Top ten ways you can appear rich even when you’re poor

1: Be fit and slim: there is a strong negative correlation between wealth and obesity. Why?

Contrary to popular belief, the rich are not slimmer because a healthy diet is more expensive or they can afford personal trainers. They are slimmer because they invest more thought into what they eat. This is because the wealthy have a lower time preference: they are willing to forgo the short-term pleasure of a sugar rush for the long-term reward of truly delicious food, good health, and good looks.

In developed countries where calories are cheap, our choice of food is determined by three factors: stress, culture, and availability.

Stress is the main determinant of time preference with food. Chronic stress makes us unable to make intelligent decisions about diet, and dietary sugar is the main pharmacological compound we used to deal with stress. Sugar and other processed carbohydrates are the main cause of obesity. For non-athletes, exercise has nothing to do with it.

There is much more to say on this topic, but to sum up: if you can learn to manage your stress, you will learn to manage your cravings. You can choose to develop a culture of cooking real food, and even though good food will not be as available to you, you can learn to go out of your way for it.

2: Wear well-fitting clothes: the rich are not fashionable because they can afford luxury brands. They are fashionable because they are conscious about fit and style. You don’t need to go to a bespoke haute couture tailor to dress well: you can find something that fits you at Goodwill. You just need to do free online research and make a conscious effort to design your wardrobe.

3: Show up on time: this is not to say that the rich are always punctual and the poor are late, but that the wealthy can afford to be physically and mentally present for occasions that they deem worth their time. The poor are usually distracted and either physically or mentally absent.

Like with diet, the root cause is stress: it’s much easier to be present when you can throw money to make your distractions go away. But if you’re poor, there is something else you can throw away to make your stressors go away: attachments. All relationships and possessions cost time and money. Some relationships and possessions are worthwhile and produce a positive return, while others are a net drag. When you are poor, it’s much easier for minor things to drag you down, so you must keep your load to a minimum. Partying is expensive. Owning a car is expensive. Owning the latest iPhone is expensive. Let go of attachments that are not vital to your long-term success and you will thrive.

I didn’t have a car until I got my master’s at 23. It’s not that I couldn’t afford or didn’t want a car (living in a small Texas college town). I knew that it would be an ongoing cost and a distraction from my main goal of completing my education.

4: Be young: no amount of wealth will give you a younger body, but you are in control of the two biggest causes of aging: obesity and sun damage. You may not be able to afford plastic surgery, but you can control the main reasons why the rich need plastic surgery in the first place.

5: Have a big family: while there is a strong relationship between poverty and more children, the cost of raising kids is one of the main reasons parents don’t have more children.

Children are expensive at all income levels since the expectations on parents grow proportionately. But I think the problem is the same: parents think that being good parents means spending money on their idea of a good parent rather than spending time being a parent. For example, in my family, we took our daughter out of an expensive private school because we found that she learned more from us at home. We don’t spend our time shuttling her from one activity to another, but go hiking, play chess, and cook together. Being a parent is cheaper and more rewarding than hiring someone else to parent your child.

6: Have a successful marriage: There is a very strong relationship between divorce, single parenthood, and poverty. Why do the poor get divorced more often? The root cause is an inability and unwillingness to negotiate conflict: all relationships take work and generate stress. Successful couples can take time to do the work because they manage their stress. Couples who divorce let stress and resentment build up. It is said that the overwhelming reason relationships fail is “lack of commitment.” But why are people not committed to relationships? It’s because it does not create value for them. Once the sensual aspect wears off, the inherent friction of human relationships overweights the positive aspects of the partnership. Poor people divorce for the same reason they get fat, and it has nothing to with money. The root cause of poverty, obesity, and divorce is high time preference.

7: Don’t complain: Wealthy people are happier, while the poor are much more likely to be depressed. Part of the reason is that they can throw money at problems. A more fundamental reason is that the poor have a scarcity mindset, while the wealthy have an abundance mindset.

The abundance mindset sees the universe as full of opportunity — for friendship, love, and financial success. By contrast, the scarcity mindset sees everything as a fixed pie and leads to hoarding, envy, and stagnation in every aspect of life.

Poor people with a scarcity mindset think that if their neighbor has something good, whether it’s a possession or relationship, it must be unavailable to them. So they complain about the cruel, unjust universe.

Wealthy people with an abundance mindset see others’ success as an inspiration: if their neighbor has a great marriage, a beautiful house, or a successful business, there is something positive to learn, and potentially a valuable relationship to build. The universe is full of opportunities, so there is no reason to complain about failure – they have only themselves to blame.

8: Enjoy great art: while the rich can afford an original Banksy their wall, and will.i.am at their kid’s bar mitzva, the world’s greatest paintings are in public museums, and great music and film are nearly free for you to enjoy — if only you developed a taste for it.

It is said that Howard Hughes once locked himself in a hotel room and watched Ice Station Zebra for months. If I developed an OCD desire to watch a movie on repeat for months, it would the 2003 film “Master and Commander.” I’ve heard some people complain that the film is boring and doesn’t have enough action. Once again, high-time preference is at fault. You are addicted to crave the rush of sugar in food, the cheap dopamine thrill of pornography, and the freight train of explosions in the latest Michael Bay Transformers 7: Faster and Exploder.

Nurturing a taste in great art takes patience and time, but if you want to explore the highs and lows of the human condition and be inspired to be a deeper, more passionate soul, you must put in the time and work.

9: Keep a clean house: yes, the wealthy can hire housekeepers to pick up after them. But if you’re poor, you have an advantage they don’t: you have fewer possessions and less space to store them in.

