The Trend Towards Minimalism

Feels good to be vindicated, yet again, or perhaps my own behaviour is not so uncommon but merely representative of the prevailing attitude of my generation. After all, it’s “widely known” that Millennials value experiences over things.

As for retail, owners have to adapt or die. Innovative retail stores are experimenting with ways to blend a more experiential type of shopping with brands and goods. As the article recognizes:

“Shoppers are reaching a tipping point around American consumption,” it read. “Feelings of angst about acquiring too much ‘stuff’ is driving a shift toward purchasing experiences rather than things.”

Those of us who are involved in entrepreneurship recognize this. As the older generation dies out, Millennial preferences will increasingly drive profitable product lines. We see this in the traditional media, which initially resisted the move to digital (Napster was merely early) before eventually acquiescing (see: Hulu) to the tidal shift. Those that continue to resist (ESPN, Comcast) face declining revenues from cord cutters.

In general, being “light”, mobile, portable, flexible, and catering to the customer’s preferences for when, where, and how to consume something is the new name of the game. Amazon recognizes this. Old retail still tries to force someone to come into a brick and mortar store and be assailed by rude and unhelpful sales representatives. That’s not a winning approach.


Follow Your Passions, After Your Career

The story of the Hong Kong banker who quit his job to work in humanitarian aid is truly inspiring and definitely relatable.

One question that Asian children (probably others as well, but I’m speaking from experience here) agonize over when growing up is whether to pursue something profitable (often at the behest of their parents), or something that they’re truly passionate about. It’s rare that these intersect, unless your passion is money. Many times, these kids get so immersed into their studies in school that they don’t even find their passion until much later in life. Then they are filled with regret and resentment.

My approach is to have the best of both worlds. Grind through school in your 20s and get out into a great career. Work overtime and make tons of money early. Guaranteed high income fields like banking and medicine are very suitable for this. The reason is that it’s easier to learn new things quickly when we’re still young. Also, money earned when young is more valuable because it has time to compound.

Do this when you’re young enough and you can emerge in your mid 30s with enough money to retire and live purely off your investments. Then it’s time to find and focus on your passion. I suggest at this point some combination of travel, volunteering, philanthropy, teaching/mentoring, and entrepreneurship. More details on this to come in my upcoming book on happiness.

Doing the opposite by finding your passion when young generally means you have a brief happy time in your adolescence, but at the cost of potential financial destitution in mid life. You also lose out on important things like compounded savings and moving up the career ladder. This can make you profoundly unhappy. One caveat remains. This option may be a good choice that maximizes happiness if you know you’ll die young.


Does Hard Work Pay Off?

I’m doing a bit of reading these days, and several passages from selected works stand out to me as epiphanies into the easy road of life.

Consider two siblings. The older brother works hard, studies, keeps his head down, gets good grades, graduates with a degree in engineering or accounting, and goes on to a satisfying middle class life with a steady job and income stream.

The younger brother hangs out with his friends, gets mediocre grades, and goes to a typical state school. There, he makes friends and through them joins a startup and eventually strikes it rich and makes it on boards of major corporations.

What is the difference between the two? A healthy dose of luck and circumstance to be sure, but there’s a fundamental philosophic difference between their approaches. The older brother tries to do things through the “official” recognized paths. The younger brother tried to find short cuts in life. In today’s world, there’s a lot of room for backdoor negotiations in smoke filled rooms, nepotism, and corruption. Going through the hush hush unofficial pathway can lead to greater riches for a lower price.

Take for example this passage from the book Hillbilly Elegy that I’m reading now:

It was pretty clear that there was some mysterious force at work, and I had just tapped into it for the first time. I had always thought that when you need a job, you look online for job postings. And then you submit a dozen resumes. And then you hope that someone calls you back. if you’re lucky, maybe a friend puts your resume at the top of the pile. if you’re qualified for a very high-demand profession, like accounting, maybe the job search comes a bit easier. But the rules are basically the same.

