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Brainpower boosters? Not so fast…

Happy BrainBeing in the self-help space to some degree, I see an awful lot of products designed to “boost your brainpower.” This is an interesting value proposition, but it’s incomplete. You need to ask: how will you use the boosted brainpower? What will you expect it to do that your current brainpower isn’t doing?

This is an extremely important question. In my experience, brainpower is NOT what holds people back. What holds people back is not brainpower, it’s how the brainpower they have is organized. Brainpower is secondary to the ability to take action, align actions in mutually reinforcing ways towards a goal, and use feedback from the world to make mid-course corrections.

For example, if your primary attitude towards life and the world is a “victim mindset,” do you really want to boots your brainpower? You’ll be that much more effective at finding ways to explain why you’re a victim and not in control of your own life.

Boosting brainpower without making sure you’re using it for something worthwhile is like putting in a high-horsepower engine without making sure your car is pointed in the direction you want to go. What determines where you end up is the direction of the car. The horsepower only affects how fast you’ll get there.

FIRST choose a worthwhile direction.
THEN boost your brainpower.

Social Media and “The Good Life”

I just spent a week camping at a festival. We were in a far away place, with no power outlets and only spotty cell phone coverage. It seemed best to put my iPhone away and spend the entire time disconnected.

Logging into Facebook, checking my email, and returning to the online world, it’s once again glaringly obvious how little it seems to add to my life. The quiet and serenity was lacking in reaction-driven seratonin hits, but it was wonderful for just enjoying being in the here-and-now.

Try disconnecting for a while. It’s really fun!

What makes a good driving question for life?

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If you were only allowed to ask one question of yourself to move you into action each morning, what one question would have the greatest chance of creating the best life for you?

In a recent Get-it-Done Guy episode, I explored the nature of using driving questions to shape your life. My episodes are often created from events in my own life. As many of you know, several years ago I did a three year experiment in Living an Extraordinary Life which later turned into a TEDx talk, a webinar, and a series of talks. You can even download an MP3 of the Living an Extraordinary Life webinar.

The driving questions episode came from my decision (largely made unconsciously and revealed to me by my unconscious mind in the late afternoon of June 17, 2014) to re-start the Experiment discussed in the presentation. In short, what driving questions drive an extraordinary life?

Here are some candidate questions so far:

  • What am I grateful for?
  • Who do I want to hang out with?
  • Who do I want to serve?
  • What do I want to do?
  • Who do I want to be?
  • What do I want to build?
  • What would I do if I were on vacation?
  • Who are the people I want to become?

These are all good questions to ask as part of a periodic life review. That’s very different from the way I’m proposing to use them, however. The proposal on the table is that one of these questions–or some other question entirely–can act as a daily launching pad for life. Which question is the one that will serve best as a daily launching pad? They propel you in a very different direction, depending on which is answered.

Want to change yourself? Change the system.

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While reading “The Lucifer Effect,” it’s becoming increasingly clear how much of behavior is a product of situations and systems. I think that coaches and psychological change agents are missing this piece, big-time.

I have many people tell me that “if a person just gets clear on their big passion, they’ll make the change they need to make.” Or if they “just have an inspiring vision,” that’s enough. And yet that simply hasn’t been my experience. People go to a change agent, come back all pumped up, and six weeks later are back where they started.

(Besides, do you want a surgeon who has passion, or a surgeon who has training? There really is more to life than just having passion. Indeed, there’s research that says passion often comes from doing something you don’t like and growing to like it.)

Yes, not having an internal change will often keep you stuck. If you sabotage yourself at every turn, you’ll be stuck wherever you are. But my new opinion is internal change only works if it gets you into action. But not just any action; action needs to help create a new situation or new system that will support the new identity or new vision, or the change will eventually die out.

You don’t hear that side of the story, though. When a change agent fails with a client, they don’t trumpet the failure from the mountaintops and examine what happened in detail, to find out if their (the change agents’) models of change are insufficient. And the clients who don’t change don’t trumpet the story for obvious reasons.

My new formula:
change = change in mindset (identity, role) + change in actions + change in systems

In my NLP training and my coach training, identity has been considered a powerful shaper of behavior change. And it is, it just turns out that Situation and System can be even more powerful than identity. It also turns out that identity is shaped by behavior, even if the behavior is undertaken for neutral reasons1.

The Power to Change

 

 

  • Changing a system or a situation is the most powerful creator of change, because it forces behavior to change.
  • Changing behavior is the next most powerful, when done in a way that reshapes identity.
  • Changing identity is the least most powerful of the three, but still very powerful, because it can provide intrinsic motivation which can lead someone to change their action and their systems.
  1. see the Social Psychology literature on “commitment and consistency,” in which small behavioral changes produce identity changes. ↩

Please work for free. Not.

