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Why your money has to work harder

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You don’t have a choice. Educate or die.

I’m surprised there aren’t more people in financial panic.

I think it probably comes down to financial literacy. Maybe people just don’t realise how dire their situation is.

On the first front, the income side of the equation isn’t too flash.

The average individual full-time salary is $82,000 pa.

That doesn’t sound too bad, but that number hides a lot of ugliness.

First it’s the average. So it means half of Australia’s income is above that line, and half below.

But we’re not interested in income. We’re interested in people. And so when we look at the median salary (where half the people earn more and half the people earn less), that’s just $55,000 pa.

So half the Australians in full-time work are earning less than $55,000 a year.

But wait, it gets worse still. Because that’s looking at full-time work, and we know that full-time work is dying. There’s been a trend shift away from full-time work, towards part-time and particularly temporary employment.

So the actual reality for the majority (51%) of Australians is probably much worse.

I don’t know about you, but those numbers freak me out a little.

Next, consider how much the average Australian has accumulated in their super. The most recent figures on superannuation from the ABS for 2013-14, show that at retirement age, men have an average balance of $322,000 compared to $180,000 for women.

There’s not a lot of fat in those numbers, but again, what we’re saying about average and median applies here too.

The representative Aussie probably has much less than that!

So income is sh!tty, savings is crappy, but at least stuff is getting cheaper, right?

Well, no, actually. Inflation is low and contained, but it still exists. Prices are still rising.

And the low headline figure tends to disguise where the inflation actually is. So while consumer electronics are getting cheaper, housing costs (rent and mortgages) are getting more expensive.

As one economist joked, “The prices on the stuff you need are going up, while the prices on the stuff you don’t need are going down.”

And the net effect of that is that Real Disposable Income is failing to keep pace with the cost of living.

And more and more, as a society, we’re relying on credit to fill the gap.

So put it all together and you have a pretty alarming picture. You have a vision of the majority of society failing to earn enough or save enough to keep pace with the rising cost of living.

The necessarily means growing credit or falling living standards.

And who wants that? And who wants that after 45 years in the workforce?

But with wages stuck in the gutter, there’s no way to earn yourself out of this mess.

Wages are going nowhere, and the increasingly temporary nature of work means that they’re going to stay going nowhere.

To me, the only way out is through leverage. It’s through putting your money to work.

We all do that. Even if you just let your super sit in your industry fund, it’s still working for you.

But could you be getting more out of your money?

This is the question you’ve got to ask yourself and keep asking yourself.

And the key here is knowledge. As the carnage playing out in the financial planning industry shows us, it’s a risky business trusting your fortune and future to someone else.

Far better to skill-up and educate yourself. It’s not that hard. Look at me. I couldn’t even get through high-school on my first crack.

But now I have to knowledge and skills to command my wealth with confidence.

Seriously, do you have another choice?

Because time is running out.

NO B.S. FRIDAY: Time to Tap the Power of, “No!”

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Life is what you are willing to accept.

Life is not what you achieved. It’s not what you went out and got.

It’s what you were willing to accept.

(Can some one stick that quote over a picture of some dolphins climbing a mountain at sunset or some crap like that for me? I want to get into motivational posters.)

Life is what you are willing to accept.

This idea struck me when I was in the shower, and it stopped me in my tracks. (I have a treadmill shower, to stay fit.)

I focus a lot on achievement. On making things happen. And that really is important. It’s a key element in the make-up of your life.

But in the balance of things, it’s small fry. If you were to break your life down in to what you went out and got, and what came to you and you received, what would the break down be?

90% : 10%?

Or think about it this way. How many things are you working on achieving right now? Maybe the most productive people might have a list of 20 things, maybe 50 for the uber-driven.

But how many ‘things’ are there in life? It’s almost infinite. Who sits next to you on the tram? What is the weather is doing? Do they have any bananas today?

So maybe a ratio of 9:1 is optimistic. Maybe its more like infinity : 50.

Ok, it’s silly trying to put number on it. The only want to make the point that a lot of what we have in life is what comes to us.

In that sense then, there is an important and overlooked leverage point for creating the life you want. What you are willing to receive.

For example, if you are willing to sit next to stinky drunken hobos on the train, you’re life will contain that flavour.

However, if you are not willing to accept that, if you get up and change seats whenever that happens, your life will not have that flavour.

There is an important filter here.

And I would say that ‘what you are willing to accept’ is probably the key way to understand your life.

Are you willing to accept verbal abuse from in-laws? Are you willing to accept mundane job tasks? Are you willing to accept living in a hovel above a train line? Are you willing to accept driving a 30 year old Datsun with broken indicators?

This is the power of no.

If you say no to these things, then something has to change.

If you say to the universe, no, I’m not willing to accept a circle of friends always trying to bring me down, then something has to change. It has to.