The problem is, virtually everyone who plays by those rules fails. That week of interviews showed me that successful people are playing an entirely different game. They don’t flood the job market with resumes, hoping that some employer will grace them with an interview. They network. They email a friend of a friend to make sure their name gets the look it deserves. They have their uncles call old college buddies. They have their school’s career service office set up interviews months in advance on their behalf. They have parents tell them how to dress, what to say,and whom to schmooze.

In the modern world, it’s not about how much you know, but who you know. The best jobs are usually not posted, or if they are it’s just for theater. The company probably has already identified an internal candidate or a friend of a friend for the spot. It sucks for those of us who bury our heads in the books and stay on the straight and narrow, but at least we now know what to change to be successful.


Follow Your [Profitable] Dreams, Redux

Short post here. In my last post, I mentioned that the best path that balances all factors contributing to happiness is to work hard in one’s 20s in a high paying job, then quit after becoming financially independent/self-sufficient to focus purely on one’s hobbies/passions without any financial constraints.

One of my favourite singers, Antje Duvekot, is doing this in her own life. She admittedly toured quite frequently when she was younger, only to tire of the road and long for a more settled existence. You can read her interview, which is quoted here:

You haven’t been touring as much lately.  Does that feel strange to you?  Or do you find that it’s helped bring some sense of normalcy to your life?

Well, I’m a lot poorer because of it. But a lot happier. I now live in Boston. I take Spanish classes, volunteer at an adult education center, lead the music program at the humanist hub, see friends, neighbors. My home is now not just another strange place I pass through on my way to another tour on my way to encounter more strangers (albeit with a better bed and no check-out time in the morning). It is now actually a place to me. There are no words for how important it is to human mental health to be able to build something in one place. Being perma-transient sucks balls. Plus the shows I play now feel wonderful. I am more present and playing for people feels more deliberate, like a true privilege, rather than a permanent state of refugee status. Not to be melodramatic or anything, lol. For melodrama see track 5 on the new record “Caffeinated Warriors,” about my growing hate-affair with the road. That being said, I am still touring a good amount, but I go out for a few days and come home, and I don’t do more than one away-tour a month with additional drivable shows sprinkled in. It’s been good for me and I think good for my art as well.

Later on in your career, making the tradeoff of sacrificing income for increased free time, hobbies, travel, and friends becomes worthwhile. It’s a lot easier if we’ve saved sufficiently ahead of time when young, to allow compounding to work its magic. This is precisely why I’m operating on a career taper, starting out at 1.3x full time and reducing my workload by one tenth every year until 0.5 (half time), and then working ad hoc at that point.


Musings on Lucrative Traditional (and Untraditional) Jobs

Shifting gears now, I will now raise some recent examples of lucrative traditional jobs and how eye-popping their pay can be. Yes, I’ll be using some real world numbers here.

  1. Uber drivers: This article show the reality of how workers from all over rush to SF to earn the Bay Area premium (as a freelance taxi driver) which comes out to about $7 per 12 minutes, before expenses, which is much more than what someone unskilled can make in the Central Valley or Sacramento. What is striking is that they can make as much as $1500 per day, as the article states, though it’s work working hard and being opportunistic in monitoring for surge pricing. At the same time, they need to keep their expenses low by
  2. Temp workers: Don’t think of these guys as just lowly paid undocumented immigrants. Some of the most lucrative positions out there can be found by filling in as short-term workers, especially if you have specialized skills. But there are some out there that don’t neen need skills, just willingess to work in “undesirable” areas. Examples of this include a friend of a friend who went to Alaska to work in the canneries as a regular laborer. Hours were long and the environment was unforgiving (if pristine). He worked hard (16 hour days and a dangerous line of work) but took home $50,000 in 3 months. My book has other examples of geographic arbitrage opportunities like this. I’ll keep an eye out for more “gold rush boom” opportunities that arise and let you know on this blog.
  3. Nurses: You can get one of these degrees after just 2 years at a community college, so it’s an insanely accessible career path. You need to learn some protocols and get some practice, but at the end of the day it doesn’t involve deep cognitive processing. Things also get easier with practice and longevity, making life and work easier with time. There’s also great career stability and a nationwide shortage. Oh, and the schedule (3 shifts per week) can’t be beat. Just today I learned that the pay starts at about $60-70 per hour and you can get 2.5x base pay for working “unseasonable hours” like weekends, holidays, nights, and as emergency call up.
  4. Corrections officers: Thanks to unions, the prison system in California is generously funded. Despite a declining prison population, you can get a very generous pay and pension package in corrections. The promotional website boasts six figure salaries starting out (after accounting for overtime and vacation/night pay), with a monthly stipend during your cadet training years. There’s even a controversial article on WSJ about whether being a prison guard is better than getting a degree from Harvard. Sure, if you go to work right away and keep your job without getting laid off. My perspective is that a Harvard degree gives you more flexibility and opens doors to more types of jobs, including more interesting and cognitive based ones that are more resistant to automation and outsourcing.

