# The Las Vegas Rules I: The Slightly Malevolent Universe

Update: Greg Rader pointed out over email that my diagram was messed up in Economics 101 terms: the production frontier is usually convex and the utility/indifference curves concave. I had things the other way around. Total sloppiness on my part. In fixing the picture, an additional insight struck me: the normal outcome of such diagrams usually the achievable optimum somewhere in the middle, where it can “kiss” the most valuable concave utility curve. The interesting thing is that it is much easier to gamble with a surplus of money or a surplus of time, than it is to gamble with an optimal mix. This suggests WHY lifestyle design may be hard: you have to move away from your current optimum in order to gamble effectively. The normal way is to work harder than you want to, in order to accumulate the surplus money to gamble with. Lifestyle design moves away from the optimum in a different direction.

I’ve been thinking  and writing about the idea of lifestyle businesses and lifestyle design for several years now, and attempting to actually play the game for a few months.  It is not easy, and I have not been satisfied with how others have been framing the subject. In particular, I have been disturbed by the “anyone can do this, guaranteed” attitude of cheery optimism around the subject. Unqualified optimism of any sort immediately makes me skeptical.  Perhaps this is because I am an engineer both by training and philosophical inclination. Engineering knowledge is usually expressed in terms of fundamental limits, conservation laws and constraints. So it was natural for me to frame the challenge of lifestyle design for myself with this time-money Pareto frontier diagram.

I’ve been criticized in the past for talking a lot about lifestyle design, and critiquing others’ ideas, but never actually adopting a definite position myself. So I am about to start taking one. In honor of my new home and the central role of gambling and risk-taking in my model, I am calling it the Las Vegas Rules.

I am going to bite off one little piece at a time, and point out differences compared to other models as I go along. This time, I just want to talk about the role of gambling in lifestyle design.

The Gambler’s Frontier

For those of you who are not familiar with the concept, a Pareto frontier represents a tradeoff constraint between two or more variables, time and money in this case.  If you are inside the boundary, you can increase both money and time in deterministic ways until you hit the frontier, but if you are on the frontier  you can only increase time at the expense of money, and vice versa. There is only one way to break out to the promised land beyond the Gambler’s Frontier, where you can have both money and time, and that is to gamble.

The red arrow is the new element in the picture, historically speaking, and represents my definition of lifestyle design: lifestyle design is gambling with time.

I’ll unpack that definition as I write more about this subject, but the basic idea is that the time-rich/cash-poor have an opportunity to gamble and place bets in ways they were never able to before. To repeat the biggest cliche in the lifestyle design movement, all you need is a laptop and an Internet connection.

Blogging is time-gambling. Answering questions on Quora or Stack Overflow is time-gambling. Fixing bugs in an open-source movement is time-gambling.

Money gambling generally yields direct returns in the form of cash flows. Time gambling generally yields indirect returns in the form of captive attention and social capital, which isn’t particularly easy to turn into cash, but it can be done (in very direct ways, as you guys have helped me demonstrate, to the tune of about $1800 so far, for 2011). The indirect value is even higher, but more uncertain (all the consulting leads I’ve received have been directly or indirectly a result of this blog). I think the reason so many people are over-optimistic about the potential of lifestyle design and lifestyle businesses is that they underestimate the amount of gambling involved. So it is important to understand what it means to gamble in this context. The Basics of Gambling Gambling is decision-making under conditions of information deficit. When you’ve squeezed all you can out of what you know and are left with noise, and still have choices left to make, and end up choosing randomly, you are gambling. Gambling is for people who are out of ideas, but have resources left to invest. This sounds terrible, but having a mind free of ideas and resources left to play with is one good definition of liberty. To have ideas without resources to place bets, is to be trapped. There are two kinds of resources you can gamble with: time and money. It used to be much easier to gamble with money than with time. That is what has changed in recent times, hence my definition. Newbie drinkers of the 4-hour Kool-Aid don’t seem to get this. They think lifestyle design is a guaranteed path out of their crappy lives in cubicle prisons and the burden of the middle-class life script, mortgage and all. A question I recently answered on Quora very clearly reveals the mental model many people have: Is it hard to build, market and maintain a web app that makes at least$1000 a month?