While weekly cleaning is necessary for every household, being organized is more important: by putting things away after you use them (and teaching your kids to do the same) you can keep your home from becoming a mess in the first place.

The messy appearance of poor households has another cause: the scarcity mentality. People hoard things they don’t need because they worry that they won’t be able to get a hold of them again. But possessions you don’t need right now are only a drain on you: they take up physical and mental space in your life. Let go of the things you don’t need with the faith that they will be there when you need them again. There are “Buy Nothing” neighborhood groups all over the U.S. where families freely exchange things they don’t need anymore. This year, I got a punching bag, a shop vac, a kids trike, lightning for my garage, toddler clothes, yard tools, and much more. We gifted just as much. Relying on relationships and having faith in people’s generosity frees us up for physical and mental baggage.

10: Don’t stress about money: in developed countries, stress about money is the worst aspect of poverty, worse than the physical deprivation it forces. Few people in America have to worry about going hungry or homeless, but many more live paycheck to paycheck with chronic stress about money. A $500 surprise expense would put most Americans into debt.

A high income is no guarantee of financial well-being: if your spending rate is greater than your income, you will never have financial security. Real wealth is not measured in income, but financial security: the confidence that no matter what happens to your income stream, your lifestyle won’t be affected.

The solution to money stress is simple: live below your means and build an emergency fund. It’s easier not to stress about money when you’re young and broke. When you’re starting out, all you need to worry about is living below your means and keeping your emergency cash fund topped up. When you’re wealthy, very little of your net worth is cash. You have to balance your net worth between business interest, real estate, securities, and other assets. Managing your portfolio becomes a part-time job – unless you hire expensive money managers, which is another set of worries.

Conclusion

Wealth is one possible reward for developing good habits in life. It takes time and luck to build wealth, but you don’t need to wait to become rich to enjoy the other rewards that result from striving for physical and mental health.

  • Find life-enhancing ways to manage stress (such as sports or hobbies rather than food, porn, drugs, or tv)
  • Eliminate relationships that drag you down and distract you from your life’s goals
  • Put as much thought into your appearance as you do into other important aspects of your life
  • Make a concerted effort to nurture your soul with great art
  • Eliminate possessions that do not bring you joy or add more value than the financial, physical, and mental burden they carry
  • Live below your means to avoid financial stress

Bitcoin has already advanced global privacy and financial autonomy

If Bitcoin and other cryptocurrencies were to disappear tomorrow, what legacy would they leave behind?

I can think of three main impacts:

First, Bitcoin raised awareness of the flaws in fiat money, the superiority of sound money, and the potential of people to trade with each other without third-party intermediaries.

Second, Bitcoin has provided a life raft to millions of people under regimes suffering hyperinflation (like Venezuela), confiscation (like India), or currency export controls (like China). These people have been able to safeguard and use their savings.

Third, Bitcoin has advanced the state of cryptography, from a plaything of spy agencies and banks to a ubiquitous privacy layer securing the information of the entire world.

While each of these points could be an essay, I want to focus on the third impact today, starting with the state of cryptography before the invention of Bitcoin.

In his 1988 “Crypto Anarchist Manifesto“, Timothy C. May introduced the concept of crypto-anarchism, the idea that ubiquitous encryption would allow total freedom of trade by blocking the ability of governments to spy on and thus interfere with markets.

Inspired by his essay, thousands of aspiring “crypto-anarchists” (like me) installed software like PGP/GPG and tried to bring about the revolution. Then we ran into a few problems:

First, the software was way too complex for laypeople to use. Only dedicated hackers have the ability and patience to encrypt our communications. As long as only a few cooky radicals used cryptography, there was no incentive for merchants to adopt it. Likewise, email and messaging platforms were not encrypted, and using encryption branded you as a radical, and maybe even a criminal.

Second, the public did not believe in the potential of encryption. This was for two reasons: First, cryptography was seen as something for the NSA and CIA, not the public. Until 1992, cryptographic algorithms were on the U.S. Munitions List as Auxiliary Military Equipment. While using encryption within the U.S. was protected by the first amendment, it was illegal to export strong encryption outside the U.S., which crippled the commercial cryptography market. Second, it was believed that hackers could break cryptographic algorithms — it was simply a matter of applying sufficient computational power. To some extent, until the adoption of AES in 2001, this was true.

The third problem we ran into was conducting an anonymous exchange. There was no way to transmit value without eventually involving the legacy financial systems, which were becoming less and less anonymous. Efforts to create a digital proxy for gold such as e-gold and e-Bullion survived for a time, but were shut down by the U.S. government around 2009. The Foreign Bank Account Report of 2010 was part of a wave of global regulations which ended banking secrecy worldwide.

This context is important to understand the import of Bitcoin’s invention in 2008:

Until Bitcoin, the entire field of cryptography lacked strong real-world validation. While the banking industry used things such as RSA tokens and browsers used SSL for decades, their security was unproven. Because it is generally possible to reverse or void legacy financial transactions, the financial industry does not face a strong motivation to ensure the integrity of its cryptography.

This skepticism was validated when the National Security Agency was proven to have secretly weakened the RSA standard, and that vulnerability was exploited against major U.S. corporations in 2011. Additionally, documents leaked by Edward Snowden showed that the NSA had aimed to subvert cryptography standards.

As Bitcoin’s market cap grew from $0 to over $1 trillion today, larger and larger sums were protected by cryptography. For the first time, there was actual value behind cryptographic algorithms, and the entire field of cryptography began a rapid evolution. A $1 trillion prize is available to anyone who can subvert the security behind Bitcoin. This is an enormous incentive to advance the entire system of cryptography, from better algorithms to the ecosystem of software and hardware devices.

