You Need Options, Not Intelligence
Or, you don’t want to care about the average outcome, only favourable outcomes
👋 Hey there! My name is Abhishek. Welcome to a new edition of The Sunday Wisdom! This is the best way to learn new things with the least amount of effort.
It’s a collection of weekly explorations and inquiries into many curiosities, such as business, human nature, society, and life’s big questions. My primary goal is to give you some new perspective to think about things.
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Q: What does wealth give you, other than money that is?
In the short story Without Glasses, the house help mistakenly breaks the author Robert Lynd’s glasses thus making him angry. Lynd makes an interesting case explaining his plight. What he wants, more than anything, is the ability to pickup today’s newspaper and read it if he wishes. What angers him is that he doesn’t have that option any more.
I had read this story as part of my school curriculum, and Lynd’s argument had made an impression on me as a kid. He stresses upon the significance of having options available. Let’s understand why that is important.
It’s common knowledge that 9 out of 10 startups in a VC’s portfolio go bust. But the one that makes it through pays off a 100x in return to offset the losses caused by the rest. By that logic, VCs don’t have to be right very often. If they can avoid making absolutely foolish bets, as long as they have options, that is, multiple startups to invest in, they will benefit from the positive side of uncertainty without any serious harm from the negative side.
When you have options, you don’t have to care about the average outcome — only the favourable outcomes. Because your wins far outweigh your losses. You get a larger payoff when you are right, which also makes it unnecessary to be right too often.
All of us aren’t VCs. But like VCs, if we have options—such as money, job opportunities, business ventures—we have the luxury to make mistakes without completely blowing up. That is why we diversify our investment portfolio.
Nassim Nicholas Taleb writes: “If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognise favourable outcomes when they occur.”
Optionality helps us avoid fixed plans, and gives us the opportunity to revise our agenda, so that we can change things up based on new information.
A simple example is having many options to read. I read multiple books at a time. Thus, if I get bored with one, I’m not obligated to continue reading it, since I have the option to read another one. But if you are limited to school material and get bored, you have a tendency to give up and do nothing.
If you are bored in any situation, you always have three options: remove yourself from it, change it, or accept it. Having optionality gives you the freedom to choose from the first two.
For example, if you are stuck at a dead-end job, you don’t have many options. If you need the money, you are obligated to do the job. On that note, one of the biggest providers of optionality is wealth. Wealth, unlike what most believe, isn’t about having a lot of money; it’s about having many options.
Wealth helps you afford the independence and ability to occupy your mind only with matters that interest you. If wealth is giving you fewer options instead of more, you’re doing it wrong.
But don’t confuse optionality with opportunism. They are similar, yet very very different. In the matters of life and business, the opposite of optionality is obligation, but not when it comes to personal matters that involve others. The opposite of opportunism in human relations is loyalty. It’s a noble sentiment, but one that needs to be invested in the right places. Be loyal in your relations and moral commitments — not to your job.
My YouTube Video
What is f-you money? In this video I talk about some key insights on building long-term wealth, and share some of my lifestyle choices — why I live my life and spend my money in a certain way — and their benefits. Hope you would learn a thing or two about wealth from this.
Communication is Co-creation
A strange truth about communicating is that we don’t get to choose whether we do it or not. In the presence of others, we are always sending messages. And in the online era we are almost always in the presence of others.
When someone sends you an email, you communicate either by replying or by not replying; when someone comments on a picture you posted on Facebook, you communicate either by liking the comment or by not liking it; when you read a WhatsApp message without replying to it, the other person wonders what you meant by that.
Even when you deliberately send a message, you have frustratingly little say over it. You can say or text the words “I like you” and the other person might receive them as “I despise you”. You can carefully explain why you believe something to be true and the other person can walk away with a totally different idea of why you believe it.
What your interlocutor thinks you mean is heavily influenced by what they know about you, or think they know about you. That might be a lot, in the case of a spouse who “knows you better than you know yourself”, or almost nothing, in the case of a stranger, in which case the void may be filled by stereotypes and prejudices. Either way, the impact of what comes out of your mouth or your phone is not something you can ever fully control.