The question is heartwarming. It showcases a simple aspiration, a desire for a reasonable lifestyle based on trading time and creative effort for an income-generating capital asset and autonomy.

The goal is modest: a mere $1000/month passive cash flow, not millions. Just about enough to live very comfortably in (say) Bali, a place that have achieved a sort of mythic Shangri-La/El Dorado status for the lifestyle-design crowd. What struck me very forcefully about the question was the extent to which it failed to acknowledge that any business idea is a gamble. Without an element of gambling, the sort of lifestyle design model implicit in the question is far worse than the regular middle class lifestyle. If you are not willing to gamble, you shouldn’t attempt lifestyle design. Your paycheck is a much better deal. Engineers make this mistake most often; they assume that marketing is 99% a matter of pure skill, like engineering, that you can always lower the uncertainty by thinking harder and smarter. They don’t realize that marketing is at least 50% gambling. When you’ve done all the smartest marketing thinking you are capable of, half your uncertainty is still there. The best you can do is choose randomly. You can tell an engineer asked this question even without reading further, because the question asks about how hard the work is. The gambler/marketer version of such questions is always how lucky do you have to be? The engineer asks about effort. The gambler/marketer asks about odds, and picks the game with the most favorable odds that he can find. 2/3 is better than 1/2. If I’d asked the question, I’d have phrased it as: how many apps do you have to publish in order to be fairly sure of having at least one hit that makes$1000 or more a month?

Lifestyle design isn’t a path to freedom. It is an opportunity to gamble your way to freedom. Which means you can lose, and end up worse off than if you had taken the traditional paycheck route. But unlike in the middle-class paycheck life, you have a non-zero chance of coming out on top.

A Slightly Malevolent Universe

Your attitude towards gambling naturally encompasses your views about the benevolence or malevolence of the universe. If you think random moves always pay off, you believe in a benevolent universe. If you believe they always backfire, you believe in a malevolent universe. I believe in a slightly malevolent universe. One where random moves backfire slightly more often than they pay off. I have a whole pseudo-scientific theology behind this belief, based on the laws of thermodynamics.

When you play against the universe, you may win occasionally in the short term, but over time, the slight edge that malevolence has will defeat you. If you can stay ahead for a human lifetime, you’re done.  This is one reason why gambling games have such a primal appeal for us. They seem to mimic the universe.

When I arrived at this gambling-based definition of lifestyle design after some tortuous thinking, I felt a sense of relief. Here was a definition a no-free-luncher like me could live with. There were no perpetual motion machines here.

In writing my answer to the Quora question, I had to make up a reasonable comparison with a paycheck lifestyle. Working through some back-of-the-envelope numbers for the answer, I was struck by two things: just how truly confining the standard American middle-class life script is, and just how much money it takes to break it if you want to avoid the “design” part of lifestyle design and simply find a different way to pay for the same script.

The odds of lifestyle design time-gambling are stacked in such a way that you MUST break the middle-class life script, at least temporarily, in order to have a shot at coming out on top.

Middle-class life scripts emerge from a more basic implicit construct I’ll call the middle-class social contract. I’ll cover those next time. Breaking the script is about wriggling out of the contract.

Yes, I am starting a new series. And yes, there’s a danger I might abandon it halfway, either because I can’t keep it going, or because the model fails for me, or because it doesn’t do well enough to be worth continuing. It’s a time-gamble.

Venkat is the founder and editor-in-chief of ribbonfarm. Follow him on Twitter

1. Ben says:

A slightly malevolent universe. A slightly evil mailing list. What is it with you and “slightly”? I understand people have a tendency to be melodramatic about these topics so a can’t fault you for working to keep it sane, but part of me feels like you’re afraid to commit fully to these ideas. Still, better to be indeterminate then to fall off the deep end and have you waste my time ranting and raving about the totally malevolent universe out there.