In 2021, the entire world has moved online. 67% of the world’s population has a mobile device – nearly all adults, and quite a few children. Within a decade, nearly all of those users will use a smartphone, which facilitates not only voice conversations but embedding all aspects of one’s life – business, shopping, education, romance into the global Internet. Thanks to advances in cryptography, we’ve seen the vast majority of that communication moved from plain-text to encrypted networks. With the notable exception of Chinese platforms, the most popular apps now use P2P encryption. WhatsApp, Telegram, and Signal are end-to-end encrypted, so no individual or government can spy on them. (Apple iMessage is E2E encrypted when iCloud iMessage backups are turned off). VPN networks have gone from corporate and esoteric to cheap and ubiquitous. In 2011, I struggled to set up my VPN while living in China to evade censorship. In 2021, in the U.S. I use my home VPN like millions of other Americans to enhance my privacy. It’s fast, invisible, and costs under $2/month.

Today, all my computers and backups are encrypted, and they come with hardware-level encryption so that there is no impact on performance. I secure my access to Google, Facebook, and other popular services with U2F hardware tokens. My Bitcoin is secured by hardware wallets that incorporate plausible deniability and multiple cryptographic signatures.

While we can’t simply give Bitcoin credit for all these achievements, embedding value in communication networks has been the single most powerful incentive for the world to step up its security game.

Observe that after the NSA paid RSA $10 million to backdoor the security tools used by the world’s largest corporations, it took from 2006 to 2013 for the world to exploit the flaws in RSA. By contrast, cryptocurrency exchanges and custodians are a much more lucrative target, and thus face much stronger pressure to keep evolving their security practices. When Northrop Grumman was hacked with the RSA exploit, some Chinese or Russian agent received a promotion, whereas the hackers of Mt Gox, Binance, and dozens of other exchanges were set for life, with little fear of repercussions.

Today, I am a lot more skeptical that ubiquitous encryption will bring about Timothy May’s dream of a crypto-anarchist utopia. However, I think there is a very good case that the invention and adoption of Bitcoin has dramatically advanced global privacy and financial autonomy.

Why GameStop is not the new Bitcoin

When Robinhood disabled customers from buying GameStop, some people in the WallStreetBets subreddit suggested a need for a “decentralized brokerage.” Others said that “GameStop is the new Bitcoin.” Yet others decided to target the Dogecoin cryptocurrency, which spiked over 500% before it failed to process transactions due to overload.

The premise behind these ideas is hilariously wrong, but it’s worth exploring why.

It’s not surprising that young people growing up in the age of decentralized and censorship-resistant cryptocurrency exchange expect stock exchanges to be decentralized and censorship-resistant too.

Stock exchanges do exist to make business ownership accessible to everyone. Unfortunately, while trading stocks has become much cheaper and easier thanks to technology, the value of owning stocks has fallen dramatically.

To be listed on a stock market, a company has to pass many very expensive regulatory hurdles. But by the time a company goes public, much of the risk (and therefore profit) has been taken by venture capitalists and private equity investors.

The 2001 and 2008 financial crises led to the 2002 Sarbanes-Oxley and 2010 Dodd-Frank Act. These regulations made it much more expensive to go public, which has led to an over 50% decline in the number of publicly-traded companies. There are now just 3,530 publicly traded companies in the US. Anyone can buy a stock on their phone today, but by the time the government lets the company sell you shares, most of the profit potential has already been captured by wealthy venture capitalists and private equity investors. It’s no wonder people are looking at cryptocurrencies for more risk and return.

Back to the idea of a “decentralized exchange.” We think we own the stocks we buy, but that is not legally true. Cede and Co. legally owns all publicly issued stock in the United States – over 50 trillion dollars worth. It processes over $500 trillion and 325 million trades in these stocks on behalf of individual investors. New York State appointed Cede as the central securities depository in 1973, and all stock exchanges settle their transactions there.

You might think that when you buy a stock, Cede enters your name in a ledger somewhere, but that’s not true either. Cede only records the “street name” — the name of the brokerage which holds the security. The brokerage (ETrade, Robinhood, etc) is responsible for tracking who has rights to shares. You can request to get paper share certificates issued on your name (like investors used to get), but no one does this anymore.

This is a very simplified version of how stock ownership works, but I hope you can see why the idea of a “decentralized brokerage” is absurd.

On the surface, a centralized cryptocurrency exchange work in a similar way. When you buy Bitcoin on an exchange, you get a right to some amount of cryptocurrency. Until you withdraw it to your wallet, you only have a claim to your assets.

The big difference between a share of Gamestop and Bitcoin is that you can take purchase and take possession of Bitcoin without any intermediary. Whether you use a decentralized exchange, buy from a friend, or mine it yourself, no approval is needed for the transaction, and no authority can block the trade or take it away. It’s also impossible for anyone to devalue your Bitcoin by issuing more of it beyond the set mining rate.

These are the real reason why Bitcoin has value. Eventually, the GameStop share price will fall back down to reflect its fundamental nature as an outdated and failing business model, while the Bitcoin price will keep rising as users validate its fundamental nature as an alternative to the failing system of central banking.

What about Dogecoin? If the whim of the members of an investing community drives cryptocurrency prices, can Bitcoin achieve any kind of long-term stability? The Dogecoin outage is a clue.

The Doge network does not have enough nodes to process transactions. The reason Bitcoin has been able to hold a dominant market share since 2009 is that it has the biggest ecosystem of miners, users, and service providers. Unless another cryptocurrency obtains a compelling technical advantage, and the Bitcoin network is unable or unwilling to match it, Bitcoin will keep its lead.