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I’m sure you have never asked someone to work for free. But just in case you know someone who has—or if you’ve ever been asked—here’s the kind of thing you really should say.

Today I received this letter:

Hello Mr. Stever,

 

I am writing to you on behalf of XYZ, a non-profit, CSR project of ABC (a $4 billion conglomerate operating in 16 countries). … We bring together advisors and speakers from some of the top business schools in the world… we are committed to building local intellectual capital and leveraging a business model that ensures sustainability and relevant development opportunities to our present and future business leaders.

 

To begin a relationship, we would be interested in having you as one of the subject experts for our Webinars to conduct a live complimentary webinar on a topic of your choice, and also offer you to write exclusively on our blog<.

My response:

I find your request confusing. I am a professional, who has spent several hundred thousand dollars and several decades developing my expertise.

 

While I believe I might have valuable content to offer, the key word is “valuable.” You say that you are a project of a $4 billion conglomerate, yet your business procedure seems to be asking people such as myself to work for free. That doesn’t sound like partnership; that sounds like crass exploitation. You have the money to pay your vendors, you would just rather have them work for free.

 

That is not the kind of business practice I stand for or am interested in. If you are training entrepreneurs, it is a business practice you should object to as well—any entrepreneur who does not make sure they are well-paid for their product will quickly go out of business. I strongly suspect that neither you nor the CEO of your organization work for free. I can only follow your lead and decline your offer, in favor of clients and partners who believe in paying for the value I provide.

Income inequality is simple math

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Simple math is a great way to understand a system’s behavior. I picked up this trick from Warren Buffett’s writing and speaking. Warren often figures out which mathematical elements drive behavior of a stock or industry, and then uses that to set a boundary on his investment decisions. He gave a great analysis in February 2000 of why the first internet bubble had to pop. Three weeks later, it did.

His analysis depended entirely on noting that valuations in the internet companies were assuming profit growth of 15%, while the economy as a whole was growing at 2.5%, and profits were remaining a constant share of the economy. As he put it, “mathematically, that relationship can not continue to hold. I don’t know what will collapse, I don’t know who the survivors will be—and there will be many of them—but I do know that eventually the house of cards will tumble. It has to.”

The Simple Math of Wealth Inequality

Thomas Pitteky’s new book about income inequality is apparently making a big splash. I haven’t read it, yet, but I’ve been told he is very sympathetic to my point of view. Here’s my analysis, before reading the book.

I’ve long held that the driver of wealth inequality is much simpler than policy, philosophy, or ideology. It’s simple mathematical fact, given our tax rates.

I finally ran some numbers.

Starting position: rich own 25%, everyone else, 75%
Overall tax rate on everyone else, 39% (25% federal + 14% FICA)
Overall tax rate on the Rich, 17% (mainly capital gains)
Assuming the Rich can get an average ROI of 15%, while everyone else 10%
(a reasonable assumption, given that the entire class of high risk/high return investments requires one to be an accredited investor. I.e., rich.)

With these assumptions, in 50 years (say, 1960 to 2010), the income distribution goes from rich 25%, everyone else 75% to rich 85%, everyone else 14%.

If we assume that both groups get equal returns on their money, rather than the rich getting higher returns, we still go from 25/75 to 48/51 in just 50 years

The Rich Get Richer, Purely By Virtue of Ownership

As long as the overall tax rate on the rich is lower than the overall tax rate on the poor, even independent of the range of investment opportunities available (and the rich also have enough money to have a portfolio of large-enough bets that a single winner will ultra-increase their net worth), the rich will eventually own everything.

This is independent of whether they work harder, whether they are more committed, whether they “create jobs,” or anything else. It’s purely based on their after-tax rates of return. (And as for them being job creators, note that to the extent that they can lay people off, their rates of return will increase. Hiring decreases it.)

I don’t understand why this simple mathematical fact never comes up in these discussions.

Even If The Rich Allocate Capital Poorly, They Still Win

If you run the numbers, it doesn’t matter if the rich get below-market returns. Berkshire Hathaway, Warren Buffett’s company, has only gotten market-level returns in recent years. But he’s still owning more of the economy than you are, every year.

The tax rate differential is high enough that Warren Buffett’s interest income still has a better after-tax return than you have on your entire income.

Is the very concept of work doomed?