Now of course this has the element of a gamble to it. If you say, no, I’m not willing to accept a boyfriend who is suffocatingly protective, then you do open the way for the universe to give you the reality of ‘no boyfriend’.

That is a possibility.

But if you can accept that, then you can clear the space for the universe to give you something different.

More often than not, in my experience, the universe tends to be embarrassingly generous. The probability of no boyfriend is much lower than the probability of better boyfriend.

(Gary please stop calling me. Todd and I are happy.)

Professional scrabble players know this. (Yes, they exist). They ‘chuck in’ a huge number of times – much more often than amateur players.

They know that you don’t have to be stuck with a hand of shitty vowels. That’s hard to work with. Much better to clear the decks, trust fate, and try again.

Ok, I’m slipping off point. The central thing here is that to create the life we want, we have to be strong. We have to be really strong in what we’re willing to accept, and really strong in saying no when we need to.

If you get clear on this – if you get really strong on your no, it will have a huge impact on your life.

The Secret to Win/Win

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Putting win-win in its proper place for full power

“Why do you think he’s going to go for vendor finance?”

“Oh, well, you know. He gets to help me out. There’s a feel good factor. It’s win-win.”

This idea of win-win is deep in the collective consciousness now. I don’t know exactly who came up with it, but I’m pretty sure it was Stephen Covey in The 7 Habits of Highly Effective People that made it famous.

But like a lot of things on the way into popular culture, the message has been diluted, distorted and bastardised.

Like my mate. ‘Win-Win’ is not a persuasive tool. “C’mon mate. Give me some money. It’s win-win.”

It’s not something you apply after the fact to justify a decision or bring someone around to it.

It’s a mindset. It’s a way of coming up with solutions. Not a method for selling them.

I see a lot of people get this wrong. Even if their intentions are more genuine that my mate’s.

They decide on what they want, and then look for a way ‘sell the benefits’. And in that moment, they’re not trying to deceive the other party. They’re genuinely looking for the things in the deal that are good for the counter-party.

But this isn’t where you apply win-win.

At its heart, win-win asks you to step into the shoes of the other. Before you’ve decided what you want, empty your agendas and look at the situation through the lens of the other person’s interests.

In that way it’s an act of empathy. It’s about being able to connect with and understand the drives and motivations of another.

It’s a very feely process.

But what happens if you can do that is that you open the space right up, and open the door to many possible solutions. You get to see where your interests and their interests intersect. You get to get creative.

That doesn’t happen if you’ve already decided what needs to happen and are just looking for a way to sell it.

This mindset approach to win-win also puts you in a position of strength. If you have taken the time to understand what’s driving another person, you’ll do much better in negotiations. You’ll be able to anticipate where directions will go, and sell the benefits of particular outcomes much more effectively.

So remember this, win-win is first and foremost an act of empathy.

The challenge is not losing sight of your own interests by focusing on the needs of another. This is another important life skill, but we’ll leave that for later.

Who would have thought? So much personal development on the road to becoming a titan of business.

NO B.S. FRIDAY: My Easy Solution To Your Next Challenge.

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One question to ask when you meet any challenge.

I was at a wedding the other day, and I got stuck looking after my niece’s 3y.o girl, while she went off with the bridal party to get photos done.

It’s been a while since I’ve had to entertain a toddler. I was actually a little nervous.

“Tell me a knock-knock joke.”

Oh gawd. Knock knock jokes? I haven’t thought about them in years.

Ummm… Ok. Knock knock.

who’s there?

Bob.

Bob who?

Bob down I can’t see the television.

Ha hahahahaha. Tell me another one.

Oh. Um… Knock knock.

Who’s there?

Amanda.

Amanda who?

A man to fix the television.

Hahahahaha. Tell me another one….

Crikey!

This went on for ages – or what felt like ages. And I was seriously bending my head trying to remember knock knock jokes, or even invent them in my mind on the fly.

Eventually her mother came back. What have you been doing?

Telling knock knock jokes.

Oh yeah, she’s obsessed with them right now.

Yeah, I was struggling to come up with the goods. It was a lot of pressure.

Oh really? You shouldn’t have bothered. She doesn’t get them.

Hey?

Watch. Knock Knock

Who’s there.

Rabbits have

Rabbits have who

Rabbits have fluffy tails on their bum.

Hahahahahahaha.

Yeah, she doesn’t get that the first bit has to be a name or anything. I don’t actually know what she finds funny. It’s just breaking up sentences in funny ways I guess.

I felt a bit silly.

And it’s not that I’m in a tux telling knock knock jokes to a three year old. It’s that I forgot one of my own golden rules – always check to make sure that the easiest road is closed first.

We have this idea in life that nothing comes for nothing. If you want something, you have to work for it.

Go to school, you won’t get results unless you put in the work. Get a job, you want get a raise unless you put in the work.

Play a game, get on a computer – you won’t get the points unless you do the hard yards.

