“It’s important to have a sound idea, but the really important thing is the implementation” - Wilbur Ross (39th Secretary of Commerce)
There’s a long road ahead towards achieving the changes I’d like to see - I’m not capable of seeing it in its entirety, but I do have a sense of what the steps are for myself as an individual.
Roadmap
Educate myself
Knowledge is powerful - it also builds credibility
Communicating effectively is a skill
Enter the financial world
I need to understand it in order to improve it
Having an influential network is critical
Become independent
Financially - it’s difficult to be independent in other forms
Being able to walk away needs to be an option
Work in the trenches and/or publicly
There’s a lot of work, and it’s not all glamorous
Part of the process will be rallying troops to the cause - some of that work will have to be public interactions
Organize people and frameworks for work to continue
Removing roadblocks and providing a plan for moving forward is part of the work of a manager/director - I will get there
Take a step back
At some point I’ll move on to something else
These steps lack detail - it was intentional. I don’t know that this is the path that I’ll take. This is roadmap version 1.1. As implementation occurs, I’ll check things off. As the long-term plan changes, the deliverables will change. But one way or another, I will reach step 6 and move on to something new. Along the way, there are certain fixed objectives. Among them are three major goals:
- To produce impactful content that enables people to understand the complex issues and systems that make up our world
- To create resources and frameworks that enable people to move towards their goals
- To become financially independent
So, I'm going to try to flesh them out a bit.
Impactful Content
When I was in high school, my economics teacher, Mr. Hodgson, showed a video to explain the U.S. Housing Crisis in about 10 minutes. At the time, I already had a relatively strong understanding of how things had gone wrong, so the video wasn’t all that new in terms of information for me. What struck me about it was how coherent and aesthetically pleasing the presentation of the information was.
Here we are several years down the line, and, while there’s a great deal more visualization work being done, I think we can do better. Particularly in the space of financial literacy. One of the most significant problems facing the world today is wealth inequality(What is wealth?). Wealth inequality peaked during the late 1920s just before the onset of the Great Depression. Following the Depression, the percentage of total wealth held by the top 1% fell for the next ~45 years. Since the mid to late 70s, that share has been increasing steadily until now, when the gap is as large as it was in the 20s. In my opinion, a large contributor to this growth has been a lack of widespread integration of financial literacy education into the standard curriculum of schools.
As the world has become more technologically advanced, the availability of information and data has reached unprecedented levels. We have nearly all of the collective knowledge of the entire human race available to us in the palm of our hands without even needing to touch a button. And yet, so many people are ignorant of how the financial world functions. If we’re not in a position to understand how and why financial entities, such as banks, function the way they do, then we’re certainly not in a position to vilify them, let alone interact with them effectively. So, in my mind, the first step is making the financial world easy to understand.
I recognize that much of this process will involve oversimplification of highly complex issues with deeply interconnected stakeholders. However, I also recognize that maintaining the ignorance of the lower wealth brackets is something that the upper wealth brackets have a vested interest in. Politics, compensation, and taxes are perhaps the most visible symptoms of this issue. So, despite the difficulties and despite the inevitable pushback, we have to start somewhere. I’m starting here.
Build tools for success
I’d love to use the word privilege but I think it’s become overused at this point, so I’ll settle for a metaphor. It has become increasingly apparent to me that I live within a bubble. Inside of the bubble a few things hold true:
My survival is not threatened.
There are no walls keeping me from being free to walk any path that I choose.
Knowledge is in abundance, so there is a means of bypassing any walls that would seem insurmountable.
I have an extremely limited ability to understand the perspectives of those outside of the bubble.
This bubble is where I live because I grew up with a loving family. Because I somehow won the genetic lottery and came out intelligent enough to do relatively well for myself. Because I live in the United States. And, perhaps most importantly, because I go to MIT. The fact is, my position in life is largely due to luck. I’m not naïve enough to think that “hard work” and “doing the right things” is what’s gotten me here. I’ve just lived a charmed life. So, where am I going with this…
That knowledge of how to bypass walls and roadblocks is something that I’ve taken for granted. It is easy to Google “How to…”. But, you have to know what you’re looking for. And just as importantly, you have to have the time to look for it. There are millions of people around the world who simply don’t have time to consider how to get past the walls in their life. And granted, some of that is due to being lazy. Humans are lazy sometimes - I’m lazy a lot of the time. But even if you account for that, sometimes what you need to do to move forward simply isn’t obvious. I want to lower the activation energy - to tear down as many walls as possible.
My skills and knowledge base are mostly applicable to the business and financial world. Therefore, building tools that help people take first steps in the right direction is something I am capable of. Furthermore, I am capable of building tools that are user friendly as well as affordable. Some might be as simple as guiding someone through the creation of a business model - What’s your product? What goes into producing it? Who are you selling it to? - and the follow-up questions that might be less obvious. The bottom line is that it needs to be easier to figure out what the cost and benefit of what you’re doing is. If that doing is working a 9 to 5 job and then following it up with a 6 to 11 job to make ends meet - you need to be able to see that on paper. If you have an idea that you’d like to turn into a business - you need to be able to find out, roughly, how much work it’s going to take to reach your goals. Because everyone needs to be in a position to say, I want to do this or I don’t want to do this. The tragedy is that in the midst of day to day work that allows the majority of people to make it through life, these questions aren’t being asked, let alone answered. I’d like to work towards fixing that.
Financial Independence
“A tragic irony of life is that we so often achieve success or financial independence after the chief reason for which we sought it has passed away.” - Ellen Glasgow
That quote represents one of my biggest fears - that after working hard to achieve my independence and be completely free to work towards my goals, I will have missed the chance to work towards those goals. That said, my intention is to reach this goal independently of impacting the world the way I’d like to. This is a very fine and important point, one that’s worthy of more discussion, but I don’t think I’m going to dive into it here.
To explain what financial independence means to me in simple terms - it's passive income that exceeds my cost of living. While on one hand volume does solve many problems, I think I’m a bit away from having the level of capital required to live off dividends and interest. Given that, I intend to start with building a system for the automation of investment research and analysis as well as of the portfolio construction and rebalancing process. Some of the tools required to build the system I have in mind are at my disposal, while some rely on skills that I haven’t developed yet. So, it will take time, but I’ll get there.
Once the system is in place, it’s a matter of building volume - so, time. If you want to be involved in the process, I welcome input.