What is optionality? If you want a thorough answer, check out the big juicy book I spent the last couple of years writing.
In the meantime, I’ve written a post that links together everything I’ve written in one place, and gives a taste of what the book is about for new readers.
Here’s my definition of optionality, adapted from the introduction of the book, followed by 10 principles for navigating an uncertain world…
‘Better to rule in hell than serve in heaven’ is the fervently-held belief of many freelancers, entrepreneurs and digital nomads I’ve met over the last few years. They’ve all walked away from overbearing bosses, steady paychecks, and nine-to-five office hours to build their own dominions.
There are no rules in hell! You can set your own hours and fire annoying clients and be your own boss and blow off work to go drinking at 11 in the morning. But liberty always comes at a price…
We’ve established that there is no such thing as cosmic justice: it rains on the just and the unjust alike. But over the course of a lifetime, we at least vaguely shuffle in the direction of getting what we deserve. The goal of this post is to get us from ‘vague shuffling’ to ‘slightly-more-purposeful ambling’.
If you want to get lucky, the usual advice is that you have to be prepared, and then wait for opportunities. This is not very helpful.
Instead of wandering aimlessly and hoping for the best, we can use a simple framework to figure out which opportunities are worth pursuing.
This is the filter I run over pretty much every decision these days. It’s called the optionality approach…
The history of finance is a history of brains dashed on the pavement. The fact that many people tend to be ‘irrationally’ wary of the markets starts to take on a new significance: the suspicious folk-wisdom has often been correct, while the ‘experts’ have consistently been dangerously wrong.
Hence Warren Buffett’s warning: beware of geeks bearing formulas…
What’s the difference between Robert Galbraith and J.K. Rowling? Clearly, being a talented writer is necessary, but not sufficient. Rowling has momentum on her side. At this point, she could publish the contents of a bowl of alphabet soup, and it would still sell better than 99 per cent of novels by hopeful first-time authors.
This is a ‘no duh’ example, designed to get you nodding your head along. But momentum is everywhere, and it’s rarely in plain sight. Without being consciously aware of doing so, I’ve written about it in four domains…
If you ever need a refresher on the importance of fuck-you frugality, go peel off a $100 bill, and subject yourself to the silent, brooding judgment of Benjamin Franklin.
The side-eye is so doleful it traverses time and space. It’s almost as if Franklin knows his face is about to be a) rolled into a tube and stuck up some degenerate’s nostril, or b) used to purchase another superfluous piece of junk that will, in short order, be discarded upon a mountain of previously purchased superfluous junk.
Franklin’s not mad; he’s just disappointed. He wants us to be better…
Humphrey Bogart used to keep a $100 bill in his dresser drawer at all times—a decent chunk of change in the 1920s. He referred to it as his ‘fuck-you money’, because it meant he’d never be forced to take a crappy part. According to Bogie, the only good reason for making money was “so you can tell any son-of-a-bitch in the world to go to hell”.
Unlike Bogart, I am not a tough guy. One time I cried in front of my boss. She gave me the rest of the day off. In fact, all my bosses have been great. I’m struggling to think of a single person I’d like to say ‘fuck you’ to.
But there are plenty of people who I’d like to politely say ‘no thanks’ to. And I say it all the time! It’s great. If I think back on the last few years, fuck-you money has changed my life.
It’s been another self-indulgent year of funemployment for yours truly, which means I’ve had the time to read as much as I want; basically cruising around the library with my mouth open like some sort of bibliophilic basking shark. Since most people don’t have this luxury, I hope I can provide a small public service in filtering out the tastiest morsels that have passed through the bristle-like gill rakers encircling my giant, unhinged jaw…
Marry an accountant, but have occasional flings with rock stars. Lift very heavy weights for a few repetitions, then do lots of low-impact cardio. Work a secure and boring job, while pursuing highly speculative ventures on the side.
The common thread running through all these ideas is called the ‘Barbell Strategy’, and it’s useful for all sorts of big decisions – from your career and work, to health and fitness, and of course, your investment portfolio…
The chances of making it big as an artist, writer, or entrepreneur are vanishingly small. However, there is one way to not only give yourself the best shot possible at succeeding, but avoid a bone-crunching existential crisis if things don’t go according to plan.
As a small human being, I made fortnightly trips to the public library with a garbage sack slung over my shoulder. Not a tote, not a grocery bag; a big ol’ garbage sack. Short stories, novellas, comics, teen fiction, non-fiction – all of it disappeared into the sack’s insatiable maw.