Don’t panic: why Tether won’t destroy crypto

This article by “Crypto Anonymous” claims that Tether will bring a crypto “doomsday.” The author makes many good points in building his case, yet the overall conclusion is less than the sum of its parts.
Here’s the short version of why he’s wrong: Yes, Tether creates systemic risk for Bitcoin. But the key claim that new Tethers are fraudulently created without dollars to back them is pure speculation. Furthermore, the impact of a Tether collapse decreases as the ecosystem grows, so there’s no need to be “frantic” about a “crypto doomsday.” Finally, stablecoins like Tether should not be confused with true cryptocurrencies like Bitcoin, which do not fall in the same category of risk.
Speculation about whether Tether is backed by dollars has been going on almost since the currency was created in 2014. Tether is the primary onramp to buying cryptocurrencies on many exchanges, so during Bitcoin bull markets, Tether issuance does too. This fuels speculation about whether Tether is backed by dollars. It’s a fair question to ask. But note that Tether honored withdrawals from 2017 to 2018, when the price of Bitcoin fell from 20K to $3.2K. Total market capitalization decreased from $821 billion to $105 billion, and Tether’s market cap fell from 2.8 to 1.6 billion. I question the accuracy of all of these numbers, but it’s clear that Tether weathered a major selloff.
At this point, everyone in the know has accepted that Tether is less than 100% backed by dollars, but as long as the crypto selloff is not too severe, it has enough reserve to weather most storms. Even if Tether comes up short and becomes unable to honor all withdrawals, a partial devaluation will result in a haircut for Tether holders, not a doomsday for a market that is used to huge day to day swings.
Let’s speculate on a key question: if Tether isn’t a fraud, why don’t they perform an audit and come clean about their books? The answer is that crypto occupies a legal gray area, and exposing all their accounts would put Tether’s banking relationships at risk. Until about a year or so ago, banks categorically avoided any crypto business. They would close accounts of consumers who wired money to crypto exchanges and scan peer to peer payments for any mention of crypto. Legitimate crypto entrepreneurs had to stash vast amounts of cash like drug dealers cash because they couldn’t maintain any bank accounts for long. My partners and I were very fortunate to have relationships to open a bank account for our hedge fund in 2017.
Now imagine how difficult it would be for Tether to store billions of dollars in a fully disclosed manner. It’s clear now that Tether decided to obscure their banking relationships and use less-legitimate partners, and lost some of their funds as a result. Today, fully audited stablecoins such as USDC and USDG compete with Tether, but their market share is still a minority.
Regulated stablecoins are a great solution for many, but not all. For a stablecoin to be audited, their banking partners require strict KYC, and exchange partners that redeem those coins must obtain government licenses. This means that there is an ongoing demand for stablecoins that can be redeemed in a less-regulated environment. This is one of the reasons why Tether is so popular: it helps crypto traders work around currency controls in various Asian countries, especially a big one that starts with C. The other reason is that Tether allows less-regulated exchanges to exchange in leverage, market manipulation, and other practices that regulated exchanges can’t get away with. Still, the bottom line is that stablecoin competition is great and lowers the overall systemic risk posed by Tether.
Finally, a stablecoin like Tether should not be confused with Bitcoin. There’s no doubt that market manipulation, massive leverage, and fake trading numbers dramatically inflate the demand for crypto and market cap numbers during each bull run. However, unlike a Ponzi scheme, Bitcoin recovers after each crash, even as most other cryptocurrencies falter. Bitcoin serves a practical purpose and that in turn, drives legitimate long-term investors and institutions to Bitcoin.
Tether may collapse one day. But with ever-growing competition from audited stablecoins, there’s no reason to think that it will take the entire crypto market with it, that it will happen soon, nor that Tether holders will be left with nothing.

Stimulus checks are a dangerous game

What happens when the government sends out a stimulus payment? Politicians can print money, but they cannot wish all the goods and services that money buys into existence. They would like you to think that their money causes factories to hire workers and put idle production lines to work. But that’s not what happens.
 
Tens of millions of employees and warehouses full of raw materials are not waiting around for stimulus money to put them to use. What were those people, factories, and raw materials doing before the stimulus?
Absent government intervention, they were putting their time and capital into the most profitable ventures they knew.
 
Stimulus money can boost consumer spending in the short-term, but it cannot command the resources needed to produce goods and services into existence. The short-term boost in consumer spending comes at the expense of long-term economic destruction.
 
Here is what most people (and economists) don’t understand: When the government creates new money, it can only create a short-term boost in consumer production at the expense of eroding the capital needed to produce those goods. “Capital” is all the things that make consumer goods and services possible: factories, farms, bridges, trucks, trains, and cargo ships, sewers, mines, warehouses, and so on. By printing money or lowering interest rates, the government steals from savers to pay spenders. Those savings are what pays for capital maintenance and expansion. Without savings, factories can’t maintain or expand production.
 
Worse yet: the new money is not distributed evenly but goes mostly to those with political connections rather than successful or innovative businesses. Taxpayers get a shiny check, while trillions more go to cronies.
 
The result of long term monetary manipulation is infrastructure rot: factories, bridges, buildings that crumble, and an inability to invest in research and capital expansion. The government makes money available to consumers and investors, but it cannot dictate new people and machines into existence. The stimulus causes new big-screen televisions to show up in department stores, but the VR headsets that the stolen capital would have produced never come to exist.
 
Printing money is addictive: once one politician sends a stimulus payment, they raise the bar for everyone else. Unless voters revolt at having their savings stolen, the game keeps escalating: print just enough money to win votes without collapsing the economy.
 