This is a cultural mindset. It’s useful, because sometimes things do require hard work, so it’s good to be ready to put the shoulder in when you need to.

However, it’s a kind of human idea, and maybe a modern one.

I mean, ask a bird if he ever gets something for nothing.

He’d say, all the time. I wander around the garden, and there’s worms and bugs all over the place. I just go over and eat them.

Or ask the worms. Do I have to work? Nah, I just wriggle about the place and eat whatever I come across. It’s pretty easy really.

And so I’ve found it useful to remember that the great majority of things in existence enjoying something for nothing all the time.

It’s only humans who have invented a concept of work – of having to push really hard to achieve great things.

And so with that in mind, I try to remember that whenever I meet a challenge, there might actually be an easy way through it.

For a long time, when I met a challenge, my first instinct was to start steeling my spirit. C’mon Jon. You’ve got this. Put your head down and push on through. You can do it.

But I was doing that without checking whether the challenge was actually a challenge at all – without making sure that there wasn’t an easy option available to me already.

Because if you’re not looking for it, you often won’t see it.

So take the knock knock incident. If I had stopped for a moment and thought, is there an easy way out here? I might have then checked whether that little girl really understood to complex nuances of knock-knock jokes, or whether she just wanted a bit of adult attention.

But because I didn’t do that, and because I was already steeling my spirit for a challenge, I made the whole encounter 100 times harder than it ever needed to be.

I’ve found that this sort of thing comes up in life a lot. A great many challenges in life actually have really simple solutions if we take the time to look for them.

It’s the taking the time that matters.

So it’s great if you have that capacity to steel your spirit, harden up, push on through.

That will take you a long way in life.

But recognise that that’s not what’s required every time.

Sometime, there’s a simple solution right under your nose.

So always ask yourself, ‘is there an easy solution here?’

Check yourself before you wreck yourself.

NO B.S. FRIDAY: Love – the most unrealistic expectation of all

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Valentines day reminds me of how good we are at burdening ourselves with unrealistic expectations

I saw something cute on Facebook this week. It was someone talking about being a working mother.

She said, “Working mothers are expected to work like they don't have children, and mother like they don't have a job.”

Too true.

If it's one thing we've become very skilled at in the west, it's placing totally unrealistic expectations on ourselves

… and then beating ourselves up with a spiky stick when we don't live up to our own ridiculous ideals.

How much misery is this causing us right now? I'm not just talking about moody teenagers – at least they have the luxury of imagining that their future might be different.

I'm talking about everybody.

We should be cut like an Olympic athlete (no matter how old we are), as creative as cocaine-happy graphic designer, as up-to-date as a news anchor, as enlightened as a Himalayan man with no pants, as compassionate as a nun but as staunch as Donald Trump…

Ok, maybe I'm being a little specific here. Perhaps some of these are just me. But you get the point, and you probably have your own version of this drama playing out in your own head.

Unless we're careful, we tend to ask too much of ourselves, and then make ourselves miserable trying to keep up. It's a contemporary epidemic.

And love is the worst.

As I wander past the post Valentine's Day clutter in the dumpster outside my office – wilting roses and teddy bears and all that guff…

(seriously, ladies, I'm married. To the fellah who dropped off the golf clubs… thanks. They're very nicely weighted.)

… I'm reminded at just how much industry and endeavour is geared up into making us feel totally inadequate about our relationships.

And I feel like I'm seeing a shift.

We used to worry about whether our partner was ‘the one'. Taking our cue from 90s romantic comedies, we felt that our lover should knock us off our feet, and keep us there on the floor. If we tried to get up, they should knock us down again. And again.

Even at 5.30 in the morning, after you've both been up feeding the baby all through the night, she's got breast milk stains all down her singlet, he doesn't even know where his pants are… even in that moment, the sheer attractive power of your immutable soul bond should knock you on your arse.

Love is not being able to get up off the floor. Ever.

This is the fairy-tale and it's incredibly seductive.

It's starting to lose its grip on us though, slowly but surely.

At a conscious level (if not wholeheartedly) we can see that the fairy-tale is unrealistic BS. We get it.

That's nice.

However, I see it being replaced with fluffy personal development mantras. About being, self-sufficient, independent, complete on my own.

That we should love our partner like we love our I-phone. We deeply appreciate its sleek design functionality, and would be proper pissed if someone stole it, but ultimately, they're easily replaceable.

And you know, it is good to be independent. It's good if your own sense of self worth has nothing to do with whether there's someone on your arm or not.

However, a relationship should not be a theatre for the expression of independence.

That's not what relationships are about.

To me, relationships are a shared journey – towards shared and independent goals. To make it work, you need to think of yourself as a team.

And I mean that in a very sporting sense. You have to work as a team. You have to share your vision of what life is going to be about, and you have to work cooperatively, picking up slack and supporting each other wherever possible.

