rush, and I know the biggest jumps on an exponential curve happen at the very end of said curve.

That said, you should always have a contingency plan. In my case, “What do I do if my portfolio grows a lot before I hit the tax-free holding period?” I never asked myself that question, and that’s why I didn’t have an exit plan to follow.

The best time to come up with an exit plan is before you even invest. “If this grows 100% in a year, I’ll sell 50%.” Making these plans won’t guarantee you execute them, but if you don’t have them, you definitely won’t do anything.

5. Numbers rarely reflect reality

Most people are frustrated with the markets because they want them to reflect reality — but that’s not what markets do.

The stock market is a discounted version of the expected future economy. The crypto market reflects the expected value of future blockchain networks. When people have bleak expectations, prices are bleak too. And when people are euphoric, so are the prices — regardless of our current reality.

On any given day, some crypto networks are grossly undervalued, whereas others are worth more than they should be. The same applies to companies in the stock market.

Numbers rarely reflect reality — but that doesn’t matter as long as you adapt to what the numbers are. Don’t let cognitive dissonance get it in the way of managing your money as best as you can.

6. When you have “a number,” nothing else matters

In finance movies like Wall Street, there is often the question of, “What’s your number?” Allegedly, everyone in the business has an exact sum of money for which they would retire and quit competing in the markets.

Unlike trading, wealth is not a zero-sum game. The things you create can add value to everyone’s benefit and at nobody’s expense. That said, a number can still be your guiding star in a positive sense. My number is $10 million.

Naval Ravikant is a thinker, philosopher, and investor. His net worth could be anything from $4 million to $4 billion, but I’ll never forget him saying, “Every time you see one of these billionaire founders giving away to a hospital or whatever, you know they overshot. They didn’t need that much money.”

$10 million will pay for the lifestyle I want to have until I die. It’s a lofty goal, but it’s also comforting. I don’t need a $600 million yacht. I need freedom.

The good thing about determining your number is you know exactly where you’re headed. Nothing else matters. It’s much easier to take profits — or stomach losing money if you don’t — when you know your long-term goal.

7. When you believe in something, commit to it

One of the conclusions I drew after hundreds of hours of research is that, yes, blockchain has lots of potential, but, like the internet in 1993, the mountain of unlocking it still lies ahead of us.

It’ll take years to build the infrastructure upon which good blockchain apps can attract a large share of the population, and there are many ways the effort could fail. If it works, however, the rising tide will lift all boats.

Amazon’s stock went down 95% after the dot-com bubble burst — from $100 to $5. 20 years later, the drop looks like a blip on the radar, and one share costs $3,000.

At the end of the day, what matters in investing is taking out more money than you put in. Right now, I’m down 20%. I used to be up 1,650%. Will both look like a rounding error in two decades? I don’t know, but I believe in the industry, and that’s why I’m still in the game.

8. Make risky investments when you’re young

When I tell people that I invest most of my money into cryptocurrency, they often tell me I’m insane. I think investing in risky assets when you’re young is actually quite reasonable.

When you’re young, you don’t need a lot of money. You still have the energy to recover from financial setbacks. And every extra day of being invested early will add exponentially to your compounding returns decades later.

I want to buy my riskiest assets first, not last. If I lose $100,000 now, I can recover. If I’m late to the party, most of the returns will have already happened. The more my crypto portfolio grows, the more I’ll invest into stocks. Then, I can look at index funds, real estate, and so on.

The older you get, the less risk you should take on in exchange for safer returns. Start bold, grow more timid. You don’t want to bet the house when you’re 60. You want to bet it while you can still build another house.

9. Save early and aggressively

As my friends are starting their first jobs out of college, some go from earning $0 to earning $4,000. I often tell them: How you spend your first paycheck will determine how you spend every paycheck.

It only takes one month of spending it all to get used to spending it all. Five years later, you’ll still have $0 invested, and you’ll have lost the last five years of your exponential growth curve — the years with the biggest returns.

Even if you don’t earn a lot, chances are, you can take away 10% and it won’t hurt at all. Maybe even 30%. Or 50%. However much you can put aside without feeling pinched, do it and do it now.

Whether you first save for a while or invest all of it right away, the only way to learn to manage and grow your money is to commit some of it to that end.

How To Not Be Gullible Cover

How To Not Be Gullible

In 1997, 14-year-old Nathan Zohner used the science fair to alert his fellow citizens of a deadly, dangerous chemical.

