the last safe investment

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Wealth & Personal Finance

The Last Safe InvestmentI picked up “The Last Safe Investment”  by Bryan Franklin, Michael Ellsberg from the library, thinking it would provide some insight into growing wealth. I stopped reading on page 118 (I had to return the book). It sums up to this: spend systematically so it can provide other value to your life and work on your tribe/network/community because that’s how you accumulate a different type of wealth.

INTRODUCTION:
Consuming vs investing
* John taking friends out to action movie, buys soda and popcorn
* Jane takes coworkers out to business-related movie that someone mentioned, buys water
* They are both not expecting anything back from their group and just want to have a good time

The book explains (exaggerates for the point) that Jane didn’t just spend on Entertainment, she also contributed to a bunch of things that John didn’t. I can’t say I agree with this completely but here is the impact (p 17):
— health. Water is good for everyone vs (John) sugar makes people bounce off walls
— relationships. Respect what others care about vs (John) don’t see how he didn’t invest in this too since his friends like action movies as well
— career.  Contribution to get involved in matters related to work vs (John) doesn’t impact his career directly (unless you can count on his friends’ network for that future role, which I think is pretty likely too)
— purpose.  Enjoy contributing time to each other because it makes their lives more purposeful vs (John) I can see this applying as well… what if their purpose was to contribute to the laughter in his life??
— provide value. Discussion after the movie so everyone is sharing their ideas vs (John) now everyone is more in-the-know about pop culture

Investing = Spend value on other contexts of your life, outside the original context

True Wealth Discipline

  1. Spend systematically – make every expense count for something more
  2. Increase your value to others – see how you can help others with your skills or knowledge, so they will think of you in future when you need something
  3. Improve your happiness exchange rate (more below)

True Wealth Asset

  1. Adviser Equity – contributing your knowledge to others
  2. Tribe – your community and close friends
  3. Savings – “the money you risk (in the form of investing in yourself… should be in service of something that will improve you, further your purpose, as well as increase your income” Intro, p. 41

Chapter 1: Investing to Increase Your Happiness Exchange Rate

What is the Happiness Exchange Rate (H.E.R)? It’s how much happiness you get from spending on something. Ex: activewear makes me happy because it lets me feel so awesome when I workout and it motivates me to workout. While it may be easy to use this rationale for every sports good purchase, it will eventually not work because I still care about the price tag. Items on sale definitely increase my H.E.R. (Going to Victoria Secret 3x to get a free sports pant with sports bra purchase? Sold.)

happiness exchange rate | winnie's example
happiness exchange rate. winnie loving her VSX gear (bought a set 3x)

The book also takes about the “tragedy of goal setting” in which people think they need to achieve a certain salary or income to be happy, or a certain amount of savings (thus, being miserable saving pennies and not spending on things you would want or experience). See example doodle:

tragedy of goal setting
tragedy of goal setting. the more you need or aspire to, the less happy you become

This leads to “breeding low-quality decisions” when we are faced with inner turmoil about spending money (should vs want), we ask all the wrong questions… and instead should ask (tying back to systematic spending) “How will this purchase affect all of the different contexts in my life? How will this expenditure increase my value to others? How can I use this item to further my underlying agendas for self-improvement, contribution, and awareness?” Ch 1, p. 55

1. Get a discount on circumstances that make you happy – I didn’t really understand this

2. Get good at predicting what makes you happy

3. Enjoy the experiences you’re already having. I cannot agree with this more! People seem to compare their lives to that of others’. Live your life. You don’t need to live vicariously through someone else. You don’t need to have FOMO (fear of missing out). Just do what you like and enjoy it.

4. Treat negative feelings at the root – don’t numb your feelings with retail, alcohol, etc. Figure out what is making you feel bad and fix it!

5. Focus on finding and living your purpose – “What would you gladly supply even if there were no financial compensation at all?” (Ch 1, p. 63)

Chapter 2: Super Skills

A “super skill” is “any skill that has a virtually guaranteed return on investment regardless of your professional circumstances” Ch 2, p. 73. The author lists examples of skills and categorizes the helpfulness in terms of a super skill vs typical skill (which is more technical and silo’ed).

1. Systematic skill building – continue learning things that will enhance other areas of your life
2. The super skills – table on p. 76
3. The market skills – this sounded very similar to super skills, so I will need to reread this one
4. Leverage income beats passive income – instead of wishing cash would rain on you so you can be lazy for the rest of your life, find ways to “be so valuable” that companies cannot get rid of you Ch 2, p. 84

Chapter 3: Invest in Interpersonal Super Skills

1. Leadership and Influence
2. Public Speaking
3. Visioning – “when the future you pain feels as real to people as the present moment, they effortlessly follow you and help you create that future” — I really like how the authors described this. Oftentimes, people and companies have no idea what their vision statement is. Last June, as part of the UWIB Retreat, we talked about the vision for the organization. I totally felt this statement and how we were all trying our best for this organization and could imagine what the future would be! Ch 3, p. 95
4. Teaching
5. Selling – this I could agree with the author because you really need to know who you are trying to sell to and how you can provide value to them! “What works are two things: asking what the person you are trying to sell cares about, and then caring about the answers they give.” Ch 4, p 98
6. Networking and Building Tribe
7. Holding Paradox – this is believing in one thing and acting as if that is not true as well. Kinda weird and this is how the authors explained it: “A superior leader learns how to hold paradox: to believe, at the same time, that the situation is dire and hopeful, meeting employees where they’re at, but also convincing them of the actions they can take that will lead to a brighter future.”


Anyone else read this? What did you think?

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One thought on “the last safe investment

  • Luyba

    This is pretty cool… I am really trying to think about my happiness exchange rate all the time when I make a purchase!!

    All the little things tend to add up after a while and I think hm… did I really want that??

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