Cash Out

Okay, so you’ve found a magic box. It has rules written on it, so you know how it works. Here’s what it says:

If you put exactly one dollar in this box and leave it, then every day the amount of money in the box will increase by 10%. Once this process is started, you may only stop it by opening the box and taking out all the money, and then the box will never work again.”

When do you cash out?

Delayed gratification is good. Delayed gratification is both good for you as a disciplined person in control of your life, and it’s good in the sense that gratification can almost always be increased by delaying it. Working hard today instead of indulging very frequently lets you indulge more tomorrow.

It’s like that famous marshmallow test where they gave kids a single marshmallow, but then told them if they could delay eating it for a certain amount of time they’d get a second one. The kids that delayed and got two marshmallows ended up having better life outcomes along a number of metrics later in their life.

Here’s the thing, though: you’re not immortal. You have a finite number of days upon this Earth, and you don’t even get the luxury of knowing how many. Which means at some point it’s possible to delay your gratification so effectively that you never actually get it at all.

Life isn’t really as “all or nothing” as that magic box. In real life, eventually you can start taking out 8% as your investments grow by 10% and still be gaining and having a nest egg. But the magic box hypothetical is a way of reminding you that there’s a cost to delaying your gratification – every day your investment grows is one day fewer that you can do anything with it.

Now of course, life isn’t Brewster’s Millions. You don’t have to spend everything you’ve earned before you die; you’re allowed to leave some behind to causes you believe in or your children or whatever else. A selfless life where you delay all or most of your own gratification in order to better others is definitely a fine thing. Besides, there’s only a certain level of “gratification” you can absorb before any additional won’t really do anything for you. Bill Gates gives 99% of his money away and still has more than he could ever spend; his lifestyle isn’t negatively impacted at all. Past a certain point that’s true for you, too.

But here’s the real point, the heart of the matter. In most cases, you don’t actually get more gratification just by delaying it. If those kids had waited 15 minutes before eating a marshmallow of their own, with no one around to give them a second one, it wouldn’t have increased their gratification at all. There needs to still be some input, something happening to push that gratification out. If you get $100 and instead of spending it on luxuries you decide to invest it in a used lawnmower and you start mowing lawns and then end up with $300, that’s delayed gratification. If you just take the $100 and put it in a box under your bed for a month before retrieving it to spend on the same luxuries you would have in the first place, that’s not doing anything productive.

And that means that “cashing out” isn’t about finally claiming your reward. It’s about eventually deciding for yourself that you’ve mowed enough lawns. Even if you then take all the money you’ve earned and give it to charity or your children and don’t spend a dime on yourself, you still gain something in that moment – your time, your freedom, your effort returned to you.

Some people never cash out. Not because they don’t intend to or didn’t want to, but because the process of delaying gratification got away from them and became more important than understanding what their real goal was. It can be really hard once you’re on a roll; if things are going well and you’re doing better every year it can be especially difficult to just say “okay, that’s enough.”

But for everything in life, there’s an “enough.” A time when you’ve had your run and it’s time to bask. A time to cash out.


There’s a cheesy sentiment that I strongly dislike, which is the idea that it was good that various bad things happened to you because they got you where you are today.

That’s bunk. It’s of course better if fewer bad things happen. A life where nothing bad ever happens would be ideal! I mean, by the logic of the opening statement you should just be blindly walking into traffic all the time because bad things make your life better and put you in a better future position.

So yeah, a life with no bad events would be great. But that’s not going to happen.

Bad things will absolutely happen to you. So here’s what you have to do: you have to make the cheesy sentiment true.

I know someone who’s a trauma counselor. She entered that profession due to some very severe trauma that was inflicted on her. She would sometimes talk about that particular trauma and say that it happened to her for a reason, in order to prepare her to be a counselor that could help others. And that in that sense, it was good for her.

But what really happened was more meaningful. What really happened was that something very happened for her for no reason at all other than that the world can sometimes be very, very cruel. But then, she refused to accept that. She gave her misery a reason to have happened, choosing to do the thing it had prepared her for. She wasn’t destined at the beginning of her life to be a trauma counselor and needed that catalyst event to set her on that path. No, she made her own destiny, by living better than the misery had wanted her to.