For nearly 100 years, the U.S. government has been running all sorts of welfare programs for the rich and poor alike. It has been able to sustain those programs because technological progress and capital accumulation expanded productivity just enough to keep up with the increased burden of the welfare state. It’s a dangerous game of brinkmanship: steal just enough from producers to win the next election, without causing an economic recession that causes voters to change sides. The game keeps escalating as politicians find more and more ways to steal savings and redistribute the loot.
 
For example, using the COVID-19 pandemic as an excuse, the government started buying corporate bonds, running huge permanent deficits, reducing the bank’s reserve requirement to 0%, and now, sending increasing large checks directly to the public.
 
How does this game end? All monetary manipulation creates economic destruction, but as long as the world’s major central banks move roughly in tandem (as they have been), the destruction goes unnoticed. However, the heavier the government burden, and the more reckless and inflationary policy, the more fragile the economy becomes. 9/11, the 2008 financial crisis, and the 2020 pandemic were all used to justify massive expansions in government programs. Now that voters have gotten a taste of direct cash payments, we’re entering a dangerous new phase. The coming escalation of fiscal irresponsibility is predictable and inevitable.
 
So is the economic correction that will follow when capital is looted to such an extent that economic production collapses, and the government can no longer pay for welfare programs or maintain its debt. Whether it’s a terrorist attack, another pandemic, or something else entirely, the next “emergency” could push the economy beyond recovery.
 
The only question is what happens then: a return to sanity or the end of the U.S. as a superpower?

Being Pro Liberty Shouldn’t Mean Being Anti-Science

My social feed is full of deeply flawed arguments about the science of COVID-19. It’s in the mainstream media too, but it bothers me more when I see it coming from my libertarian friends and organizations.
 
I used to be likewise “triggered” by libertarian and conservative writing about global warming. Leftists would probably call me a “climate change denier”. In reality, I have always been modest enough to know that I’m not qualified to debate climate science. I hope that comes through in my very first writing on the topic in 2007.
 
Likewise, I am humble enough to know that I’m not a doctor, an epidemiologist, a statistician, or a scientist. (Furthermore, being a professional scientist is not an automatic qualification to be an expert on fields outside one’s specialty.)
 
It’s is not a sin to abstain from taking a position on matters one does not fully understand. We are not obligated to express an opinion on the vast majority of issues. It’s acceptable and appropriate to admit ignorance on questions on which we cannot form an educated opinion and focus on topics that are more relevant to our lives. It is wrong, however, to attempt to inform others without having an educated opinion first. In the words of Frédéric Bastiat,
 
“The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.”
 
Do you need to be a climate scientist to comment on climate change or a doctor to comment on facemasks? That depends on the context of your argument.
 
There are some matters on which all adults are morally obligated to have an informed opinion. If you see a man snatch a purse on the street, you don’t need to be a philosopher specializing in ethics to shout “thief, stop!” Social existence requires consensus among the majority on some basic ground rules – be polite, wait your turn, presume goodwill, return your shopping cart, respect personal boundaries, etc. If someone proposes violating one of these rules, it’s enough to point it out as prima facie wrong.
 
Back to global warming: I’ve mentioned my objection to non-scientists pretending to have an informed opinion with ridiculous arguments such as
“but water vapor creates more warming than CO2!” But that works both ways. In “An Inconvenient Truth,” Al Gore claims that the sea level will rise 20 feet “in the near future.” The International Panel on Climate Change predicts a rise of 0.59 to 2.0 feet over the next 100 years. I’m not qualified to judge either number, but neither is Al Gore, and I can call him a liar when he cites numbers that have no basis in the scientific consensus.
 
More importantly, while I’m not qualified to debate the science of climate change, I am qualified to share opinions on political and economic matters. It’s not because I have degrees on the subjects, but rather because I got degrees in both subjects because of deep interest and years of research on political theory and economic principles. I don’t need to debate the science of climate to point out the benefits of industrial society, the morality of exploiting nature to further human flourishing, the reduction in suffering from natural disasters made possible by the economic development that the environmentalists now want to curtail. I can also show how developed nations are more capable of adapting to a constantly changing climate and environmentally conscious than primitive and developing societies.
 
There is a lot more than I can say on the matter. Still, I hope you can see that I focus on topics I (1) build arguments from basic principles that most people can agree on (2) point out when others make claims not consistent with scientific consensus and (3) focus on areas of personal interest that I’ve personally educated myself on.
 
With that context in mind, let’s return to the topic of COVID-19. It’s absurd that the question of hydroxychloroquine’s efficacy has become a political issue. We need evidence-based medical research precisely because anecdotal evidence can be so misleading. I have no time, interest, or ability to stay on top of the latest medical research. If I get sick, I will go to a medical professional who practices evidence-based medicine and trust them to make sound decisions.
 
What I am qualified to write about (and have at length) is the government’s destructive economic response to the pandemic, the importance of local decision-making in medicine, the harmful consequences of central planning in responding to the epidemic, and the moral right of people to make decisions about their health.
 
I’ve also covered the benefits of universal mask-wearing — according to the scientific consensus and empirical evidence. I’ve advocated for private property rights – the right of businesses to kick out people who refuse to wear masks, and their right to decide how much risk and liability they are willing to tolerate.
 
Being pro-liberty does not require being anti-science, even when politics have corrupted science. Our adversary is usually the advancement of political goals through under a scientific guise. You should untangle the evidence from the politics and address flawed political ideas and goals rather than discredit your side by demonstrating your ignorance when you venture into topics you don’t fully understand.

Ten Personal Finance Principles I’ve learned over 40 Years

Now that I’m 40, I feel both qualified to drop some wisdom on the world. To start, here are my 10 Principles of Personal Finance.
 
1: Marry someone who shares your financial philosophy:
If you don’t, you may be setting up for a life of endless conflict, not to mention the possibility of divorce, as money is the #1 issue couples fight over.
 