• Max says:

I favor the ‘slightly’ element because it’s difficult for me, as a person with (A) free will and agency, and (B) a brain/mind, to submit entirely to a ‘malevolence’ in an inanimate universe. I mean, mice and lions and dolphins, or Paul the Octopus, are varying levels of sentience in the otherwise insentient (as we know/perceive it) Universe of rocks and cosmick dusts. This is admittedly a philosophical approach, but then again, that’s what we _do_. I have a hard time with either-ors of “commitment” — commitment is not equivalent to a prison or fetter much less a some-such virtue; it is simply a willed constraint.

• Josh W says:

I suggest two options; either Venkat really believes in being evil to suit a malevolent universe that will always make bets fail,

or he finds it’s nice to moderate a distinctive and emotionally saturated word rather than trying to build up emotional resonance in a mild one.

• Josh W says:

Ooh, I detect a failure in my humour-detector. Scratch that!

2. Annie says:

I think this is brilliant, and I agree with your paradigm of a slightly malevolent universe. I also agree with your conclusion about the difficulty of getting out of the middle-class script. I spent many years trying to “buy” my way out, i.e., saving up enough to coast free, but eventually realized that was never going to happen (unless I won the lottery) and I needed to gamble on just walking away.

Money is an accounting of time but the middle-class script fools you into believing that you can substitute money for time altogether, and ultimately, you can’t. Time is more valuable than money, it’s the real thing as opposed to merely a representation of it. Gambling with time is a tough choice because you can’t get more of it if you blow it, and that’s what makes the script so difficult to walk away from.

3. This is very very interesting. I like to play the Devil’s advocate at times, in order to play, really. Play with ideas. But, I’ll be serious. I like these archetypes you play with. I actually like the archetype of the barbarian. One thing I would like to point out though, is that they were for the most part illiterate. Even the Normans who Conquered England in the battle of Hastings were illiterate. I think that was to their advantage. Another archetype you employ is that of the sociopath. I actually like that also. Its a fertile idea. Its stimulating. I think the two are related.

To be an illiterate sociopath intent on conquering the World is to be a magical thinker. Its totally irrational. But I think The four hour cool aide guy is a barbarian. He taps into that archetype. He goes in almost blind to situations of all most unbelievably stacked odds, and constructs a plan by the seat of his pants and then wins. He won a national kickboxing competition this way. Some would say he won ugly, some would say Genghis Khan won ugly but either way they won. Ferris, dehydrated him self weighed in at a lower weight class, rehydrated himself and then shoved around people smaller than he and beat everyone. So the salient technique that utilized his peculiar skill set was his ability to rehydrate himself.

Rules can be like dead weight. too much logical rational thinking can be also. But then you have the question of reproducibility, which the scientific method is based on. But really what if a lot of this stuff is accomplished through magical thinking? Genghis Khan had a personal myth that he was this amazing being. I don’t think he had much of a plan. He was just stubbornly committed to his myth. He was a total narcissist and he could think on his feet.

You can go back and reconstruct this type of thing, using logical tools of analysis, but its all after the fact. But anyway I know a hippy New age dancer guy that went to Bali broke on a one way ticket to test his idea of the Universe, which roughly corresponds to “the Secret” and you can say its all B.S. because its totally illogical and I would agree, but nevertheless it worked for him. Because that’s his mindset. He ended up with a mansion and a full time organic chef on staff. Then he left Bali when he got bored. You can look him up on the internet “Otis Funkmeyer” is his name.