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I just read an excellent article on XConomy by Wade Roush in which he asks the question: is technology destroying the very basis of our economy to offer employment? And assuming it is (as a thought experiment), what might we do to stop it?

First, read the article. Otherwise, my commentary won’t make much sense.

First of all, I found it fascinating that Finland and Sweden have lower taxes than the US, despite having much better social benefits. “What!?!?!?” you cry, “lower taxes? But they’re inefficient, evil socialists! It destroys the prevailing Capitalism is Best Ever narrative to say such a thing!!!”

Well, let’s take a look. My state tax is 6.25%, my Federal taxes are 33%, and my FICA taxes are 14%. Add those together and we discover that I’m paying 53% in taxes, which is about 18% MORE1 than the 45% tax rate Wade quotes for Finland and Sweden.” The big difference is that my tax dollars go mainly to private defense contractors, private insurance companies, and other private providers of services hired by the government.

What about motivation?

Wade correctly points out that such welfare states have a problem motivating people to work. But is this a problem? If the promise of industrialization is coming true—to wit, that technology will free us to pursue things that are personally meaningful rather than productive—then decreased motivation to work doesn’t seem like a huge problem.

Perhaps what we need to do is make work either voluntary, or a phase of life (say, ages 25-40), after which you can continue to work if you enjoy it and are challenged by it, otherwise you must go out and create artwork.

Warren Buffett hasn’t needed to work in any economic sense during my entire lifetime (and then some!). But he has done so, and even took on the stressful job of running Solomon Brothers. Why? Not because the money was the big incentive, but because challenge and meaning, and rescuing an institution was important to him.

This implied theory that people’s only motivation is money continues to mystify me in an age where the #1 complaint people have about their jobs is that their jobs are meaningless, paper-pushing wastes of time that are nothing more than an excuse for a paycheck.

Do any of Wade’s solutions work?

I think Wade’s option #8 is really the only viable one. Solutions like “grow our way out of it” don’t solve the underlying systemic problem. First of all, you can’t grow everything fast enough forever, so you end up in the same situation somewhere down the line. Secondly, those solutions still cling to the notion that the only legitimate way to get paid is by doing valuable work. But if the fundamental premise we’re up against is that machines are devaluing the work rapidly, then any solution that starts with the assumption that there’s enough valuable work for everyone is doomed to fail.

As for retraining, I just have to laugh. People already accumulate a lifetime’s worth of debt for their first education that will let them spend a decade to advance to a solid, mid-level, middle-class job. While I hear this meme tossed around a lot, I challenge anyone who claims it’s possible to quit their job and retrain in another unrelated job that gives them the equivalent income. (Must be unrelated because again, the premise is that the first job has been rendered economically less vaulable by technology. Thus, the replacement job must be substantially different.)

What do you think? If technology really has made a great many humans redundant for the first time in history, we’re in uncharted waters. Where do we go from here? Anywhere we want to. Where do we want to go from here?

  1. The math is a bit weird here. What I mean is that if I make $100 in the US, I pay 53% tax, leaving $47. Someone from Finland pays 45% tax, leaving $55. That’s 17.78% more than the Fins. Actually, to do this correctly would require looking at the different tax brackets and drawing a big graph of income ranges, etc. At the end of the day, however, it’s hard to argue that most middle class people pay much lower taxes in the U.S. If you factor in their need to pay for the services that Finland and Sweden provide nationally (e.g. health insurance, mortgage insurance, maternity leave, etc.), Americans definitely have lower take home pay to spend on non-essentials. ↩

Targeted Ads are the Worst of all Possible Worlds

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The justification used for the incredible invasions of privacy on the part of the internet marketers of the world is that they want to serve us “targeted” ads. Targeted ads are ads that relate to what we’re doing at the moment. Theoretically, if I’m having a discussion about how my child is dying from kidney failure, that’s exactly the moment when I’ll feet eternally grateful to be shown an ad for how to overcome that embarrassing middle aged male incontinence issue.

All joking aside, targeted ads seem worse to me than random ads, even aside from the privacy violations. I am online to get things done (sometimes work things, sometimes social). I am rarely online to buy things, and when I am, I know it.

A “targeted” ad has a much higher probability of successfully distracting me into a purchase experience and completely derailing what I’m trying to do. An untargeted ad, though distracting, is much easier to ignore and far less of a drain on my productivity.

Perhaps if I intrinsically valued purchasing things, I’d welcome targeted ads. But I don’t intrinsically value buying things.

So on the very rare occasions I’m in buying mode, targeted ads are a good thing. But in the rest of my life, which is 99% of the time, targeted ads are downright destructive.