What is a “financial philosophy”? Here are some questions to discuss with your partner:
* Do you want to live in a single city or follow the best job opportunities? My wife and I moved from Dallas to NYC to Shanghai to Atlanta to Denver for job offers.
* How important is keeping up with fashion or your neighbors?
* Do you prefer to spend money or things or experiences?
* Are two incomes important to you?
* Who will educate your kids? (Homeschooling kids opens up all kinds of opportunities for us, though they will eventually attend Montessori school, which isn’t cheap.)
* Do you plan to retire early or not at all? Don’t leave it up to chance!
* How aggressive are you willing to be with your investments? * Would you tolerate a 30% drop in your savings because of a market crash? Would you invest your life savings in your business?
* Are you willing to live a minimalist lifestyle for your career and savings — or do you want to settle down?
 
2: If something brings you joy, and you have the cash to pay for it, disregard the rest of the rules and get it:
 
Life is too short to worry about whether something is “worth it.”
Note the two qualifiers: don’t spend money until you’ve tried something and know that it brings you joy. Furthermore, don’t spend money that you don’t have by getting into debt. With that in mind, when you identify something that makes you happy, don’t feel guilty about spending money on it. The goal of savings and financial responsibility is to enjoy your wealth, not die on a pile of cash.
 
3: When you are young, focus your energy on growing income. As you get older, focus on growing your assets and minimizing spending:
 
When young, don’t hesitate to invest your savings in yourself. While it’s essential to start investing early, it’s more important to invest in your wealth-creating ability. Learning most skills is cheap and can pay huge dividends — especially when you are young and your time is cheap. As you get older, your time will become more expensive, but your income and savings will grow. Now it’s time to protect your savings and focus on making your money work for you.
 
4. Don’t expect others to be smarter with your money than you:
 
Many people will tell you what to do with your money. They may your financial advisor, mutual funds salesmen, your parents, your coworker with a hot stock tip, your neighbor’s startup idea, and many more. Just because someone made a lot of money taking other people’s money doesn’t mean that they will make a return on your money. Fund managers drive fancy sports cars with money from the fees they collect, not necessarily because they are good investors. The most brilliant business idea in the world is useless without someone able to execute on it.
 
Always do your own research before investing in something, and don’t trust professional money managers. Research shows that most mutual funds fail to beat index funds after expenses.
 
5: Focus on “fixed” expenses over variable expenses:
 
The majority of your expenses are fixed: rent/mortgage, auto, insurance, childcare, and education. It’s easier and smarter to make a wise choice with long-term commitments than battling your willpower every day to skip your coffee, going out to eat, or whatever toy is on your mind.
 
Buy the cheapest home and car you’re willing to tolerate, not the most you can afford. Go to an in-state school, shop around for insurance options, etc. “Set and forget” your “fixed” monthly expenses, and you won’t need to stress about your day to day buying decisions.
 
6. Give your time generously when young, give your money generously when old:
 
When you are young, your productivity is low, and your time is cheap. Volunteering your time can be a valuable investment in your career. Offer a local business to set up a free website, write marketing copy, assist at a photoshoot, fix someone’s computer, help clean the hangar at a GA airport. You don’t have a lot of money to invest, but you can use your time to build your network and build valuable skills.
 
As you get older, you will become more productive, and your time will be worth more. Now is the time to build your savings and make your money work for you rather than work for your money. While a diversified market portfolio is important, as you get older and wiser, look for opportunities to invest in promising businesses. Most of your investments will fail, but a few might pay off.
 
7. Don’t confuse spending with achievement:
 
Have you ever bought a gym membership hoping to get in shape? What about an online course to learn a new skill? How about some sports equipment hoping to get into a sport? Or some new tools to start a new business? How often did you achieve a goal?
 
It’s common to spend money, hoping to achieve some value, but then fail to follow through and reach the initial goal. Sometimes just spending money on a thing makes us feel accomplished, like buying a gym membership and thinking that we’ve done something towards getting in shape.
 
Spending money towards a goal should never be your first step. If you want to learn something, start with some free resources – YouTube videos or a library book. Rent or borrow equipment for a new sport. Help out with someone else’s business before starting your own.
 
Many times you will decide that your goal is not right for you. You may find that the thing you wanted is not exactly the thing you need. You will also avoid the trap of thinking that you started a thing just because you spent money on it. Once you’ve taken a meaningful start towards your goal and have a firm idea of how spending money will make you more productive in achieving it, you can feel confident in spending money on it.
 
8. Make spending money on something your last recourse:
 
Sometimes it’s better to throw money at a problem than try to suffer through it. Paying a plumber to fix your leak, or a babysitter for a night out, or preventative maintenance on your car can be smarter than trying to tough it out.
 
In other cases, people throw money at a problem before exhausting their other options. If you need a new tool, can you borrow it from a friend or neighbor? Can you live without a car and use Uber and Turo to get around? Should you buy a house if you don’t plan to live in a city long-term? Have you tried fixing it before you buy a replacement?
 
Yesterday, I went to a car dealer for a tire pressure sensor issue. The dealer told me I had a nail in my tire and told me to replace all four tires for over $800. I turned around and went to Discount Tire. They repaired my tire for free.
 
I can’t count how many computers I’ve gotten for free because of some minor issues. I can almost always repair or upgrade them and sell or use them.
 
When I need something new, I will check out the local classified listings and see if I can get it used. I can usually find it for a fraction of what it costs new.
 