I’ve done similar things. I was living in Anchorage Alaska and hated it and so thought I would go to Seattle, I had $200 in my pocket and so I just started walking. I kept the goal in mind the whole time and two weeks later I was there. What is the logic of that? There is none. Its magic. What would it be like to be illiterate in a Civilized World • I agree that partially unfalsifiable narratives are necessary to actually drive decision-making (that was a major theme in Tempo). In fact even the falsifiable part may not be usefully falsifiable in real time. So a decision-story has falsifiable-in-real-time, falsifiable-with-delay and unfalsifiable parts. That last part can and should contain whatever magic works for you, whether it is delusions of grandeur or rubbing a rabbit’s foot. Naive calculative rationality is deadweight under those conditions. It is simply too slow and introduces an alien tempo (a slow, detached one) into the one required to actually drive action (which might need to be frantic and very emotional). But I don’t think those narratives are particularly useful to share after the fact unless they are cleaned up, with falsifiability-based proof standards. In fact they are dangerous, because real-time decision-making narratives are highly context sensitive and path dependent. There are only two types of worthwhile sharing: critical biographies/autobiographies/fictionalized accounts (so people get the fully contextualized story instead of the self-serving hagiography, and are able to absorb the gestalt of the implicit intelligence in your story) and actual nuggets that have been subjected to more rigorous analysis and proven to be portable across narratives. That’s what annoys me about The Secret and 4-hour work week. They insult their readers’ intelligence and offer up intellectually dishonest crud. For me, I like to do the nugget extraction method, mainly because my personal story is simply not interesting enough to tell. Actually, as far as sharing the whole story goes, a critical fictionalized account often captures 100x more truth than even the most careful critical and ironic biography. David Milch’s fictional Deadwood in many ways captures more truths from that historical period than the actual history does. • I think I could mine some some useful things out of these narratives. On my trip, across Alaska and the Yukon, I was having fun. My energy was contagious. So people sensed I had an interesting story to tell. So I created value for them. Without asking for anything at any time in my journey(I never stuck out my thumb), people continuously gave me rides, shelter, food, part time work and cash. I decided at some point to draw pictures for them, little nature drawings, cartoons. Its a common fantasy for people to just chuck everything and have an adventure. When people see someone actually doing that they want to be a part of it and so they do. They become part of the story. So the take away is create an exciting adventure narrative that others will want to be part of vicariously or by providing material support. Anyway it worked, but I didn’t plan any of it. I’m outgoing and talkative and have a pleasant personality.So I attracted people. As far as the Barbarians go, I have given that some thought too. They weren’t really creating value so much as appropriating it from others. But they had their own kind of magical thinking. I think they saw the world in a completely different way than modern people. I believe they were mystics. Its hard reconstruct how they thought because being illiterate they left no autobiographies. But as you pointed out in your earlier article on Veblen, the plains Indians were on their way to becoming barbarians and we do have record of interviews with warriors and Indian Chiefs that gives insight into how they thought. I think its possible to gain insight into the mind of Crazy Horse or Geronimo. My insight is that they were in an alpha brain wave state nearly all the time. They lived in a waking dream world and that was their secret in battle. Their success in battle began with a powerful vision they had at some early time they they believed was prophetic. The vision opened up to them a deeper more fluid layer of reality and they would recreate this mental state in battle. So in the midst of battle they were able to be not only completely fearless but extremely creative. So what is the take away of this? The take away is that being a “worker” in the modern world doesn’t cultivate alpha bran waves but rather Beta. Successful entrepreneurs, however operate from alpha brainwaves. That is why they are creative and unconventional. That’s why they are able to take risks. From the sociopath angle, I think in a sense the Corporate Sociopath is a Barbarian in the sense of being illiterate. Because they don’t employ language in the same way. They don’t understand syntax. So they aren’t held back