Great relationships work like well-oiled teams. Each person in the pair is independent and autonomous, but they understand their place and their role in the team, without saying.

It's not a theatre for expressing independence. There's no “I” in “Get with the program, dickhead.”

And what we don't realise is that both of these misguided notions of love – the co-dependent and the independent – both of these have been driven by the same merciless machine that makes us all miserable.

Our ancients never put so much stress on their relationships. Why?

There's probably a myriad of reasons, but I think on the whole, they were just generally more secure. They didn't need their relationship, or their relationship to the relationship, to make themselves feel ok about themselves.

And that's because advertising.

The marketing industry has totally inflamed our sensitivities to comparative worth. It's human to compare yourself to others. But only modern humans compare themselves to photo-shopped waifs on massive billboards…

… and to the centre half forward for North Melbourne, and to Richard Branson, and to the Dalia Lama….

And so we crave love because we want to know that we're ok. That we have a place within it all.

But love was never meant to carry this burden. Love was only ever meant to unite us in a hormone-driven dance of horny pants, and then transmute gently into a content shared-sense of companionship.

(That'll never be a pop song, but I think it's the reality of it.)

Asking anything more of love – and especially asking it to make you feel ok about yourself, is just asking too much.

You've got to find the right donkey for the right burdens.

How do we get back to the old ways of thinking about love? Do we want to?

How do we cultivate a greater sense of ‘team' in all our relationships?

How do we separate love from the need to feel ok about ourselves?

JG

NO B.S. FRIDAY: The easiest and hardest roads to wealth

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You might be confusing struggle with virtue

Want to know the easiest way to be wealthy?

And I'm using ‘wealthy' as a bit of click bait here. I'm talking about anything you want to call into your life – happiness, greatness, sexiness, whatever.

(Fun fact: If I talk about wealth, people read. If I talk about happiness, no one listens. That's ok. Wealth is always the first stepping stone. I'm not judging.)

Ok, so there are two roads available to you if you want to call something into your life.

The first is to go “blockage-busting”. We go and get all Mario and Luigi and get into our plumbing to see why things aren't flowing.

Why aren't I wealthy? Well, I had abusive parents so I don't value myself, and so I don't expect others to value me either.

I've been conditioned to believe that money is evil.

I'm afraid to test my own potential, so I cling to excuses I can hide behind, like never having the money to do what I wanted to do.

The bloke on the $100 note looks like my Father.

Once we discover what these blockages are (and there's a lot of work just to get this far), then we can start trying to break them down. We can get our hands dirty with affirmations, visualisations, past-life regression therapies, whatever.

If we can deconstruct these blockages, replace them with positive beliefs, things start flowing again. Money comes.

This method works, but man, I'm getting tired just thinking about.

Is there an alternative?

I would say a better way to start is to drop in and connect with the part of you that wants to be wealthy (or you know, whatever.)

You have parts that don't want to be wealthy, sure. You don't need to change that. All you need to know is that within you, there is a part of you that wants to be wealthy.

So drop in and connect with that. Why do you want to be wealthy?

So I can help my friends and family.

So I can achieve beautiful things.

Because I am a better and more loving person when I am financially secure.

Whatever it is, align yourself with that part of you that wants to be wealthy. Align your energies there.

Feel now how you are not in opposition any more. You are not fighting against something. Rather, you are siding with something – in collaboration.

Align yourself with the part of you that wants to be wealthy. Give it energy. Drop in with it everyday. Connect with what you will achieve and do with the money. Give yourself a taste for the joy and happiness that it entails.

In time, and with relatively little (but consistent!) effort, it will become a force to be reckoned with.

It will start to shape your life.

You will still have blockages, just as you will still have a part of you that doesn't want to be wealthy.

But your life changes simply by changing the power relationship between these two competing forces.

And since the human must always be in balance, energising and empowering the part of yourself that wants to be wealthy may itself call change into your life. If you have limiting beliefs, they may just evaporate as less energy is given to them, and more to their opposites.

The point I want to make is that both strategies work. When you consciously change your internal energetic make-up, it changes your life.

However, working with alignment, rather than resistance, is just much more effective. It's quicker and you get more bang for your buck.

Not only that, it's more fun. It's more fun to dream about how you're going to spend all this money than it is trying to make space in your heart for your great grandmother's tears as some hippy smudges your chakras with patchouli.

That work is valuable in its own right. The only point I want to make is that we're also conditioned to believe that the hardest path is the most virtuous. Therefore, if I want to be wealthy, I need to work for it.

It's not true. It is not the only way.

And it's not the best way.

Alignment is better than resistance.

What do you want to call into your life?

Are you working with alignment or resistance? Which one gets more energy?

Are you ready to get what you want without having to work for it? Really?

What this year will be about?

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Let’s step back from the numbers for a bit. What is this year going to be about?

Welcome to the new year everybody.

