The Declining Value of Personal Advice

27 Jun

There used to be a time when before buying something, you asked your friends and peers about advice, and it was the optimal thing to do. These days, it is often not a great use of time. It is generally better to go online. Today, the Internet abounds with comprehensive, detailed, and trustworthy information, and picking the best product, judging by its quality, price, appearance, or what have you, in a slew of categories is easy to do.

As goes for advice about products, so goes for much other advice. For instance, if a coding error stumps you, your first move should be to search StackOverflow than Slack a peer. If you don’t understand a technical concept, look for a YouTube video or a helpful blog or a book than “leverage” a peer.

The fundamental point is that it is easier to get high-quality data and expert advice today than it has ever been. If your network includes the expert, bless you! But if it doesn’t, your network no longer damns you to sub-optimal information and advice. And that likely has welcome consequences for equality.

The only cases where advice from people near you may edge ahead of readily available help online is where the advisor has access to private information about your case or where the advisor is willing to expend greater elbow grease to get to the facts and think of advice that aptly takes account of your special circumstances. For instance, you may be able to get good advice on how to deal with alcoholic parents from an expert online but probably not about alcoholic parents with the specific set of deficiencies that your parents have. Short of such cases, the value of advice from people around is lower today than before, and probably lower than what you can get online.

The declining value of interpersonal advice has one significant negative externality. It takes out a big way we have provided value to our loved ones. We need to think harder about how we can fill that gap.

Why do We Fail? And What to do About It?

28 May

I recently read Gawande’s The Checklist Manifesto. (You can read my review of the book here and my notes on the book here.) The book made me think harder about failure and how to prevent it. Here’s a result of that thinking.

We fail because we don’t know or because we don’t execute on what we know (Gorovitz and MacIntyre). Of the things that we don’t know are things that no else knows either—they are beyond humanity’s reach for now. Ignore those for now. This leaves us with things that “we” know but the practitioner doesn’t.

Practitioners do not know because the education system has failed them, because they don’t care to learn, or because the production of new knowledge outpaces their capacity to learn. Given that, you can reduce ignorance by 1) increase the length of training, b) improving the quality of training, c) setting up continued education, d) incentivizing knowledge acquisition, e) reducing the burden of how much to know by creating specializations, etc. On creating specialties, Gawande has a great example: “there are pediatric anesthesiologists, cardiac anesthesiologists, obstetric anesthesiologists, neurosurgical anesthesiologists, …”

Ignorance, however, ought not to damn the practitioner to error. If you know that you don’t know, you can learn. Ignorance, thus, is not a sufficient condition for failure. But ignorance of ignorance is. To fix overconfidence, leading people through provocative, personalized examples may prove useful.

Ignorance and ignorance about ignorance are but two of the three reasons for why we fail. We also fail because we don’t execute on what we know. Practitioners fail to apply what they know because they are distracted, lazy, have limited attention and memory, etc. To solve these issues, we can a) reduce distractions, b) provide memory aids, c) automate tasks, d) train people on the importance of thoroughness, e) incentivize thoroughness, etc.

Checklists are one way to work toward two inter-related aims: educating people about the necessary steps needed to make a decision and aiding memory. But awareness of steps is not enough. To incentivize people to follow the steps, you need to develop processes to hold people accountable. Audits are one way to do that. Meetings set up at appropriate times during which people go through the list is another way.

Quitting at 40

6 Apr

Recently, I had the pleasure of interviewing Walter Guillioli. Walter is one of those few brave people who has had the courage to take the reins of his life. Walter carefully and smartly worked to save enough to live off the savings and then quit a well-paying job at 40 to live his life.

GS: Tell us a bit more about yourself.

I grew up in a middle-income family in Guatemala. I am the youngest of five. Growing up, I enjoyed getting into trouble.

From a young age, I was taught that education is important. I studied Computer Science in college. And later, I was fortunate to get a full scholarship from the Dutch government to get an MBA.

I worked in Marketing for 10+ years until I got bored and decided to switch careers to data science. I just finished a Master of Science in Data Science from Northwestern while working full-time.

I love animals, the outdoors and the simple things in life like camping and good scenery. I also like to push myself in sports because it humbles me and helps me build character. I got a black belt in Tae Kwon Do at 38, and I am currently training for ultra-running trail races.

GS: Why did you decide to quit working full-time at 40?

WG: It is a combination of factors, but it is mostly a result of intellectual boredom and a desire to spend my time on earth doing things I love, and to not just “survive” life.

I have always questioned the purpose of (my) life and never liked the cycle most follow: study > work > get married & have kids > consume > be “busy” > (maybe get free time at old age) > die.

Professionally, I have done relatively well. Searching “success,” I have found my dream job three times. However, each time I found my “dream job,” the excitement faded away quickly as I spent most of my time surviving meetings and going through the grind of corporate overhead. I never understood all the stress for work that I didn’t think added much value. I love intellectual challenges and good work, but it was hard to find it in a big corporation.

