Did your Grandfather take Risks?
By January 30, 2022– Published on
Every month I meet with a small group of fellow entrepreneurs, I call it my Forum. We have been meeting monthly for eight years now.
Each one of us is on an entrepreneurial journey, but there are no crossovers of industry - allowing open and vulnerable conversation without any conflicts of interest.
At the meeting, we present the top 5% and bottom 5% of our business, personal and family lives over the previous month. We have a very strict confidentiality agreement- everything said in the room stays in the room.
We share all three components, - business, personal and family, because none of these things operate in isolation. An unhappy family will affect how you show up to your business. A crisis at work will affect your dedication to health.
At the conclusion of our personal presentations we have an open discussion on a predetermined topic - last week was near term economic forecasts. The forecasts always vary greatly, depending on the individual's industry nuances and relevant exposure.
Generally speaking, the tech entrepreneurs are the most optimistic, and the trades or service based companies are the most cautious.
From one seat, labour is scarce and getting scarcer. Inflation is continually adding pressure and squeezing margins. Consumers will not continue to absorb the cost increases and we are going to see a severe retraction in economic activity. A big recession is coming.
From another seat, companies are removing inefficient man-labour hours and replacing them with low cost scalable software. Tech-based solutions are correcting costly human errors, and businesses are becoming more efficient, bringing cheaper products to consumers. The world is getting better.
Each voice in the room is credible - all members are running multi-million businesses - this is the membership criteria.
Who is right?
Last week I had two guests on the show - one would lead you to believe that we are on the brink of systemic collapse, the other, that we were about to enter a new era of abundance. Both have incredible track records of spotting macro trends, and positioning themselves to profit handsomely.
One was a gold and silver dealer and currency cycle specialist. At her house in Phoenix, she has built a self-sustaining aquaponic tilapia farm. She grows all sorts of produce, naturally fertilized from the tilapia ponds, which double as a healthy and renewable protein source. I am flying down to see the property next week.
She also has a separate, hard to find property, where she has built a “bug-out” house. It is her safe haven in case civil unrest in the US accelerates and enforcement responds with aggressive impositions. I asked her the likelihood she expects to need her bug-out house, she said 100%.
I have to admit. After the interview I found myself re-evaluating how prepared I was to deal with some kind of absolute and prolonged shutdown or collapse.
There is something oddly romantic about “doomsday-prepping”. I am not sure what it is, but I often encounter people who have become obsessed with preparing for the collapse - it is a seductive concept.
My second guest this week founded one of the first blockchain centric investment funds. He is presently managing $490 million USD.
He is a legend within technology investment, generating outsized returns by focusing on "S Curve" trends and positioning his capital in front of mass adoption.
At a high level - an “S Curve” predicts that a technology product or service will take the same amount of time to go from 0-10% adoption as it will to go from 10-90% adoption.
The “S Curve” adoption has been proven through countless innovations, from the automobile to the internet - and almost everything in between - fax machines, home computers, mobile devices etc.
After this interview I felt calm, optimistic and comforted by humanity's consistent ability to innovate through any obstacle and continually improve the quality of life.
Everything is going to be fine.
So who was right? The Prepper, or The Optimist?
It is important to have insurance policies, whether for you that means some cash savings, or a cellar full of canned food, guns and gold… you do you, but don’t lose sight of today. Don’t let it cost you your mental health.
There are always two forces at play - the long term cycles and the short term cycles. By any measure, life is safer, easier, and more comfortable today than it was 100 years ago.
But was life better for an American blue collar worker in 1927 or 1931?
The short term cycles can mislead us.
I have a safe full of gold coins. It’s hidden like pirate treasure. I have a hard wallet full of crypto currency. I have paper cash and lots of equity in my home.
What next? Gamble. Build the moat, and then build the castle.
Gamble on new business ventures. Gamble on start-up investing. Gamble on new income streams.
Don’t hope for the best but plan for the worst. Plan for the best, because you planned for the worst.
I’ll leave you with one of my favourite conversations ever, between John Goodman (Frank) and Mark Wahlberg (Jim), in The Gambler.
Jim Bennett: I’ve been up two and a half million.
Frank: What you got on you?
Jim Bennett: Nothing.
Frank: What you put away?
Jim Bennett: Nothing.
Frank: You get up two and a half million dollars, any ***hole in the world knows what to do: you get a house with a 25 year roof, you put the rest into the system at three to five percent to pay your taxes and that’s your base, get me? That’s your fortress of solitude. That puts you, for the rest of your life, at a level of f*ck you. Somebody wants you to do something, f*ck you. Boss pisses you off, f*ck you. Did your grandfather take risks?
Jim Bennett: Yes.
Frank: I guarantee he did it from a position of f*ck you. A wise man’s life is based around f*ck you.
Be like Frank. Then gamble like Jim.