9. Go to bed early:
 
What does going to bed have to do with personal finance? Survey 100 millionaires, and you will find something in common. They tend to have their most productive period early in the morning. Whatever your job is, once you start working with your other people, it’s hard to develop a deep focus on the task at hand. You need a block of uninterrupted time when your mental ability is at your maximum, and early morning is the best time for it. Whether you are a door to door salesman or an auto mechanic, early morning is the time to develop a plan to work the day’s problems without distractions.
 
I try to use my mornings to go for an hour-long run or bike ride every weekday. I’m not sitting at my computer, but that time alone allows me to think about the day’s problems, set priorities, and develop a plan. After I get back immediately, I’m launched into endless meetings, but I already know what I must get done.
Getting proper sleep is, of course, required to be productive in the morning. Besides this, it’s a way of taking control of your life. People who feel powerless during their day stay up late to try some sense of self-ownership back, but it only ruins their productivity for the day ahead. Google 報復性熬夜 to understand the psychology of this phenomenon.
 
10. Develop an abundance mindset:
 
Successful people share many traits, but I think one key attribute is the abundance mindset. The abundance mindset sees the universe as full of opportunity — for friendship, love, and financial success. By contrast, the scarcity mindset sees everything as a fixed pie and leads to hoarding, envy, and stagnation in every aspect of life.
Learning to identify opportunities and getting the ability and confidence to act on them is a skill, though some of us come by it easier than others. It starts the same way: with the philosophy that the world is full of opportunity if only we can learn to recognize and take advantage of it.
 
Resources are scarce. Opportunities are not. People hoard resources because they see the world as fixed, and by extension, they see their nature as fixed. Believing that you are incapable of change is a self-fulfilling prophecy.
 
The abundance vs. scarcity mentality applies in many aspects of life: time preference is the preference to enjoy goods sooner rather than later. People with a scarcity mentality have a high time preference and struggle to save their salary for the future. People who save for their future have a low time preference because they can imagine the life of abundance that will result from forgoing current consumption.

Is a “dream job” just “capitalistic conditioning”?

This tweet raises a few questions:
 
  • Is working for the rest of one’s life a worthy goal?
  • Is work depressing? Should we strive for a life of work or something else?
  • Do “dream jobs” exist, and should we try to pursue them?
  • Is the idea of a “dream job” a form of “capitalistic conditioning”?
First, let’s consider the facts. 92% of Americans are satisfied with their job, and 57% said their job provides a sense of identity, while 40 percent said their job was just what they did for a living. Most people enjoy working to some extent, even if there is a large portion that isn’t. But maybe that is just “capitalistic conditioning”?
 
There are religious and philosophical perspectives on work, but let’s start with the facts: first, that human beings must work to live, and second, that the labor of others must first create all goods and services we consume. Until we invent robots capable of automating the economy, most people must labor for a large portion of their lives to enable our current living standard.
 
Faced with these facts, we have two options: to accept our share of responsibility in making human life possible or to try to shirk that responsibility and mooch off the labor of others. In this matter, I believe two things:
 
first, that we have a responsibility to create value for others
and second, that we have a right to enjoy the product of values that we create
 
This is a moral philosophy and observation of human nature: we thrive best when life balances work and play. Working all the time is a recipe for misery, but so is unlimited leisure.
 
While it is true that work is rewarding for many, we should also admit that it isn’t automatically rewarding. Not all work is enjoyable or meaningful. When I was in high school, I worked as a grocery store bagger for a short time. I enjoyed it and took pride in being the fastest bagger in the store. But I knew that it was just a teenage job for a year or two. If I had to bag groceries, or serve fast food, or work on a factory line for the rest of my life, I’d be miserable.
 
Under an industrial capitalist economy, many jobs are boring and meaningless. This is not unique to capitalism: there has been tedious, repetitive work as long as there have been humans. The difference with capitalism is that we can now appreciate that it doesn’t have to be so. Capitalism has created sufficient wealth to give us visible examples of intellectuals, artists, entrepreneurs, and others who need not perform any manual or rote labor. We complain because we know there is an alternative to boring jobs. Zebras don’t complain that they have to search for grass to eat all day, and lions don’t complain that they have to hunt all the time, but humans have noticed that some jobs are more interesting than others.
 
Capitalist economies have now been accumulating productivity-enhancing productive capital (factories, machines, tools, and more) for several hundred years, and the percentage of “fun” jobs keeps growing. In the distant past, 100% of people were hunter-gatherers. A few hundred years ago, 98% of Americans were subsidence farmers. Today, the vast majority of Americans need not perform any hard labor in our work. If we allowed them too, entrepreneurs would eventually create sufficient wealth and technology that all the “boring” jobs will be automated.
 
First, we invented the tool to amplify our muscles. With tools, we built machines to replace our muscles. Now we are building automatons to augment and replace our minds, and when we complete the transition, our mere wishes will turn desires into reality.
 
Boring jobs are a temporary feature as capitalist economies from pre-industrial to industrial to post-industrial information societies. For the vast majority of people, boring jobs ought to be a transitional feature during their lifetime. As we gain skills, we ought to grow in our careers to the best of our abilities.
 
I think this is where “capitalistic conditioning” goes wrong. It’s not capitalistic at all, but a derivation of the Prussian education system, which created the factory model of schooling to indoctrinate obedient factory workers and soldiers into obeying their orders. The capitalist model is the opposite of this mindset: an entrepreneurial attitude that focuses on personal experiences, local problems and opportunities, spontaneous order, and that questions all orthodoxy in search of innovation and profit.
 
I believe that a career progression ought to have two goals:
first, to reach a level of mastery where the challenge is entirely creative,
and second to build sufficient labor that any additional work is performed for its own sake rather than because we need the income.
 