by getting bogged down with rules. They get called liars. But really they just use language differently. But its not so much a formula you can teach people wrote. You really do have to tap into these archetypes and spend time in a more archaic place in your brain. I think decision making really is key, though because that’s almost all it really comes down to. The decision is prior to the logic. If you have logic and no decision you have nothing. That mindset keeps people from starting, keeps people in the security of their sucky jobs. 4. Time gambling is a great model, but I think you’re missing a distinction: when you gamble your money, you can play games with zero learning benefit (slot machines) or with a positive learning benefit (poker.) When you gamble with your time, you can easily stunt your learning by doing the same things (affiliate websites, law of attraction) or you can increase your learning by tackling bigger things (disruptive startups, help nonprofits). The result of the positive learning gambles is to move the Gambler’s frontier to the right: when you fail at a disruptive startup, the relationships and experiences probably increased your maximum middle class money. But this also lowers your risk taking behavior, because you have more to lose. So the best strategy may be to intentionally keep your curve as far to the left as possible, making the middle class option less desirable. But if keeping your learning low is necessary to do this, you also end up with a lower chance of reaching the goal. Whats better, then: moving your curve as close to the goal as possible, making your success more probable but harder, or moving your curve away from the goal, making your success less likely but easier to attempt? 5. Here is my take on gambling: People say that creating your own reality is obviously absolute B.S. for the simple fact that if true you could just walk into a Casino and emerge a few hours later with a million dollars. Here is the problem: You are running up against a competing narrative, a narrative that has become very solid over time and so its like running into a brick wall. Here the fantasy the owners of the Casino are living: They are living a fantasy where people voluntarily give them millions and millions of dollars. You must admit that as far as narratives go, it has a lot of which to lend itself. So they have created this pattern, this system and every time it works its becomes more and more solid. Its all just quantum particles but in this case they have coalesced into a pattern. That’s all anything is-a pattern of energy. So this pattern is really really strong, from long success of being carried out successfully over and over again. Its scalability and reproducibility is proven by the fact that Casinos are opening up everywhere. You could say it is magnetic. It attracts money. So here is your competing pattern as you walk into the Casino: You will beat the odds and win oodles of money. The magnetism here is weak. Its a weak pattern that will collapse quickly and become part of the larger more powerful pattern of the Casino. The reality of this is born out daily. You are a sucker if you gamble at a Casino or play the lottery. They are incorporating your pattern into their larger more powerful pattern. You aren’t playing your own game but rather their game. To be a Barbarian you have to play your own game and thus be a game changer. • I think rational narratives in gambling that aren’t obviously ludicrous involve utility rather than money. The casinos are in the money business. Humans are always in the utility business. So gambling at slots expecting to get an ROI that beats the stock market is silly. But gambling at slots expecting to while away an hour or two with money you don’t mind losing, for pure entertainment (and the irregular reinforcement schedule with fun bells and whistles is actually quite fun, more so than the average bad TV program or movie for instance) and a small chance of having a nice payoff? That’s rational. Gambling at really bad odds for a really big outcome versus maximizing your expected return by picking the right bets is dumb, if maximizing MONEY returns is the goal. If OTOH, only the big outcome can save your home from foreclosure and the little ones aren’t going to help, and you’re out of options, it makes sense to bet it all on the slim chance. I recently learned some surprising statistics about the kinds of people who gamble. They aren’t the clueless idiots desperately hoping to get lucky. They are usually somewhat well off, and are very aware of the casino’s financial model and usually have some sort of rational counter-narrative like the entertainment one. • Bill Bennett would be a good example of a rich guy gambling for entertainment. I understand he had a$500,000 a year gambling habit at one time. He caught a lot of flack for it after writing “The Book of Virtues.”