One of my favorite quotes in Spanish translates roughly to “the richest person is not the one that has the most but the one that knows how to desire less.” And between spending my time in a cubicle working on stuff that didn’t matter to me and buying things I didn’t need, I decided to buy my time and freedom to do what I want.

I decided with my wife to live a simpler life and to move closer to nature and the mountains. I decided to spend more time with my family and raise my 2-year old. I decided that each day I will pick what to do – whether it is going for a trail run (I am training for a 52-mile run) or riding my mountain bike or dirt bike or simply walking my dogs for a few hours or playing with my son and wife in a park or just reading a book.

I will work on projects. I will just work on stuff that matters to me. I want to occasionally freelance on data science projects and contribute to the world. I am also considering personal finance advising to help people.

GS: Tell us a bit more about how you planned your retirement.

WG: I never had a master plan. It has been a learning process with mistakes along the way.

The most important thing for me was changing the mindset about money. I never paid much attention to money. I spent it relatively mindlessly. However, after reading articles like this one, I realized that money is a tool to buy my time and freedom. I can’t think of anything better that money can buy.

So, we focused on understanding our expenses and figuring out ways to reduce them. It’s not about being cheap but about spending intentionally. We also started saving and investing as much as possible on index funds. The end goal became having enough money invested that we could cover our annual expenses from its interest.

GS: What’s your advice for people looking to do the same?

WG:

  1. Track and understand your annual expenses with a tool like Quicken or Mint.
  2. Save as much as you can and invest in index funds. Don’t worry about timing the market (it doesn’t work) or about having the perfect portfolio. Start investing in a broad index fund like Vanguard’s VTSAX and get a bit more sophisticated later. Learn more here.
  3. Make a list of things that truly bring you happiness and contrast that with your spending.
  4. Avoid “lifestyle inflation.” And don’t try to keep up with your neighbors. Nothing will be ever enough.
  5. Read these books: Little Book of Common Sense Investing, Simple Path to Wealth, Your Money or Your Life, Four Pillars of Investing.
  6. Read these blogs: Mr. Money Mustache, Mad Fientist
  7. Listen to the ChooseFI podcast.
  8. If you are married, make sure that everyone is onboard.
  9. Have savings targets and automate everything around it so that you pay yourself first.

Advice that works

31 Mar

Writing habits of some writers:

“Early in the morning. A good writing day starts at 4 AM. By 11 AM the rest of the world is fully awake and so the day goes downhill from there.”

Daniel Gilbert

“Usually, by the time my kids get off to school and I get the dogs walked, I finally sit down at my desk around 9:00. I try to check my email, take care of business-related things, and then turn it off by 10:30—I have to turn off my email to get any writing done.”

Juli Berwald

“When it comes to writing, my production function is to write every day. Sundays, absolutely. Christmas, too. Whatever. A few days a year I am tied up in meetings all day and that is a kind of torture. Write even when you have nothing to say, because that is every day.”

Tyler Cowen

“I don’t write everyday. Probably 1-2 times per week.”

Benjamin Hardy

“I’ve taught myself to write anywhere. Sometimes I find myself juggling two things at a time and I can’t be too precious with a routine. I wrote Name of the Devil sitting on a bed in a rented out room in Hollywood while I was working on a television series for A&E. My latest book, Murder Theory, was written while I was in production for a shark documentary and doing rebreather training in Catalina. I’ve written in casinos, waiting in line at Disneyland, basically wherever I have to.”

Andrew Mayne

Should we wake up at 4 am and be done by 11 am as Dan Gilbert does or should we get started at 10:30 am like Juli, near the time Dan is getting done for the day? Should we write every day like Tyler or should we do it once or twice a week like Benjamin? Or like Andrew, should we just work on teaching ourselves to “write anywhere”?

There is a certain tautological aspect to good advice. It is advice that works for you. Do what works for you. But don’t assume that you have been given advice that is right for you or that it is the only piece of advice on that topic. Advice givers rarely point out that the complete set of reasonable things that could work for you is often pretty large and contradictory and that the evidence behind the advice they are giving you is no more than anecdotal evidence with a dash of motivated reasoning.

None of this to say that you should not try hard to follow advice that you think is good. But once you see the larger point, you won’t fret as much when you can’t follow a piece of advice or when the advice doesn’t work for you. As long as you keep trying to get to where you want to be (and of course, even the merit of some wished for end states is debatable), it is ok to abandon some paths, safe in the knowledge that there are generally more paths to get there.

Searching for Great Conversations

21 Mar

“When was the last time you had a great conversation? A conversation that wasn’t just two intersecting monologues, but when you overheard yourself saying things you never knew you knew, that you heard yourself receiving from somebody words that found places within you that you thought you had lost, and the sense of an eventive conversation that brought the two of you into a different plain and then fourthly, a conversation that continued to sing afterward for weeks in your mind? Conversations like that are food and drink for the soul.”


John O’Donahue h/t David Perell