This applies to all work. Regarding the first goal, consider an athlete. Superficially, the labor of an athlete is hugely physical. In the beginning, a junior athlete works at a physical level at the direction of a coach. However, as they develop, their physique is mastered, and more and more attention is directed to the mental aspect: the training regime, technique, and the inner mental game that makes a champion. Eventually, they may become a team lead, coach, or narrator of the sport.
 
Regarding the second goal, I remember many times when I felt tired of being a software developer. I enjoyed some aspects of my work, but I worked on many projects I had little interest in. However, from the age of 15, I had a goal of reaching financial independence. By my late 30’s, I accumulated enough passive income to ensure that I would never need to work to meet my family’s basic needs. Any additional labor I perform for the rest of my life will either afford a luxury or because the work is worthwhile in itself. If my investments are successful, even my luxuries will be covered by passive income, and I will only take on projects that I find meaningful and rewarding.
 
Today, I work as CTO, leading teams to build products I believe in. I wanted to be a CTO since I was a junior in college after I realized that a career as an aerospace engineer or an economist was not for me. My job is not perfect, and it’s not always fun, but I would like to do something very much like it, even if I wasn’t paid to do it, and I think that qualifies as a dream job.
 
I’ll close with a question for Awlmond – what is the alternative to a life of work?
 
Consumerism? Will you enjoy the goods and services that other people spend their life creating?
 
Political activism? Will you spend your time destroying the work others have created? (This is not to say that there are not causes worth supporting or institutions worth destroying, but life must be primarily about creation, not criticism, and creation is much harder.)
 
Artistry? With no meaningful struggle, what experience will your art be about?
 
Meditation? What will be the object of your mediation? What inner conflict will you seek to resolve?
 
Friendship? What will your conversations be about? What struggles will you bond over with friends?
 
There are many ways to view work, but ultimately, an unproductive life will leave you an empty shell of a human being.

 

High traffic WordPress architecture using AWS Lightsail

Here is how I built a high-performance WordPress website in AWS Lightsail for aier.org.  While low-traffic blogs can be hosted on a shared hosting service or a cheap VPC, if your site hosts millions of visitors each month, you will need a more ambitious service-oriented architecture.

The key to high-performance WordPress is a service-oriented architecture that splits the application into independent layers.  Amazon provides a reference architecture for high-performance WordPress hosting on AWS.  While this is a great start, all those services get expensive and complex to manage.  I wanted a lot fewer moving parts and to make things maintenance-free.  I also included important performance and management optimizations such as a dedicated editor server and git-based deployment.  To lower costs, I used AWS Lightsail and Cloudflare to get significant cost savings versus AWS’s EC2 and CloudFront-based reference architecture.

High-performance WordPress requirements for my project:

  • Lower the cost of hosting from well over $20K/year to under $1500/year while supporting many millions of monthly users.
  • Keep backend 100% available and fast regardless of traffic.
  • Highly available and highly scalable architecture: easy recovery from failure, and ability to quickly scale without any downtime.
  • Minimal administrative management overhead (the servers should maintain themselves after I set them up).
  • Minimal configuration – the server should be set up with just a few commands: I promised to build this out in two hours.
  • Git-based deployment process. Deploy website updates via git merge.

Process

Below, I explain why I used specific tools and configuration, then I’ll provide one technical details to help you do the same.

  1. Configure a basic WordPress hosting environment
  2. Migrate or build your WordPress site
  3. Upgrade the hosting environment for scalability
  4. Configure analytics and alerting tools

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Search Engine Optimization: Proven Strategies for Nonprofits in 2019

According to a recent survey by Zogby Interactive, the Internet is by far the most popular source of information and the preferred choice for news ahead of television, newspapers, and radio. The majority of Americans now prefer the Internet as their primary and most reliable source of news. Specifically, online publications are preferred over social media sites such as Facebook and Twitter.

If your mission is to influence opinions, the web cannot be ignored. You must achieve an effective online presence to be a part of conversations that matter. To discover content online, two sources dominate today; social media and search engines, specifically, Facebook and Google.

Publishers need to understand search engine trends to stay relevant

Google and Facebook dominate referral traffic to nearly all news sites today. As dynamic tech companies, Google and Facebook and constantly tweaking their algorithms, so online publishers need to stay informed.

Because the exact algorithms used by search engines and social media sites are secret and ever-changing, a mythology has arisen around the field of Search Engine Optimization or SEO. There are numerous online debates between “white hat” and “black hat” SEO “experts” who recommend and criticize technical tricks to improve search rankings. Because search engines and social feeds have the power to entirely kill most online businesses and publishers, an adversarial attitude dominates the thinking about SEO strategies.

Content is still king in online publishing

The reality is that content is still king. Creating interesting and relevant content that people want to watch or read is still by far the most important factor in the success of a website. The goal of search engines and social networks is not to destroy independent publishers or ruin businesses, but to provide value to their users by showing them the most relevant, reputable, and quality content. Content is key, but it needs to be organized and presented in a way that is easy for search engines to find it, understand what it’s about, and assess its quality.

Google and Facebook want to be your partner, not your adversary

It’s critical to understand that Google and Facebook want to tell you exactly how to be successful on their platform. Their need for secrecy on the details of their algorithm comes mainly from the need to deter malicious actors that attempt to get more traffic than the quality of their content merits. Google and Bing will tell you exactly how they see your website and suggest how to improve your search visibility. They want to work with publishers to promote higher-quality content and rewarding experiences for users.

As a publisher, Google’s Search Console and Bing’s Webmaster Tools is your most valuable asset for improving search performance. Furthermore, on-site content changes (“onsite SEO”) usually can have far more impact on search performance than external tweaks to search engines and link-building (“offsite SEO”).

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