In his report Dihydrogen Monoxide: The Unrecognized Killer, Nathan outlined all the alarming characteristics of the colorless, odorless, tasteless compound — DHMO for short — which kills thousands of Americans each year:

  • DHMO can cause severe burns both while in gas and solid form.
  • It is a major component of acid rain and often found in removed tumors of cancer patients.
  • DHMO accelerates corrosion of both natural elements and many metals.
  • Ingesting too much DHMO leads to excessive sweating and urination.
  • For everyone with a dependency on DHMO, withdrawal leads to death.

After giving his presentation, Nathan asked 50 fellow students what should be done. 43 — a staggering 86% — voted to ban DHMO from school grounds.

There was only one problem: Dihydrogen monoxide is water.

Every day, people use facts to deceive you because you let them.

Life is hard. We all get fooled six ways from Sunday. People lie to us, we miscommunicate, and it’s impossible to always correctly read other people’s feelings. But facts? If we let facts deceive us, that’s on us.

When it’s hard to be right, there is nothing wrong with being wrong. But when it only takes a few minutes or even seconds to verify, learn, and educate yourself, choosing to stay ignorant is really just that: A decision — and likely one for which you’ll get the bill sooner rather than later.

If you know a little Latin, Greek, or simply pay attention in chemistry class, the term “dihydrogen monoxide” is easy to deconstruct. “Di” means “two,” hydrogen is an element (H on the periodic table), “mono” means one and “oxide” means oxidized — an oxygen atom (O on the periodic table) has been added. Two hydrogens, once oxidized. Two Hs, one O. H2O. Water.

When Nathan ran his experiment “How Gullible Are We?” in 1997, people didn’t have smartphones. They did, however, go to chemistry class. Nathan’s classmates had parents working in the sector, and they all had chemistry books. They even could have asked their teacher: “What’s dihydrogen monoxide?” But none of them did.

In his final report, Nathan wrote he was shocked that so many of his friends were so easily fooled. “I don’t feel comfortable with the current level of understanding,” he said. James Glassman, who wrote about the incident in the Washington Post, even coined the term “Zohnerism” to describe someone using a fact to mislead people.

Today, we have smartphones. We have a library larger than Alexandria’s in our pocket and finding any page from any book takes mere seconds. Yet, we still get “zohnered” on a daily basis. We allow ourselves to be.

“Too much sugar is bad for you. Don’t eat any sugar.” Yes, too much sugar is bad, but the corollary isn’t to stop eating it altogether. Carbohydrates are the body’s main source of energy, and they’re all broken down into various forms of sugar. It’s a vital component of a functioning metabolism. Plus, each body has its own nuances, so cutting out sugar without more research could actually be bad for you. But if I’m selling a no-sugar diet, who cares, right?

You care. You should. And that’s why it’s your job to verify such claims. It’s easy to spin something correct in a way that sends you in whatever direction the manipulator wants to send you. The only solution is to work hard in order to not let yourself be manipulated:

  • Say “I don’t know” when you don’t know. I know it’s hard, but it’s the most liberating phrase in the world. Whenever you’re out of your comfort zone, practice. “Actually, I don’t know, let me look it up.”
  • Admit that you don’t know to yourself. You’ll miss some chances to say “I don’t know.” That’s okay, you can still educate yourself in private later. Your awareness of your ignorance is as important as fighting it.
  • Google everything. When you’re not 100% sure what a word means, google it. When you want to know where a word comes from, google it. When you know you used to know but are hazy on the details, google it. Seriously. Googling takes ten seconds. Google everything.
  • Learn about your biases. Hundreds of cognitive biases affect our thinking and decisions every waking second. Learning about them and occasionally brushing up on that knowledge will go a long way.
  • When someone argues for one side of a conflict, research both. Whether it’s a story in the news, a political issue, or even the issue of where to get lunch, don’t let yourself get clobbered into one corner. Yes, McDonald’s is cheap. Yes, you like their fries. But what about Burger King? What do you like and not like about both of them?
  • When someone talks in absolutes, add a question mark to every sentence. James Altucher often does this with his own thoughts, but it’s equally helpful in questioning the authority of others. Don’t think in absolutes. Think in questions.

The dihydrogen monoxide play has been used many times to point people at their own ignorance. A 1994 version created by Craig Jackson petitions people to “act now” before ending on a truthful yet tongue-in-cheek note: “What you don’t know can hurt you and others throughout the world.”

Richard Feynman received the Nobel prize in physics, but he started his journey as a curious boy, just like Nathan Zohner. Like Einstein, he believed inquisitiveness could solve any problem, and so he always spoke in simple terms — to get people interested in science.

He also said the following, which still rings true today: “The first principle is that you must not fool yourself — and you are the easiest person to fool.”