How to de-complex your life (Things put into perspective)

Often times people ask me

„How can I get more done within a day?“ or „How can I do more and be more productive?“

My answer always is „do less, so you’ll get everything done. Don’t start things you don’t like“. Have you ever seen a cow farmer adding pigs and camels to his stock? Why would he add more complexity if he can just add some more cows?

There are management methods like „eat the frog“ (First thing in the morning, do what you don’t like) out there.

But why?

It is clear that not everything we do is fun. Everything we do or start comes with responsibilities. Say, you invest in real estate. You have found the right asset and you bought it. Now comes the hard part. Manage all parties, get/finish financing, do the tax right aka finding the right tax advisor so your great deal pays off, manage liquidity, repairs, etc. Not really the fun part. But if it works and pays out it is fun again. Sometimes, unfortunately, years later.

So don’t waste your time browsing for the best time management app or productivity app on the app stores. By the way, the most unused apps on any phone are expensive task managers and private CRMs and other productivity Apps. They are being downloaded and paid for but not used all the time. What a waste of time and money.

Just do less – Start fewer things that come with a „long tail“ of work before they pay off or give you positive feedback.

People need positive feedback all the time. Try to avoid saying nice things to a child. Try to not praise a child for a week or so. The kid will become really angry at everything really soon. Trust me. There are studies about children in Orphanages that haven’t been praised or even touched by their supervisors. Some of them died really early and got depressed.

On the business side of things doing less is also important.

Elon Musks decision to not be directly involved in Hyperloop anymore is a good example. He can’t drive everything at once. He reduces complexity.

Things tend to be overcomplicated to make business. There is a huge business dealing with complexity. Namely business consultants.

Except for political reasons within companies to engage a business consultancy firm, there is not much that justifies 10.000 USD per day in fees to get advise from a business consultant of you do what you are good at. These guys are pure theoretical animals. Not even close to being a businessman. Young professionals from great universities living in a 1 room apartment out of a Samsonite case.

Financial markets and the psychology behind investment decisions can also be seen in the complexity context.

So why are there thousands of ETFs out there? Is there any reason why hundreds of ETFs are mirroring the S&P 500 index performance? It makes no sense but it is understandable because it is a free market. There are fees to make.

For the investor, it is just complex to find the best, or better, cheapest fund if you like to invest in the index.

What trading range will you choose? Day trading? Swing trading on a weekly or monthly basis? Just HODL (hold – HODL is a term within cryptocurrency fans for „holding on“) for years?

A good indicator as to how to position yourself in the market is the VIX Index. In general, it is always better to just HODL if the market volatility is low and to start trading more often up to daily if volatility rate increases. It is not funny but funny enough people (the crowd) always does the opposite – volatility goes up – prices go down – people sell – volatility bottoms out – price starts to increase – people don’t buy but wait until new all-time highs are reached to buy in again.

It is also really helpful to understand how „easy“ it looks when value investors like Warren Buffet are making their investments. A great example was the Goldman preemptive „bailout“ during the financial crisis. Buffet invested a billion into Goldman just to give a signal to the market that Goldman is fine since Berkshire Hathaway is known for their in-depth due diligence before an investment. Buffet got first rank security from Goldman and his risk was nearly zero. His profit was 800 million. Not bad for a safe bet.

Investment decisions in private life aren’t difficult too. Just don’t fall to all the financial advisors out there that aren’t wealthy or even „better off“ than you or everyone else but giving you advice as to where to invest in (and where they make the best commission for themselves). The key and most used reason to talk to those advisors again is the complexity of the financial industry and the thousands of options that are out there.

Have you ever heard of „the one random guy“ in your town who bought the vacant plot next to the old gas station? Now he owns a McDonald’s or rented or sold the plot to Kentucky fried chicken etc. He did an easy thing that isn’t too difficult to understand but hard to master.

The best decisions are the simplest ones. This is common knowledge. But it is hard to sell expensive management courses on top of that.

To make simple decisions, a large amount of knowledge and experience is important and necessary. Simple things require a lot of preparation. Simple designs are hard to make (see Apple products).

So let’s start with you personally. Do you have i.e. summer clothing you haven’t worn last summer? Why do you keep them? Give it away to an old clothes collection. Don’t fill up your wardrobe (and brain) with rubbish. You are only standing in front of a mess and you can’t decide what to wear, so you always wear the same (mostly applicable to men but also women).

It is again complexity that isn’t necessary.

Clean desk policy at work and especially home offices.

Don’t mix private and professional letters on one desk. Same with your digital desktop. Have simply 2 folders on top of your desktop. PRIVATE and BUSINESS. All other folders are within the respective top folder. Done.

There are many other examples, let me know via the comments if you like more of those.

Lately, I ran into a real estate professional from Munich, he has never left the town to make business. He never considered expanding to other cities. Why should he? He is a multi-millionaire and happy. He said „no, my Bavarian accent is heavy and I don’t want to change too much and hire people in other cities etc. No no. It is too complex“

A business consultant would strongly recommend expanding to other cities or countries or to Mars to conquer everything. To take on equity, issue shares, list at exchanges, IPO, ICO, issue bonds, etc.

Yes, they want him to build a complex full of complexity he would never be able to steer himself any longer. And then? All the advisors would get all the fees and he will be potentially left with less time, more stress and an early heart attack.

All the best and a not too complex 2019!

based in munich

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