The myth of how to be successful in the 20th century has ended (it is the 21st century, after all). You know the myth well because it’s made you feel like a bit of a failure.
Go to school and get good grades so you can get into a good college. Work hard and get more good grades so you can get a “good job” (whatever that is). Work that job for most of your life, deferring most enjoyment to two weeks of vacation a year. Scrimp and save so you have enough money for retirement where you can finally enjoy yourself before you die.
This plan hasn’t worked for the past fifteen years. It costs more money than it should to get into a good college so you graduate loaded with debt that you can’t walk away from. That degree doesn’t guarantee you anything, as most grads discover when all they can find are minimum wage jobs, if that. Most “good jobs” suck the life out of you, requiring you to sit at a desk doing as you’re told.
You’ve been programmed for instant gratification so saving enough money for retirement is a near impossibility. You’re told that buying lots of impressive toys will make you happy so you accumulate more and more, feeling unhappier after each purchase. And all this buying leaves you further in the hole of debt that you can’t seem to extricate yourself from.
There doesn’t seem to be a way out.
Fortunately, there is. But you have to forget all the stories that you’ve been told all your life. You must change your beliefs about what’s possible in life.
Change Your Beliefs, Change Your Life
I’m reading more books these days about how things have changed and what we can do about it to make our lives better.
Humans Are Underrated, which I reviewed HERE, dove deeply into why the things you’ve been taught in school will get you nowhere in your jobs and businesses. The technical skills you learned have been automated and outsourced. It’s the human skills of empathy, storytelling, creativity and collaboration that will help you most.
The core of The Last Safe Investment is to live intentionally. Figure out what you want the theme of your life to be, get clear on your values and make every choice with those things in mind.
The book creates a plan (the Self-Amplifying Financial Ecosystem – the SAFE plan) for the development of True Wealth which involves developing three disciplines: spend systemically, increase your value to others and increase your Happiness Exchange Rate. These disciplines will develop your three assets: adviser equity, tribe and savings. The more you practice all of these things, the more your True Wealth grows.
The SAFE Plan
The concept of Systemic Spending involves looking at every dollar you spend based on how it will impact all areas of your life: health, relationships, money, culture, purpose, capability to provide value. Every dollar spent is an investment in you. Invest wisely.
Your Happiness Exchange Rate is the happiness you derive from every dollar you spend or invest. “Any time or money you spend that allows you to derive more happiness for less money and effort in the future is an investment in your Happiness Exchange Rate. The payoff, in terms of increased happiness (internal wealth) and decreased expenses (external wealth), can be dramatic.”
Combining the Happiness Exchange Rate with Systemic Spending, the authors show why going after financial goals is almost always counterproductive. Goals require making a big assumption that the money you’re targeting ($1 million in the bank, income of $100,000 per year, etc.) will bring you the emotions you seek – usually happiness.
Although most people act otherwise, everyone, in their heart, knows that money doesn’t buy happiness. I’ve known multi-millionaires who are chronically unhappy, thinking that another million dollars will prove to the world that they’re enough.
Unfortunately, scrimping and saving or working your butt off to get the money of your goal tends to deliver less happiness than you currently have. The process is painful and the result usually doesn’t deliver the feelings that you had hoped for.
Systemic Spending allows you to be mindful of how each dollar contributes to your Happiness Exchange Rate today and in the future. The SAFE plan requires that you focus on being happy while you’re building your savings.
Only spend (invest in yourself) if it makes you genuinely happy or improves multiple areas of your life. This is not retail therapy to cover up the fact that you’re not happy. The SAFE plan would have you invest in true therapy so you could figure out how to be happy with yourself. Then you wouldn’t need retail therapy (or any other costly addiction). By investing in therapy, you could save the money you used to spend on addictions or other forms of covering up your unhappiness.
Instead of following the traditional method of setting goals and deferring happiness, the book’s SAFE plan maximizes your happiness along the way without requiring you to meet a target that you actually have little control over.