It’s a pleasure to have you with us. I’m going to do my best to keep you one step ahead of the property market, as I’ve done for the past 4 years. I’m going to try and help you triangulate the keys to your own greatness, as I’ve done with the NoBS blogs for the past three years.

And this year, if you’re keen, I’m going to try and help you navigate the exciting Wild West of the crypto market.

So with this first blog of the new year, I wanted to step back and get a view of the bigger picture. Try and finger the key theme that’s going to hang all these threads together.

Less data, more philosophy.

To do that, I need to introduce you to Francois.

Francois is an old man who owns three VHS recorders.

I don’t actually know him. I’m mates with his son. It was son who told me the story.

At some point around the turn of the millennium, François decided that he was done keeping up with technology. He’d seen a lot of change in his lifetime already. So when the writing was on the wall for VHS, when it was clear that the whole world was moving to DVD, and then beyond, François chose something else.

François chose to stay behind.

“Let the world have their DVDs. I have VHS. I like it. I know how it works. It will do me fine.”

And so when the electronic shops had their final clearance sales of VHS players, François bought three, figuring that three should be enough to see out his days.

To those of us living in the high-definition Netflix universe, François’ decision seems ridiculous. But François doesn’t know any different, so he doesn’t care.

And in a way I can get where he’s coming from. It’s hard work keeping up with the times. And it’s only getting harder as the pace of change accelerates.

So in a way I can respect a decision to just hop off the train. Happiness is relative. François is happy in his Netflix ignorance, so good on him.

So right now, at the start of 2018, it feels to me like we’re at a train station, with the train just about to depart. You’ve got a choice. Do you stay on it, or just hop off.

I’ll respect you either way. Either choice is valid.

2018 will be a year like no other. (Every year is different, but there’s something in the air around 2018).

The investing universe is changing. The most obvious face of that is the crypto-revolution.

It feels to me like Godzilla is slowing emerging from the ocean, and the whole world is in kerfuffle because we’ve caught sight of his nostrils.

But there’s a lot more yet to come.

And this is already impacting all other asset classes. They say people are leaving gold for the safe harbour of Bitcoin (though there isn’t anypart of any of that story that makes any sense to me.)

I think we’ll see it in property too. For a few years we’ve seen a lot of the world’s rogue cash – cash set free by the incredibly easy monetary policy settings around the world – we’ve seen that rogue cash find its way into Australian property.

And for a while there, Aussie property, with the promise of security AND double digit returns was incredibly enticing.

Cyptos don’t give you security but they do give you the promise of triple digit returns!

To rogue international money, that’s going to be an attractive offer.

So the Australian property market is changing too. I think the strategies that worked in recent years might need a bit of an overhaul.

And that’s all before we try to somehow account for the x-factor of exponential technology. The tech landscape is in rapid transition right now. (I mean, they added 4 new elements to the periodic table just in 2017!)

Exponential tech is going to be throwing up all sorts of surprises, and some of those are going to be incredibly profitable.

So this is the reality we have in 2018 – Flux. Everything is in flux. Every asset class, every strategy, even our technological reality.

Staying ahead of this wave will be work. You will have to paddle hard (or read the blogs of someone else who is paddling hard.) You will need to keep an open and mind and be flexible with your game plan.

Or, you can be like François. You can say, you know what, I’ve done pretty well. I get stocks and I get buy and hold property. I’m good. You guys go on ahead. I’m just going to stay here.

And that is totally valid. If you’re in a financial position where you can just do that, why not? Take it easy. You’ve earnt it.

If not – if you want to get on this wave and maybe make some incredible money this year, then I need you to swim hard. There’s a lot to get on top of. There’s a lot to learn.

The only thing I would say is this. It’s easier to stay on the train than it is to get back on later.

If you’re not down with the basics of crypto1.0, crypto 2.0 will be confusing. Crypto 7.0 (which is maybe only 5-10 years down the track) will be totally baffling.

So that’s what I reckon this year will be about. We’ll need to work hard to stay ahead of the curve, but if we can, we could make some serious money.

Like, the kind of returns that we’ve never seen before, or even dreamed was possible.

I’m serious about that. This year could be huge.

So come along for the ride. It’ll be a wild one.

Toot toot!

NO B.S. FRIDAY: Maybe techmageddon isn’t inevitable..?

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It’s easy to get overwhelmed, but it’s hard to get a unbiased view of history.

Question: How many years does Western Civilisation have left in it?

10? 20? 100?

Answer: “There are forces that want you to believe that end of civilisation is inevitable.”

I’ve been talking with Dymphna Boholt. I’m helping her with the marketing of her “Next 10” event. Dymphna has one of those minds that is always hungry, and that hunger and curiosity is going to be on full display at this one.

She’s been doing a deep dive into what the future looks like, particular the future of real estate. And seriously? The stuff she’s found is mind blowing.