I think it varies in terms of how much a suckers game it is. Poker involves a lot of skill. As far as the prospects of winning at certain games by big by being some type a mathematics savant, you can end up in jail for a very long time. Its amazing how draconian the laws are for people caught “cheating” at gambling. Its way out of proportion to penalties for other types of fraud.

The lottery is perhaps the biggest suckers game. I never worked at a Gas Station, but when I was in college, I had an idea once, that if I ever did I would bet everyone that bought a scratch off $10 that they are going to lose. I’d make them put the money on the table before they scratched their ticket. No doubt that would be bad for business and get me fired but it would be unbelievably excellent odds in my favor. 6. Maus says: I’m not an engineer, but I like how they think about things. Two concepts that I especially appreciate are “testing to destruction” and LD50. Finding the failure point of a reaction seems to me to be somewhat analogous to a gambler determinging the odds. But both are very difficult to apply to the experiment of lifestyle design. As a somewhat cynical observer, one of my biggest problems with the egalitarian optimism of 4HWW and others of its ilk is the notion advanced by Ferriss that someone contemplating lifestyle design can perform a counter-factual thought experiment to determine the worst case scenario. The fruit of the experiment is meant to be the realization that failure wouldn’t be so bad. That is is only fear of fear that is holding one back. Ferris essentially claims that at worst you’ll be back to square one, with no real loss. But in a slightly malevolent universe (which I agree is what we’ve got, but for different reasons than your own), restoration to the zero state is not the outcome of failure. Just as friction or air drag impacts dynamic systems to bleed energy, breaking away from the middle class paradigm to risk a successful lifestyle design cultivates countervailing forces (like resentment, pique, or jealousy) that magnify the effect of failure. It may be that younger individuals have less to lose and more time to recover, thus rendering the effect de minimis. But it’s usually the older person, with more to lose and less time to recover, that chafes the most at the middle class paradigm and is accordingly most tempted by the disingenuous promises of lifestyle design. • I like your essentially entropic argument about why the worst-case outcome does not represent a reversible loss. There are costs to these experiments. Time costs. Aging costs. Burned-bridges costs (if you are one of those lifestyle designers who is writing some ranting idiotic blog cursing and bad-mouthing traditional employment everyday while hypocritically making your money of that same world). 7. As a relatively busy guy, I can say I’m much more likely to gamble with time than with money. The examples of time gambling all seem pretty fun and seem to have some intrinsic value. Ribbonfarm would still be a worthy pursuit even if it didn’t produce consulting clients (you might have less time to spend on it…) the same thing is not true for all blogs. Those exiting from the bottom of the curve tend to the be outspoken on the webs and the more annoying– I think what the 4HWW did well was challenge people further along in their scripts to recognize them in the first place, especially those with money or assets. For those at the top end of the curve (those with money) they have the opportunity to gamble their assets– the cliche there is “automate your business.” I was talking to a friend about this article he said he thought poker against others might be a better metaphor (although thats zero sum, which entrepreneurship isn’t). I’m not convinced the odds involved in starting businesses (or risking your time on the side) are necessarily less clear than those of having a career. I agree with your point about breaking from the script– but that’s also a broader point about entrepreneurship in general. I’m fascinated to see how this progresses. I’m still not convinced that the 4HWW is sensationalized or unrealistic– my sense about it is that Tim truly revealed some extraordinary approaches to income generation, many of which have only been possible in the past 5-10 years max. • I’ll probably figure out my general uneasiness about 4HWW soon. I don’t think it is unrealistic. Like any other model, I am sure it is workable for some fairly large set of people under fairly broad conditions (i..e. it is workable and not a corner case). I think something else is bothering me. There is something very zero-sum about the thinking there. Kinda like the same reason that the PUA community bothers me. As with 4HWW, I am sure the methods and models work for some fairly large group under fairly broad conditions. It still bothers me. • I think I can help point you in the zero-sum direction. Both 4HWW and PUA are market hacks in that they exploit market inefficiencies with minimal barriers to entry. They are not creating true wealth except to the degree that they stimulate the market to become more efficient, and in making the market more efficient they are eliminating the conditions that made them profitable in the first place. The fallacy is in believing that these hacks are sustainable strategies. It is quite appropriate that the 4HWW crowd has adopted the term arbitrage in various forms (geo-arbitrage, etc). There is nothing inherently wrong with arbitrage, but arbitrage opportunities close rapidly…more rapidly the more liquid the market. When you are operating in financial markets arbitrage opportunities sometimes close in fractions of a second (ex. stock A is momentarily for less on the NYSE than on the NASDAQ, simultaneously buy on NYSE and sell on NASDAQ). 4HWW and PUA opportunities obviously won’t close that quickly, but the more mainstream these strategies become, the less “profitable” they will be. That isn’t a problem for the proprietors of the strategies. They can make money exploiting it once and then make a killing selling the “How To” guide to everyone else. But everyone late to the party will have much less success. Of the two, I would say PUA is the more liquid and therefore the more zero-sum (less sustainable). There are absolutely no barriers to entry so anyone with an internet connection can start studying and testing the various techniques. If you buy a$25 ebook and think that is going to give you an advantage over the next guy at the local nightclub (particularly this many years after The Game went mainstream) then you deserve the results you will get.