Is Social Media Conducive to Success?

I’m shaking my head at young kids these days, stuck on their phones, obtaining (and believing) all their information from the internet and social media, regardless of how authoritative the sources. At times, I feel like an old fart, stuck with dialup and landline phones, grumbling about the decline of Usenet and email, and not yet adopting the new technology.

But really, more often than not, social media makes you dumb. It’s a time waster where friends tempt you seemingly glamorous lifestyles, which are in reality carefully cultivated slices of their life. Being exposed to those things can lead to depression and endless peer competition. By focusing too much on the virtual life, we lose track of reality. Tangible things like reading, studying, exercising, and connecting with people in the real world become lost. We lose motivation and don’t spend time doing productive things.

However, given the large audience base, it’s unavoidable for big companies to have a presence on social media. This also applies to small businesses that we start, where viral marketing can really enhance growth. After all, who can turn down free advertising.

The best balance that I’ve found is to have accounts on Facebook and Twitter, and have them be driven by bots. Automatically post articles and such on these sites, automatically add people, accept all friend requests/follows, but minimize the temptation of actually personally opening the app or site to send messages to others.

Maybe if enough people adopt this strategy, the entire Twitterverse will be filled with bots spamming other bots!


A Profitable Protected Franchise

Surprised to know how profitable auto dealership are? So was I.

Franchise laws include prohibiting manufacturers from terminating existing dealers without “good  cause,” requiring the manufacturers to sell through franchised dealers, and protecting dealers from competition by awarding exclusive territories.

These laws favor the dealers so much that when General Motors GM, -0.22% eliminated its Oldsmobile brand it coughed up $1 billion to compensate dealers, and still couldn’t avoid becoming embroiled in lawsuits. Adding to the dealers’ advantage, some states make it illegal to circumvent the dealers by selling cars online.

Dealers are profitable even when manufacturers are floundering because the dealers make money on servicing old cars and selling used ones. One reason servicing cars is so lucrative is because dealers mark up parts by as much as 80%. For example, a dealer may charge $1,800 for a turbocharger that costs around $1,000. So the dealer pockets $800 before adding labor expenses.

Yeah, there’s a reason Warren Buffett wants to get into this business. When you generate a big proportion of state sales tax revenue, you have incredible leverage to get your favoured bills through to protect your business, at the expense of the average man. How can the rest of us avoid paying tax to this cartel? Move to a place with better public transportation and never drive again.


Millennials Just Hustling to Survive

One big theme in my book is how everyone, especially millennials, have found ways to compensate for the rise in living costs without a corresponding increase in wages. One big way to do this is unfortunately to work a side job. Traditionally, this was limited to low-wage service industry workers. I remember hearing stories from my patients waking up at 4 AM to drive to work in Los Angeles from the outer suburbs, only to return in the evening and work a second shift at a local restaurant. Mind you, all this is to just cover the bills – it isn’t even about making extra spending money.

This practice has now slowly but surely engulfed millennials, many of whom are recent graduates from university who can’t find any meaningful well-paying work in their fields. Many of them choose to monetize hobbies. As the article describes:

The 31-year-old Torontonian makes adult Sailor Moon outfits and sells them on Facebook, a gig she estimates brings in about $800 a month on top of what she earns in her full-time position at a mascot manufacturer.