And its not so much the stuff that’s happening 10, 20 years down the track. It’s the stuff that’s happening right now.

We are living in the future.

So as I was saying last week, I went into a bit of a dark worm-hole looking into artificial intelligence. The future was looking a little scary from where I was, curled up in a foetal position clutching a McMuffin.

So I said, “So what do you think Dymphna? End of the day, are we going to be alright?”

Her answered surprised me:

“There are forces that want you to believe that end of civilisation is inevitable.”

What she’s saying is that the idea that civilisation is on the brink of collapse serves particular agendas.

Namely, if you’re agenda is introduce some radical solutions, you need a radical crisis to justify it. If you want people to swallow something as out there as fascism, then they need to be pretty worried about the future.

In fact, they need to be so worried that they can’t see any possible way through the malaise with the current tool set. They need to believe that the most probable scenario going forward is the end of civilisation as they know it.

But how many civilisations have collapsed in a burning pile of poo? And how many have slowly petered out, or been peacefully absorbed by the paradigm that followed?

I don’t actually know the answer to that, but I’m pretty sure no one else does either. And if we focus on the fall of the Roman empire, as the only data point in a uselessly small sample, our conclusions are going to be pretty biased.

I mean take the British Empire.

We can say that we’re definitely past the peak on that one. But has it been a disaster? Hardly (on the scale of human disasters). By and large it’s been a fairly peaceful transition to the new story.

So why are we so convinced that the only way empires go down is in flames? Why are we so convinced that the only way change can happen is in massive violent leaps?

The wane of the British Empire. The end of French colonialism in Asia. The fall of the Berlin Wall. The break up of the USSR. Sydney teams joining the VFL.

The evidence for the ‘messy transition’ theory is all around us, but we still believe that the mostly likely way forward involves queues for food and armed mobs on the streets.

But this idea serves particular agendas and so it sticks around.

“If you don’t vote for me, your children will be hunting for rats in the ruins of the state library.”

And so we stand at a similar cross-roads, with some mind-blowing tech already rolling off the production line.

There are and will be forces that want us to believe that the only way the human species is going to survive this radical upheaval is with the strong hand of a strong leader guiding the way.

We’re primed to accept this at face value. We’re not conditioned to say, hang on, the evidence overwhelming says that humans are exceptionally good at muddling through. Are things really that bad?

But this is the attitude that the times demand.

We need to be optimistic about the new tech on offer, and confident that humans will get messy, but ultimately muddle through… as we always seem to do.

And so at the end of the day, Dymphna is optimistic and hopeful about the future on offer. And she’s not buying the idea that collapse is inevitable.

And when you see the stuff she’s come up with, I think you’ll agree.

Are you coming to the Next10 event? It will all make a lot more sense if you do.

Secure Your Next 10 Ticket Here

Part 3: Bitcoin is Bitshoit!

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Last week I told you why Bitcoin could be awesome. This week I tell you why it could be BS.

Ok, so we’ve had a look at the Basics of Bitcoin, and I’ve given you the arguments for.

Now let’s look at the arguments against. I’m going to divide this into two sections. First I’ll look at the block-chain in general, and then I’ll have a look at crypto currencies and Bitcoin in particular.

The Block-Chain
Disruptive technologies are all the rage these days. Like the way Uber disrupted the taxi market, or the way AirBnB disrupted hotels. It’s very buzzy.

And people point to block-chain as the next big disruptive technology. The most recent example of anything like it was the birth of the internet, they tell us.

And I am loving what block-chain has to offer, but when I look into it, it looks less like a disruptive technology and more like a “foundational technology”.

So email disrupted regular mail. The internet was the foundation for email.

But even that’s not entirely right. The block chain is more like TCP/IP (transmission control protocol/internet protocol), which created the shared language that made the internet possible.

Before that, computers had to connect to each other directly (or network to network). TCP/IP enabled all participants to join together in the world wide web, without the need for a central exchange.

It was ‘distributed’, and that’s why it’s a better metaphor for block-chain I think.

But TCP/IP launched in 1972. It would then be over 20 years before the first commercially viable internet-based companies launched.

So how long do we have to wait before the commercial promise of the block-chain is realised?

What’s more, you couldn’t monetise TCP/IP itself. You couldn’t make money of it. It was a common good. It was owned by everyone, it benefited everyone. That was precisely the point.

Same story with the block-chain. It’s set to make a whole bunch of amazing things commercially viable. But it doesn’t mean that the block-chain itself, or the first generation of block-chain thingys, are going to make money.

The other thing I’d say about the block-chain is that while it contains seeds for a social revolution, that revolution will take many, many years to materialise.

So say, you have smart-contracts based in the block-chain. That contract says that I owe you $5. There indisputable proof that it’s true. We know the block hasn’t been tampered with. It clearly says that I owe you the money.

But I refuse to pay.