Targets and goals are expectations. Unmet expectations are the root of all negative emotions.
Hone Your Super Skills
The book acknowledges that retirement is a myth. The authors show you how to create work you love so that you likely won’t want to stop doing it when you get older. Or, if you do feel like slowing down, it offers a plan to create assets that will continue to pay you later in life (we’re not referring to traditional investments here).
The 20th century myth was all about money – earning it, getting it, investing it, spending it and saving it. The story convinced you that money was of prime importance, above all else. But that’s never been true. You know it in your bones, but societal programming tries to convince your head, your monkey mind, otherwise.
True Wealth comes from increasing your value to other people. Ultimately, that’s what people pay for: adding value to their lives. Fortunately, this isn’t an asset that someone can take from you. Its value isn’t tied to some market or forces outside of your control. As long as you continue to grow, learn and share your talents and strengths, your True Wealth will continue to grow.
How do you increase your value to other people? By developing and honing your Super Skills. These fall into four categories: interpersonal, creative, technical and physical. The book covers specific skills in each category and how to improve them.
- Interpersonal includes leadership & influence, public speaking, visioning, teaching, selling, networking & building tribe and holding paradox.
- Creative includes context importing, improvisation, writing, copywriting, reading, storytelling and design.
- Technical includes mental models, financial models, systems thinking, web development and direct marketing.
- Physical includes longevity; mental focus; clean, healthy appearance; clean, organized environment; healthy relationship with alcohol and drugs and healthy relationship with your sexuality.
Other People Are Key
How do you use your Super Skills for good? It’s called “advisor equity” and comes in many forms. It’s anything that involves you helping other people. That could be a job, consulting, helping out a friend, making an introduction, being a mentor or any other circumstance where you help someone.
Sometimes you’re paid with money. Other times it’s equity in a company or goodwill among friends. It could also take the form of access to things you otherwise wouldn’t have access to (someone’s vacation home or boat or access to an exclusive group or event).
All of these forms of “payment” add to your overall happiness in life. They all count.
One of the best ways to develop significant advisor equity is among your tribe. A tribe is a group of people with between 15 and 150 members where everyone knows everyone, and everyone shares common values.
A tribe is unique because it’s not just a group coalescing under a common interest (although it could be). The members share common values. Interests can vary, but values run deep. Everyone in the tribe sees the world in a similar way, and contribution is usually one of those shared values.
A tribe is not just a bunch of friends. The power of the tribe is in its network capacity. When everyone knows everyone, it’s easier for word to spread of someone’s beneficial advisor equity. More importantly, everyone is a member of the tribe to support each other and the tribe. If one person needs help, everyone is there for them with no strings attached because everyone knows that the person in need will be there for them, should they need it.
Having great relationships with people you know, like and trust has also been proven to be a leading cause in longevity. Happy people in a supportive community live longer, healthier lives.
Create Your Blueprint
The authors of the book have lived the life they write about for the past ten years along with many of their friends. They’ve lived the success of the model. Some have tons of money while others have little. But they’re all happy living the lives they’ve chosen.
My husband and I are using the concepts of The Last Safe Investment as the blueprint for our lives going forward. It’s that powerful and important.
I receive many comments from readers who are unhappy and don’t know what to do with their lives. Combine the concepts from The Last Safe Investment with a couple of my other favorite books, Choose Yourself, which I reviewed HERE, and the Choose Yourself Guide to Wealth, and you can create your own blueprint for your version of a happy, abundant life.
It takes work. No one is going to hand you anything on a silver platter. But the payoffs from this plan don’t take much time to realize (two to five years vs. twenty or more from the old myths). The more you put into the SAFE plan, the faster the results will appear. And it’s so worth it.
Michael Ellsberg is the author of Education of Millionaires: Everything You Won’t Learn in College About How to Be Successful. He lives in San Francisco. You can read more at www.ellsberg.com.