Covering everything from teaching English over Skype to driving an Uber, the term has even found its way into Urban Dictionary, where it’s defined as “sideline that brings in cash.”

It’s a tough time out there. Regardless of whether extra money is a need or a bonus, you can monetize your talents in one of these ways. See more details on side gigs in my book on wealth, as well as ways to turn your hobbies into highly profitable businesses.


Minimalist Like the Japanese

I recently published an article about my experiences in Japan. One thing that stood out to me was the culture’s emphasis on minimalism. Part of it probably comes from the lack of space. Japan is an island with a few major cities, and as such people crowd into small apartments the size of shoeboxes in the US. That forces them to be selective with what they own and keep in the home. You can’t really hoard much without quickly being unable to get around.

The other inspiration for their minimalism is their culture’s appreciation of subdued elegance, a leftover from Zen Buddhism. It preaches harmony of yourself with your surroundings, inner peace, and beauty in emptiness (and by extension, empty spaces). It’s definitely an appealing (and cheap) way of interior design your home.

Still, there are some Japanese who take this to an extreme. Some hardcore minimalists have less in their house than some jail cells. You may need to find the best balance that works for you.

Luckily, with the advances in technology, it’s easier than ever to digitize our possessions and have instant access to them from a mobile device anywhere in the world.


How Time Warner’s Acquisition Increases Your Cable Bills

Those who value competition should shed a tear for Charter’s acquisition of Time Warner Cable. The cable and internet oligopoly just shrunk even further. The US lags far behind the rest of the world in speed, pricing, and availability of high speed internet, and much of that is due to consolidation in the telecommunications industry. The few players have nicely carved out the country among themselves, preferring dominance over a section rather than expensive face-to-face competition. It makes sense. Laying down fiberoptic cables and building radio towers are expensive propositions.

It should come as no surprise then that after the acquisition, Time Warner immediately shook up their internet offerings. Previously, they had a $15 per month “everyday” package and a $30/month “basic” internet package. Those are gone. The cheapest remaining option is the previous mid-tier “extreme” package, at $35/month promotional pricing. By lopping off the low end, Time Warner nudges everyone slowly along the ladder to higher price points, making the company more profitable.

This is not consumer friendly! If their intent was to bring faster internet to all, they would have kept the same price points and instead raised the speed for each tier. That’s not what happened.

old twc internet options
The old internet plan lineup
new twc internet options
And now… After the acquisition

Oh, forget about being grandfathered in on the cheaper older plan. Time Warner has already planned for those people. You see, the advertised price of $15/month for the cheapest internet is actually $35/month with a $20/month promotional discount that lasts for a year. After that year, you can either re-up for another yearlong contract for whatever discount is offered at that time. By trimming the cheapest plans, Time Warner will count on attrition to nudge people on the older plans to upgrade. How cunningly have they planned things, for the $35/month true price for the cheapest internet matches the promotional discount price for the cheapest package offered after the acquisition (the “Extreme” plan). Someone on the Everyday plan whose promotional discount has already run out will compare the two and decide to “upgrade” to the Extreme plan for no change in monthly payment  and faster speeds.

While this is a big argument for telecom to be regulated like utilities (it won’t happen here; there’s too much money to influence government), what options does the little guy have? We can take cord cutting to the next extreme by refusing to play. Vote with our wallets and give up the cable or DSL internet and rely fully on LTE 4G from our phones. With tethering, we can turn our phones into wifi hotspots and broadcast internet to all devices that can connect to it. Tmobile offers a nice 4G package that’s throttled, not data capped, past a certain data limit. For the average consumer who consumes media and doesn’t need a fast internet connection, this should be plenty to meet his or her needs.

If you live in an available area, look into Google Fiber. Originally started in Kansas City, it’s now spreading across the country as a way to get high speed internet on the cheap. The lowest tier option gives you fast and free (!) internet at the price of a one time set up fee. What’s more, Google’s goal is to use fiber to bring more people online and to get them to use Google’s services. They don’t need to make a profit from being an ISP (internet service provider). That’s why I anticipate that they’ll be able to keep prices low going forward.