So what do you do?

Contracts are useless unless they can be enforced. For that, you need some wholesaler of violence – historically the government.

But then you might say, but it’s a trust system. If you diddle someone, it’s recorded. You get something like an e-bay profile score. That disincentives cheating.

But hang on. I thought anonymity was one of the great selling points for the block-chain? And what’s to stop me from setting up a string of fraudulent identities?

A huge amount of social infrastructure goes into simply proving to others that we are who we say we are, so we can enter into contracts with each other.

If you take governments out of the equation, you take all this social infrastructure with them.

Ultimately, we may find better way to do all this, and block-chain may be a start, but it’s far from the final word.

Bitcoin
The first point with crypto-currencies is that money is power. If you think that governments are just going to sit back and hand all that power over to the people, I think you’re a dreamer.

But, you might say, “It’s too late. The block belongs to everyone. They can’t control it now.”

I think it is probably true that they can’t kill it, but I don’t imagine they’d want to. They’d either side-line it or co-opt it. Currently, neither option strikes me as particularly hard.

(China recently shut down all its crypto-exchanges and went and seized all their records. So much for anonymity.)

Of course there are ways round this. But if your solution involves every person in the global economy running their own virtual private network and putting time and energy into staying a step or two ahead of the crypto-police, again I think you’re dreaming.

The other big draw-back for cryptos is that transactions are not free. People talk like they are because, there’s no central fee processor (like PayPal), but there’s still a cost that needs to be borne.

Currently the processing that drives the Bitcoin network is driven by miners. They receive rewards in the way of coins, and fees from individuals who want to see their transactions moved to the front of the cue.

And currently, that whole system is being driven by five to ten companies, according to Business Insider.

That’s not sounding that awesome.

It’s not immediately evident to me that a global financial network organised by a couple of hundred nations is inferior to a financial network powered by five to ten companies.

Especially if those five to ten companies have an ability to control fees…

But the point is, unless transactions are free, there is a cost that must be borne. There is a price that must be paid, and a fee that must be collected.

Money is concentrating somewhere, and with it, power.

This might sort itself out in time, but the current generations of cryptos all seem burdened with this flaw to me.

The final point is about Bitcoin in particular.

Have a read of this statement from Amazon’s 1997 letter to shareholders:

“We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.”

Of course they did. These were THE players in the internet space in 1997. Netscape was the first personal web browser. These companies dominated the internet just as it began to launch.

And how many still exist?

Maybe Yahoo, kind of, but apart from that, they’re all dead.

Now if block-chain is the next internet, as people like to claim, is Bitcoin the next Netscape?

Even ten years is a long time in business these days. If you’re betting on Bitcoin, you’re betting that no other player comes along and cuts bitcoins turf in the next.. what? 30 years?

That’s quite a gamble.

The way I see it, Bitcoin is very vulnerable to disruption. Its cost structures seem high, so there’s always the potential for undercutting.

Or, let’s say Amazon – the largest retailer in the world – launches its own coin – the Amazonian. At the time it says that you can only buy things with Amazonians but it will accept any Amazonians from anywhere.

(Remember when governments launched money in the past, they decreed that all taxes had to be paid in that money, to enforce widespread use. This would be Amazon’s equivalent play.)

People would find that they’d be happy to accept Amazonians, because there is a guaranteed use for them. If, at the same time, governments tried to block Bitcoin, but gave the green-light to Amazonians because Amazon committed to submit to the tax structures of the day (dodging tax seems to be one of Bitcoins supposed selling points) then the bulk of coin users will gravitate to Amazonians. It would just be easier.

In this game, user-numbers are king.

Bitcoin has the numbers for now, but there’s a long road of uptake ahead of it before it can claim to be the dominant player for sure.

And even then, how long do dominant players in any industry last these days? 10-20 years?

So to me, betting on Bitcoin is really a bet that no better system will evolve in the next 10-20 years. And I’m not talking about better from the perspective of an anarchist utopia, but better simply from the point of convincing more mum and dad users to get on board.

That is a HUGE bet in my mind.

So if you’re investing in Bitcoin – and really we should stop saying “invest”. If Bitcoin is actually currency, you don’t ‘invest’ in currencies. You speculate in them. You buy them on the speculation that they will increase in relative price. There’s no underlying value.

So if you’re speculating in Bitcoin, I would say that you need to be aware that the massive returns that are possible are equally balanced with the massive risks involved in any single crypto-currency.

Block-chain is a revolution. It’s amazing. But so was and is the internet. And a lot of money got poured down the toilet during the dot-com boom.

To me it feels like a case of history repeating.

???

What do you think? That’s my case against Bitcoin. Stronger than my case for?

I’ll leave it to you to be the judge. I’m just trying to shed a light on a world that has become very confusing very quickly.

And of course. I’m no expert. I’m just a smart guy with a few hours up his sleave. There could be huge parts of the story I’m missing.

