Above Average
Hello Folks, and welcome back to the adventurous money!
It seems like forever since my last post. Life and work caught up to me. But never the less, today's post is something I have been thinking about for a while and I am sure you’ll enjoy it.
Onto today’s post...
A far, far time ago... I had written about averages. (Link Here). To refresh our memories, that post was me defending the average through the lens of investing and decision-making. I argued that average returns were not so bad and that we don't have to find good outliers in every decision we make. But recently, after reading a post on averages by Alex Murrell, I started thinking about it again.
Alex extensively wrote about how the entire world and everything in it, on AVERAGE, look similar these days. Look at a couple of examples he mentions.
In our architecture for instance, in the race to be the most efficient and functional, we have developed buildings that practically look the same. It has lost creativity, human connection, and the desire for expression over priorities like cost and profit. Take a look at the other one.
All cars on the street practically look the same and Jim Carroll chairman of the UK communication agency BBH has something to say about it. In his post "Wind Tunnel Marketing," he writes about why most of the cars on the road look alike. He mentions, "With the pressure in the board room to demonstrate ROI, we became obsessed with proof and measurement, with norms and traffic light systems. What gets measured gets done, and what gets green gets made".
Similar to our architecture, it all boils down to functionality, effectiveness, cost, and profit.
Here are a few more examples, but rather quickly:
So what's the point of showing all this to you, and how is it related to your money and investments?
Well, I believe this run towards efficiency has also led us all to think about money and investments in the same way.
Given that I have a career in financial markets, one of the things that I hear the most about is, on AVERAGE, everyone's looking for financial freedom inspired by the famous FIRE MOVEMENT in 2012.
The issue I have with the word “Financial Freedom” is similar to the issue I have with the world looking the same. Anyone who pursues this without a thought loses their individuality.
What do I mean by that?
Let me answer this question with a discussion I had with one of my friends a while back. During that time, I knew my friend was a fan of this movement and was pursuing financial freedom
Over the dining table, I asked Nishant, my friend, "Why do you work such long hours"?
To that, he answered, "I want to be financially free as soon as possible."
I knew this answer was coming my way (who doesn't want to be financially free right?). But I also knew I was going to probe further. Thus, I asked, "Tell me more about this financial freedom you are looking to achieve; what does it mean to you?"
At this point, I could tell he was thinking a little harder. Eventually, he answered, I want to be able to say, "F*** you, money! I want to work on my own terms and on my own time." I still thought this was an answer that was fed to him by the world. And I decided to press further.
"Okay, so what's important about this ability to work on your time?" I asked, "Tell me more."
The conversation had now started to feel like a burden and had gone into an awkward phase after these two questions.
I remember his expression clearly; he answered "I just want some time."
He was thriving in his job in a highly competitive environment, and nothing he had done earlier gave me or any of our friends the impression that he wanted a break from the job.
I realized I was closer to an actual answer, and I decided to press him one last time and said: "Okay, let's pretend you have time. What are you doing with that time? What's so important about being at that spot?"
After a few minutes of awkward eye-staring silence, he said, "I don't want to work long hours when I have my kid; I want to be able to spend time with him during his younger age."
His answer surprised us both. Although I had known him for many years, I had never thought he could have such thoughts! After a few sips of soda and some food, I realized his answer was not that shocking after all. A lot of us learn something surprising about our parents, and spouses years after knowing them. This wasn't different.
After this conversation, I led that discussion in a different direction and made him prioritize a few things about himself, but that isn’t the point.
I didn't share this story to tell you about my friend and our conversation. Rather, to kindle a thought within you so that you ask yourself what financial freedom is about to you.
Nishant believed his only choice was to work hard, but after he came to realize his priority he understood he could also get a less demanding job that would allow him to pursue his time with his kid, and also not burn him from working that hard.
Cost, efficiency, and Financial freedom are required but, on average are overrated.
Don't say I want financial freedom. Find out what it is about the freedom that you want. Not only you will get clarity, but you are also more likely to achieve what you are working for.
So, coming back to averages. I still think that averages are better and stand in line with my original view, because average makes most people happy, if not everyone. But if you want to be an outlier, thinking and acting how most people act is not going to help you out.
So, this is your call to action. Whether you’re in film, fashion, or finance, it doesn’t matter. Everything around us is starting to look the same, and so are our thoughts, and the only cure is creativity and clarity.
Or, as the ad agency BBH says.
When the world zigs. Zag.
Until next time…
I am on a mission to change the way people think about their money and Investments.