4HWW rests on more substantial inefficiencies but they are eroding as well. Every time a new platform or service opens up offering outsourcing and personal assistants, the market becomes more liquid and the arbitrage opportunity diminishes. Every time an ecommerce marketplace launches offering easy connections to contract manufacturers, the barriers to entry decrease and the arbitrage opportunity diminishes. Every time a web start up launches a free service automating your email list or hosting your info-product sales infrastructure, the psychological barriers decrease and the arbitrage opportunity diminishes.

In the long run 4HWW is a lot like ‘social’. It’s not a business or a strategy. It is a temporary opportunity to get ahead and plant your stake in the ground before everyone else catches up and it becomes standard business practice.

And I’m spent. I had no idea I had that kind or rant in me tonight ;)

• Wow, you’re on an insight role here Greg. I think you nailed it! Beyond the unsustainability itself (which doesn’t bother me much, all competitive advantage is transient), it is the sense that no real wealth or value is being created anywhere. It is philosophically important for me at least to create.

In other activities, even if margins are unsustainable and the sector commoditizes, the value generation is still intact. It has merely become efficient.

• Right, the value is actually created by the people who close the loophole that the 4HWW or PUA type exploits. In order for 4HWW strategies to continue to provide competitive advantage, the market must remain inefficient/mispriced.

It is the companies that create products, services and platforms that fix the mispricing that actually create value. Odesk dramatically reduces the competitive advantage of outsourcing by enabling anyone to participate and thereby creates a dramatically more efficient market. That is the value creation.

• it’s tough to believe that this is where your unease rests. first– i think it’s a bit of a straw man to build up 4HWW approaches as if they were a business in and of themselves (although a how-to business does have potential to create some value)…. sustainability is also an odd term to attach to this stuff– does the concert promoter make you equality uneasy because his product is delivered in one evening? also 4HWW strategies, regardless of their lasting effectiveness, are meant to be applied to people’s lives and businesses who ostensibly are creating the kind of sustainable value you are talking about…

also just as an aside i think it’s inaccurate in regards to the PUA information (and social psychology in general) that their inherent value goes down the more people who know it. the business of selling the stuff could apex and diminish, but i think that’s a separate issue.

8. I’m curious about the zero-sum thing. I haven’t yet seen things from that angle. I often think like Paul does here:

http://www.paulgraham.com/wealth.html

9. Thanks for the shout out.
I agree with the additional insight that it is easier to gamble (or invest) from an excess of one or the other than from a balanced position. The problem with taking the ‘surplus of money’ route is that cultural forces generally encourage excessive consumption, safe investments, or very stupid (zero/negative-sum) forms of gambling.

For example, a significant proportion of financial professionals are actively trading in the financial markets. These people think they are exceptions to the conventional investing wisdom because they know what they are doing. The truth is they are gambling just like everyone, they are gambling in a negative sum game (after fees), and their gambling habit also occupies a significant amount of their time.

To some degree, the lifestyle design model works because social/cultural pressures haven’t yet subverted it. If you are investing all your time in getting some project off the ground your peers usually back off (or you are such a recluse that they have no opportunity to badger you). If you dedicate all your time to earning money and try to save that money you will be constantly tempted by peers who are more spendthrift – “you can’t afford one drink, really?”.

Why do so many lifestyle designers move to far away places? The obvious reason is that the cost of living is less. The less obvious reason is that there are fewer social pressures, fewer people saying, “You don’t have JOB! You can’t give up one afternoon to go to X?”

• Greg– fantastic last point there that I relate to. I never left home for the cost– I left for the excitement and the learning. I think the default attitude in the US is new people are liabilities, especially in terms of time. Whereas overseas the default position is that new people are opportunities. What I’ve discovered is that as an expat it’s very easy to protect your time for creative projects. It’s also easy to find friends to do spontaneous and time intensive projects, trips, or get-togethers.

• +1 on that last point. The pressure from family and friends to move to a money-over-time surplus style and the “you have no job!” intrusion is a big one.