Very happy to hear about it.

NEXT TUESDAY: I’ll look at wether Bitcoin is a bubble (what you need to be in a bubble) and look at ways you could still make money, even if it is. Look out for that.

What did I miss?

NO B.S. FRIDAY: Why I’m awesome like the Dalai Lama

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Australian culture is toxic.

What if I told you I’m one of the most dangerous players in the senior soccer league?

(Totally true.)

What would you say that says about my ego? What about my self-esteem?

Somehow we’ve developed a culture where we go out of our way to help people keep their egos deflated. If someone is celebrating their success a little too much, we feel we have total license to go and let the air out of their balloon.

We actually think we’re doing them a service.

I don’t know where that comes from. Maybe we’re all just products of a ruthless Western Civilisation.

Don’t get too attached to your possessions. It’s only a matter of time before some landed lord confiscates them and uses you and your sons as cannon fodder. If you keep a lid on things now, it will lessen the disappointment later.

And whether it’s raising our children or keeping our mates in check, we feel everyone needs someone to “keep their feet on the ground.” It’s what mates do. We stop our mates’ successes going to their head.

“Nah Giaan. You’re not that good. Maybe you’re in the top ten, but definitely not the MOST dangerous…. You’re welcome.”

I can’t tell you how frustrating I find this.

Often it's because the people offering you that public service of keeping your feet on the ground actually have no idea what’s going on with your ego. They have a need to preserve their own fragile image of themselves and the only way they can do that is by putting down the people around them…

… and then dressing it up as an act of charity after the fact.

Total garbage.

So there’s often dishonesty there. But even the intention is rubbish. Why on earth would you need to keep someone’s feet on the ground? I want people around me who want me to fly, like the glorious seagull of awesomeness that I am.

Why wouldn’t you want to give energy to your own and other’s successes? Unpack them, build confidence in them, make them part of who you are…

The trap here is that we have all these half-baked pop psychologists going around bastardising the idea of ego.

The ego is your sense of self. It’s the mental construct of who you are. It’s the story you tell about yourself.

So everyone has one.

But the idea that an ego can be ‘big’ is total nonsense. What does that even mean?

If anything, a “small” ego, if there even is such a thing, would reflect a lack of self-awareness.

And people with limited self-awareness give me the shits far more than people with a nuanced and conscious awareness of themselves.

But no, big, small, it’s ridiculous.

But where ego comes into play for me is around fragility.

That is, the story that they’re telling about themselves is so fragile that they constantly need to defend it and build it up.

These are the people that are difficult to be around.

They’re the ones cutting people down so they can keep telling a story about how awesome they are.

They’re the ones constantly inventing excuses for why they’ve never succeeded, and enviously resenting others successes.

They’re the ones bragging about their soccer skills in nationally distributed blogs, and then dressing it up as profound life lessons to make it seem less pretentious.

So it’s not whether it’s big or small, it’s what you do with it.

(Right, babe?)

And that’s about fragility.

But if that’s true and it’s about fragility, why aren’t we out there celebrating each other’s successes? Taking the time to go, look at what you did. How awesome is that? You are a successful person. You are someone who works hard and gets results. Good on you.

Why aren’t we out there helping each other build robust and durable egos, built on successes that are regularly recognised and celebrated?

But no, we go out of the way to make sure that each other’s egos are constantly under attack as if we wanted to ensure that our egos were as fragile as possible and that we were all as painful to be around as possible.

And we make this a national pastime.

Toxic flipping culture.

Let me ask you another question. What would you say about the Dalai Lama’s ego? What would you say about his self-esteem?

I’m not really sure what relationship the Dalai Lama has with his ego. He’s probably transcended it or transmuted it into a radiant lotus flower or something.

But I’m willing to bet that whatever he’s done with it, his ego is fairly robust. It’s not fragile.

And I’m also willing to bet that he has solid, or high, self-esteem.

He probably has a good sense of who he is, his strengths and limitations, and his role in the world.

(By all accounts he’s a lovely man to be around – not at all painful.)

And as aware of his awesomeness as he probably is, I doubt that he ever gets into dick measuring contests about who is better than who.

It probably never occurs to him to even think about it in that way. That’s the terrain of a fragile ego – needing to prove yourself relative to others.

So I would feel pretty confident saying that the Dalai Lama has a robust ego and a high self-esteem.

We’re both awesome like that.

So if that’s true, can all you people trying to ‘help me keep my feet on the ground’ so I can be more like the Dalai flippin' Lama just go and get stuffed?

If you want to help people, help them build a strong sense of self-worth – an inherent self-worth that comes from within, not from measuring your wing-wang against others.

Recognise, celebrate, support.

That’s the culture I want to live in.

It’s not that hard.

Anyone trying to keep your feet on the ground? What comes up for you when you notice you're celebrating your success too hard?