The truth is, it’s misleading to think of communication as an individual act of will. A person doesn’t simply decide when or what to communicate; she participates in a communication that’s always already underway. Communication is co-creation, whether or not we want it be.
Dealing With Chronic Stress
Constant pressure to push yourself creates chronic stress, and there’s all sorts of studies that show that chronic stress is really bad for you.
in order to understand how much we should be pushing ourselves, we have to better understand stress. We need to understand what the stress of pushing ourselves does to our bodies, how much of it we can take, and how we can, hopefully, learn to cope with it.
Stress is an external factor that causes stress response in your body. The stress response pushes certain parts of your body into high gear—but it also turns certain parts of your body off. For example, when you’re stressed digestion is inhibited. What’s the point of wasting energy on digesting food for later when you might not even survive for 10 more minutes?
This makes sense if you have to deal with stress temporarily, but humans have developed enhanced stress anticipation ability through the centuries. We anticipate bad things months, years, or even decades out. And when we do this, the very same stress response gets turned on—even though there is no immediate danger, and there is no immediate way to avoid it.
Suddenly, you aren’t just activating the stress response for a few minutes when you’re running for your life. Instead, it’s activated all the time—chronically. And this is when the problems start.
Now you start to have problems. Suddenly, your digestive system isn’t just inhibited for a few minutes while you’re escaping danger. It’s chronically inhibited. The same thing happens with your immune system—chronic stress tamps it down, and makes it harder for you to fight off diseases.
Stress isn’t good or bad. It’s a tool. In small doses it’s good, but too much of a good thing becomes a bad thing pretty quickly.
When your stress response is working properly it makes you run faster, your memory gets better, you’re able to focus better. But when your stress response is over-activated, or chronically activated—you get ulcers and heart disease.
So it’s great to push yourself—but you should be paying attention to the signs that tell you that you need a break. It’s to give yourself plenty of ways to manage stress while you’re going through it, so that it doesn’t affect you as badly as it could.
Interestingly, stress isn’t mathematical. Expose the same person to the same stressor and they will have different stress responses based on their coping strategies. Which means if you want to live a life where you’re pushing yourself, it’s best to develop a variety of coping strategies to help you manage it. Just knowing you have the option to reduce stress is enough to make something less stressful—even if you’re not actually controlling the stressors at all.
That’s why, if you take therapy, the first few sessions are often so powerful. You realise there is a way to manage how you’re feeling, even though you probably haven’t gotten around it yet.
Here are couple of ways to deal with stress:
When you’re facing mild to moderate stressors, ask yourself, How can I increase my sense of control in this situation? You might find there are simple answers that will make you feel better.
Making the stressors in your life more predictable can have a similar effect. For example, don’t observe how your stocks are performing every other minute if it gives you a mild heart attack every time.
Try exercising or journaling as outlets for your stress. Make sure not to lash out on your spouse or coworkers.
Lastly, create a vibrant sense of social support amongst friends and family..
— How Hard Should I Push Myself?
Pain isn’t Gain
One thing that is incredibly clear about pain is that it’s an action signal. Touch the stove, it hurts almost instantly, so you pull your hand away. If you don’t do it fast enough, you’ll not only get a burn, but also lose all the skin on your hand. We naturally understand that pain is trying to tell us something, and we respond to it.
But for some reason, fitness makes people dumb about it. They think they need to experience the pain, and that it somehow correlates with results. So they ignore pain, what it’s trying to tell them, and push through.
If you push too much, it can get complicated soon, and pain can become chronic pain—one of the worst things you can have to live with.
Pain always means either of the following two: you are doing something too much, or you’re not doing something enough. It’s the single best heuristic to figure out what’s wrong.
Never, ever, ignore pain signals. They’re trying to tell you something.
Before You Go…
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I’ll see you next Sunday,
Abhishek 👋