To outlive doesn’t just mean to live longer. It means to live better. Better than the crushing weight of all the unavoidable bad things that a cruel universe will inflict on you. Those things don’t happen for a reason. But you can make one.

Everyone I Know

You have absolutely no idea just how much of a bubble you live in.

People have very little idea of how homogenous their concentric circles of friends, family, and close acquaintances are. If the full spectrum of how different humans can be is represented by a football field, then the full range of your circle occupies about half a yard.

It’s a really, really easy thing to forget. By nature, you don’t interact much with the people you never interact with, right? So how would you know that your circle is so monotone?

You can rarely tell it about yourself. But if you know what to look for, you can see it in lots of other people. And then if you maintain a little logical consistency, you can infer that you’re probably not the one cultural polyglot in the whole world.

Here’s a clue to watch out for, something that I’ll prime you for: the phrase “everyone I know.”

Oh, what chuckles that phrase now solicits from me!

Whenever someone says “everyone I know,” they’re almost always trying to infer a universal fact from this particular demographic certainty. For instance, someone might say “Everyone I know loves avant-garde music,” and thus be implying that love of avant-garde music is universal. But of course it’s not – instead, the fact that you like weird tunes means you probably hang with a crowd that likes weird tunes and people with more mainstream musical tastes are tired of talking to you, so you’ve reduced “everyone you know” to only Thinking Plague fans.

This, in turn, creates some pretty major blind spots for you. It might be comforting to think that your opinions and values represent the Vast Majority and only a few crazed or vicious outliers disagree with you in any substantial way. Comforting – right up until you’re proven wrong in a sudden shock. Me, I prefer to have a good sense of how people will react and behave, and that means trusting that they won’t necessarily think like me.

Just remember, “everyone you know” is about a few hundred people at most. The world has seven billion. Your country might have a few hundred million. Heck, “everyone you know” probably isn’t even 10% of the people that live in your Zip code.

Holes In Your Theory

I absolutely love this picture:

Here’s the story: in WWII, the RAF was losing a lot of planes to German anti-aircraft fire and they wanted to increase the armor on them. But increasing armor over the whole plane would hinder their ability to fly well and also be really costly, so they were trying to be efficient by only armoring the places where a little extra armor would have the highest impact.

The way they figured out where to armor was to look at every single plane that came back from a battle and make a graph of where the bullet holes were. They’d then only armor those spots.

If you don’t see the hole (ha!) in this plan, don’t worry – the entire project team didn’t either. Only a mathematician named Abraham Wald spotted the error. You see, they were charting the bullet holes on the planes that came back. They couldn’t look at the ones that didn’t, of course. But that means literally every single bullet hole they charted was non-fatal. Where they needed the armor, Wald pointed out, was any place on their chart that didn’t have any bullet holes. Because that meant that shots to that area were fatal every time.

This is symptomatic of a larger blind spot we tend to have, which is that we measure what we can measure, and then draw conclusions from the measurements without realizing what we didn’t or couldn’t measure that may be really, really important.

This is what I was talking about just a few days ago when I wrote about companies that say that every person on their sales team is hitting quota. Sure, every salesperson on your team is making their numbers – just like how every plane that comes back has no bullet holes in the middle of the wing. You’re not measuring the planes that don’t come back – or the salespeople who get fired.

This is also the reason why a LOT of polls, on just about every topic from politics to consumer preferences, are garbage. If you ask people to reach out to you if they like a particular thing, and then say “nearly 100% of people who reached out to us said they liked X,” then you’re not measuring the people who didn’t reach out – and thus probably don’t like X. Or the reverse.

Don’t accept partial information. When making a decision you really need…

…the hole story.

Speed Bumps

An object in motion will remain in motion unless something stops it.

It’s the same with you.

People don’t quit things that are going well, smoothly, and according to plan. If you look in the mirror one day and decide you want to start working out, great. And if from day one it’s easy, fun, and fulfilling? If you start seeing results instantly and you magically never have a day where you’re too tired or too busy to put in your exercise time? Then you’re not going to suddenly stop doing it for no reason.