I have a related theme on my list for future exploration, the anchoring bias effect of “regular” lifestyles. Lifestyle Design 101 always begins as a perturbation of “regular” lifestyles. To make a radical leap, a radical change in situation may be required, if not for yourself, then to demonstrate seriousness to people around you.

My road trip was a minor attempt to achieve just such a non-incremental jump beyond minor perturbations. Moving to a different country is not feasible for everyone, but it is still possibly to knock your life out of a rut using other shock tactics.

There, I have a title: “Lifestyle Shocks” …

• I think you are definately onto something there! I tend to think that what you are tapping into is a more intuitive way of navigating that’s actually superior. Joseph Campbell called it “following your bliss” maybe that’s too touchy feely/ new agey than your more rational style. But still you definitely come up against people pressuring you to continue on the path of conformity when you follow your dreams and carve out your own path.

• Josh W says:

“Following your bliss” to me, is a mixing directed and random steps and seeing if the changes make you feel better. In other words it’s incremental because it is done by feel, which is in this case pretty close to touch:
It doesn’t have range to see further-afield advantages because it doesn’t involve a mental picture of what your bliss actually entails.

The advantage of this system is that it’s not tricked by the usual problems of importing a bad model, picking up someone elses ideas of happyness that do not in any way predict your own.

As something to mix with more intentional model creation, and as a line of evidence with which to falsify “what I think will make you happy”, it’s great. By itself, and without external churn and changing oppertunities, it can lead to cast-iron comfort zones.

• I’m about to relocate from Europe to Asia. Most of my energy is spent these days in battle with old mental models for dealing with stuff, payed services, and relationships. These “shocks” are the real pain of a lifestyle change.

There was this zen-guy once who used a rowing boat to dump all his stuff in the middle of the lake. Done. Not so easy for mortals.

10. One more point that we all somehow missed (unless some of the comments I quickly skimmed mentioned it): the tax benefit to investing in a surplus of time (over money) is enormous. This strategy incurs virtually no tax consequences until such a point as you actually start converting your time investments into money. In the mean time though, time investments are completely impervious to big brother. It is as if 100% of your savings went into tax-deductible AND tax-deferred accounts.

This is also an unrecognized benefit of the “scale first, monetize later” strategy in the venture/start up world. If you are profitable from day one then the gov’t is taking a cut from day one, inhibiting your ability to compound your investments. But, the gov’t can’t tax new users or page views. Companies like Facebook and Twitter are essentially reinvesting 100% of their “profits” with no tax consequences whatsoever until such a point as they can really crank the revenue firehose. At that point they are so big that they can afford to hire teams of people to manage tax consequences…or just go IPO, cash out, and let the public own the stock once taxes start taking a bite out of your reinvested capital (and thereby growth rates).

But the “time surplus” model actually beats the start up implementation because you can’t be taxed for anything. No social security payroll taxes, no medicare…for that matter, almost no sales taxes because your spending habits will be curtailed. You essentially take yourself out of the domain of gov’t trackable activity and, as a result, nearly all of the time surplus can be reinvested. Exponential compounding is your friend in a huge way.

• Excellent point. The tax benefits are something I hadn’t thought about at all. In an imaginary weird country where I’d have to pay myself at least minimum (or worse market) wages for investing in my own projects, things like my blog/book would be non-starters.

• Credit where due: you had thought about it to some degree because I was reading some of your posts from the trailmeme blog earlier in the day, before writing the comment above, and one of those posts definitely planted the seed of the idea.

11. what’s the middle class construct based on? you are not given freedom but you can buy it for trading 5 days of your life for it?

• To the extent that it is based on any one thing, I’d say it is based on the same thing political social contracts are: guaranteed protection against certain risks. To sign up, you give away certain opportunities. Everything else follows.

12. Love this, but I’d like to hear more about the middle-class social contract and script. Why? All the great ideas you present here are worthless when people are shackled by their middle-class beliefs and expectations. I’ll bet you have some great ideas on how to get people beyond the religion of middle-class.