When people stop doing things they initially wanted to do, they often explain it to others – or even themselves – by saying vague things like “oh, you know, life just got in the way.” But that is never, ever the case.

What actually happened was that there was one day, a single moment, where that day’s effort to continue on the path was less than the effort required to overcome that day’s challenges. You missed that day, and then because it’s harder to start than to keep going, you never started back up.

If you want to really keep a goal in your sights, you need to do three things to make the math work.

  1. Increase your own motivation. There are plenty of ways to do this – good discipline, a solid self-reward structure, publicly announcing your intentions, aligning with allies – but the point is that you’ll need something to motivate you when times are tough, even if it’s extreme.
  2. Decrease the effort required. I know that sometimes effort is the point (like in exercise), but that doesn’t mean you can’t be making it easier for yourself to fail. For instance, if you join a gym – join the one closest to your house, not the one across town. Stuff like that. Remove as many potential obstacles as you can in advance so you hit fewer speed bumps overall.
  3. Get rid of the safety net – and replace it with a trampoline. Your “failure plan” shouldn’t be something that catches you and then deposits you safely on the ground. It should be something that bounces you back into the fight. You’ll miss a day here and there. Be okay with getting back on tomorrow or taking a partial victory.

Pick a clear road, rev your engine, and be okay with pulling back onto the highway if you veer a little. You’ll get there.

The Battle for the Middle

Your life is all about changes. Sometimes you’re trying to make them. Sometimes you’re trying to prevent them. Sometimes you’re trying to direct them. But life, by its very nature, is centered in one way or another around our interaction with changes.

In the short term, we tend to do a lot of trying to prevent changes. Most people on average don’t want super-dynamic changes every single day of their lives. They want their regular days to be pretty predictable. So they try to prevent changes – injuries, fires, being let go from their job, etc.

In the long-term, however, we’re generally the driver of change. Emergencies and unexpected changes are by nature immediate – very few unexpected changes happen on a 10-year timeline. So most of the things that will be different about your life in ten years are the result of actions you choose to take.

So the conflict between your short-term actions and your long-term actions can really be thought of as a conflict between your reactionary behavior and your proactive behavior.

You can’t ever eliminate all reactionary behavior because sometimes things catch on fire. Sometimes a car hits yours. Sometimes you lose your job or a family member gets sick or any number of chaotic things life throws at you.

But the goal, the real goal, is to change the middle term. To take the line that exists between areas where you’re forced to be reactive and areas where you’re free to be proactive and and to push it ever closer to into King Reactive’s kingdom, taking more and more territory away and giving it to Queen Proactive.

Cherish the small wins here. It’s easy to face a situation where you’re forced to be reactive, something you couldn’t have planned for, and then throw up your hands in frustration at the fact that the world is inherently chaotic and all your plans are for naught. But don’t let that happen. Remember that you can’t ever eliminate chaos, but that’s not the goal. The goal is incremental steps towards proactive behavior.

That often means more work. It means that you have to plan and save and build shields and contingencies while you’re still putting out fires and dodging bullets. But every iota of order you pluck from the future solves a problem tomorrow before it happens. At first, it’s war. But you can win it.

Secret Denominator

I recently came across a list of Top 25 companies by “happiness of employees.” There are lots and lots of flaws with most methodologies that measure abstract things like “happiness,” but I’m only going to focus on one today. It practically leapt off the page at me when I saw it.

I’m not going to put any particular company on blast here, but one company jumped out at me because I knew this company well. I’d never worked for them directly, but I worked in an industry that interacted with a lot of their employees. And they were miserable.

So miserable, in fact, that there was excessively high turnover. And then – ah ha.

How do you raise the average wage of your employees while also saving money? Simple: you fire the lowest-paid 10%. Boom, now your average wage is higher even though your total payroll cost is lower and no employee is making a penny more.

How do you get really high employee happiness? Fire all the unhappy employees. Or just make them so unhappy that they quit.

That’s the “secret denominator.” What isn’t being measured or observed – or at least isn’t being reported. I remember first learning about this nasty trick in sales recruiting. A company could honestly say as part of it’s recruitment efforts that “over 95% of our sales reps make over $100k/year,” because they’d set the quota at $25k/quarter and fired anyone who didn’t make quota in the first three quarters. So it was technically true that virtually all sales reps made that much, but the part that never got filled in was “out of how many that tried?”

Always look for the secret denominator. Look for what isn’t being counted.

The Bow

You loved the place you went, but you hated the plane ride.

You thought the meal tasted delicious, but you disagreed with which pots they made it in.

You loved the present you got, but hated the bow.

I have a rule about process. Your own process matters tremendously; much more than the end result. With other people or external things, their end result matters much more than their process.

Caring about someone else’s process is called training, and it’s worth money. I wouldn’t do it unless that person was paying me or was my kid, generally speaking. If someone else is doing something for you, it’s usually precisely because it’s inefficient for you to do it yourself.

You pay a restaurant to cook for you. Even if you’re an expert chef, it wouldn’t make sense for you to go back there and oversee the process of your meal being prepared. You’re making future decisions based on the results.

This is especially true with what we’ll call “Heisenberg Results.” Those are results where measuring the process actually changes the results! Obviously that chef wouldn’t make as good a meal with you hovering over them.

Don’t worry about the bow – worry about what’s in the box.

Early Bird

The earlier I write, the better my writing tends to be. This is a strange contradiction for me since I’m naturally such a night owl. But maybe that’s why – maybe it’s specifically the friction between my natural states that creates the right environment for good idea-sifting.

Another reason, however: at the beginning of the day, anything could happen. So I’m writing about potential. At the end of the day, everything has happened, so I’m looking for lessons and insights only from the discrete events that have occurred. Naturally, that’s a smaller pool of potential catalysts than all events that could occur.

Or maybe this post isn’t very good; after all, I’m writing it pretty late.

Him Cho Chung

As often as I can, I like to attend my daughter’s karate lessons. I’m always present for her tests, demonstrations and other events, but I also like to watch at least one practice per week. In the beginning, this was just about observing my daughter’s behavior and other such mundane parental things, but that’s long since passed. She rocks, and she doesn’t do it for me. After the first time she broke a board, I beamingly told her I was proud of her. She didn’t thank me. Instead, wise beyond her years, she said “I’m proud of myself.”

So nowadays, I watch for two reasons. One, because I think it’s important to be an active participant in my child’s adventures. And two, because I’m so freakin’ impressed and fascinated by it all!

Tonight, they deviated from their normal routine a bit to do a really challenging drill. A very light foam block was placed atop a pillar that was about the height of the average kid in her class. The pillar was also pretty light and was not secured to anything. The kids stood on one side, and on the other side a small circle was placed on the ground, directly adjacent to the pillar.

The kids had to use their feet to push the foam block off the pillar and have it land in the circle. They couldn’t knock over the pillar.

“Him Cho Chung” means “Control of Power.”

So picture my daughter. Eight years old. She’s standing on one foot, chambering a kick with her other – but she can’t actually kick, or this super-light foam block will go flying. No, she has to reach out (maintaining her balance so she doesn’t kick over the pillar!) and gently push this foam block over until it slides off the pillar and into the circle on the other side, and then pull her foot back without disrupting the pillar.

They had to repeat this until they could do it three times. I was on the edge of my seat the whole time.

In our adult lives, we’re rarely bulls in china shops. “Too much power” doesn’t usually mean breaking something (although in some real ways, it can mean that). What it usually does mean for us is more insidious – it means expending resources you didn’t need to. And resources are scarce. If you accomplish a goal with 300% more juice than you needed, that’s a lot wasted. Being able to control your power is synonymous with being able to husband your resources.

Sometimes, as with the drill my daughter did today, controlling your power actually takes more effort than throwing a full-strength (but quick) kick. But that’s because it’s practice. You do it to get good at it, to understand it. And then in life, you do exactly what you need to accomplish your goal, saving the rest in reserve for the next one.

Just like she did when she got all three blocks in the circle.