Author Topic: Money and Confidence are Interchangeable  (Read 9501 times)

gerardc

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Re: Money and Confidence are Interchangeable
« Reply #50 on: April 11, 2018, 05:51:57 PM »
I agree with most of the folks here that this article was a bit of entitled arrogance and while the original MMM message was very grounded it seems each new article places Pete further and further away from everyone else. 

I do not agree with risk taking being the end all be all, as the last poster seems to.  I know a lot of people who live life taking risks saying they can always get a job when they need one, and they get to test it out a lot because they stink at anything they do and get fired and "need" another job and they find one and fail at that, but they stay rosy and optimistic while their family suffers from the inability to provide anything stable because of their lack of "risk aversion". 

Have you read the article? It's about an overcompensating teenager who strives to become "good at everything they do", including their job, frugal lifestyle, health and fitness, etc. Being on the upper part of the graph (enough money) is a prerequisite for his prescription (the recipe for confidence). If you don't meet the prerequisite, the article doesn't apply.
Yes, I did read the article.  Maybe that was not really a question given what you followed it with.  You then provide your interpretation of the article, which does not align with mine. 

I had a lot of friends as a teenager that felt that were good at everything they did, but they were sorely mistaken and the world was telling them that, they just refused to listen.  Why?  Because they had confidence.  And it killed them.  That was my point.  The pithy comment of "money and confidence are interchangeable" which is not something I made up, it was what the title of the post was, is wrong in my opinion.  You can be very confident and still never make any money because you are delusional.  That's what I was warning against.  These people think they meet the prerequisite.  They don't.  They just won't admit it or can't see it or whatever, therefore if they read this and think it applies and go forth with confidence that can still crash and burn.

What you say about undue confidence is true, I notice that mostly in teenagers and young students. As soon as they venture in the real world, reality hits them like a ton a bricks. As a result, it's pretty rare for an adult to remain in unwarranted confidence about money.

Confidence, like most things, needs to strike a balance. There's an optimal point between 0 and 100%. Those who are below this point need a different advice than those above it. However, I found the article made it pretty clear who the advice applies to (someone with a healthy stash and marketable skills, looking at OMY).

pecunia

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Re: Money and Confidence are Interchangeable
« Reply #51 on: April 13, 2018, 08:58:17 PM »
Mr Mustache's latest article impressed me.

I saw part of it from a different perspective.  A few years ago i was looking for a job.  I am not a software engineer so employers are not beating a path to my door.  I was not feeling good about the situation.  In fact I was quite depressed.  So - I got on YouTube and tried to use hypnosis to un-depress me.  It actually worked pretty good.

While perusing the hypnosis stuff, I came across this thing called the "Power of Attraction."  It basically says that what you want will come to you.  You have to think about it and let it happen.

At first I thought it was pure BS, good things don't just happen you have to work for them.  Then I gave it a bit of thought.  Yeh - If you are thinking about the thing all the time, you are going to be thinking of ways to make it happen.  You are going to be thinking about ways to make your plans work.  The plans may be altered as you move along towards your goal.  You need to flex a bit with reality.  However, the power of attraction is still pulling you to your goal.

You ever hear of people giving a talk telling you to "visualize" your success.  Apparently, this must work because they keep using this approach.  To me this visualization is using the power of attraction.   Visualizing the result is granting you the confidence to let it happen.

Then The Mustached one comes along with his latest message.  This includes:

Quote
Many of us are focusing our energy on building up the wall of protective money and insurance policies around us to ever-greater heights, working one last year and funding one last insurance policy against an obscure risk, when really our deficit is not in money. It’s in confidence.

This seems to run in parallel with the "Power of Attraction" thing.  You must visualize your goal as though you are already there and then let the "power of attraction" take you there.  Even the terminology is similar.  Focus your energy toward your goal and allow the power of attraction to take you to success.

I kind of like it.  It's a positive thing when I can assume (or know) that there is a powerful force in the universe guiding me to successful goals.  It's a real confidence builder.  That confidence will let you get up when the market dips and move on.  That confidence will help you find a solution when the health care premium goes up.

Yeh - The force is with you.

Malkynn

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Re: Money and Confidence are Interchangeable
« Reply #52 on: April 14, 2018, 07:29:31 AM »
Mr Mustache's latest article impressed me.

I saw part of it from a different perspective.  A few years ago i was looking for a job.  I am not a software engineer so employers are not beating a path to my door.  I was not feeling good about the situation.  In fact I was quite depressed.  So - I got on YouTube and tried to use hypnosis to un-depress me.  It actually worked pretty good.

While perusing the hypnosis stuff, I came across this thing called the "Power of Attraction."  It basically says that what you want will come to you.  You have to think about it and let it happen.

At first I thought it was pure BS, good things don't just happen you have to work for them.  Then I gave it a bit of thought.  Yeh - If you are thinking about the thing all the time, you are going to be thinking of ways to make it happen.  You are going to be thinking about ways to make your plans work.  The plans may be altered as you move along towards your goal.  You need to flex a bit with reality.  However, the power of attraction is still pulling you to your goal.

You ever hear of people giving a talk telling you to "visualize" your success.  Apparently, this must work because they keep using this approach.  To me this visualization is using the power of attraction.   Visualizing the result is granting you the confidence to let it happen.

Then The Mustached one comes along with his latest message.  This includes:

Quote
Many of us are focusing our energy on building up the wall of protective money and insurance policies around us to ever-greater heights, working one last year and funding one last insurance policy against an obscure risk, when really our deficit is not in money. It’s in confidence.

This seems to run in parallel with the "Power of Attraction" thing.  You must visualize your goal as though you are already there and then let the "power of attraction" take you there.  Even the terminology is similar.  Focus your energy toward your goal and allow the power of attraction to take you to success.

I kind of like it.  It's a positive thing when I can assume (or know) that there is a powerful force in the universe guiding me to successful goals.  It's a real confidence builder.  That confidence will let you get up when the market dips and move on.  That confidence will help you find a solution when the health care premium goes up.

Yeh - The force is with you.

I can absolutely attest to this.
I’ve never not gotten an opportunity that I wanted, even if that opportunity didn’t exist. I have two side hustles now that only exist because I asked for them to exist.

Granted, I spent 4 years researching, learning, volunteering, networking, and making myself valuable to people, and when the right people with the right resources came along, I was able to just say “you should let me do this for your company because it would benefit you” and voila, I invented jobs for myself doing what I love.

I don’t necessarily believe any force beyond my own effort had any part in it, but it is true that having confidence that I can do things that I want to do and that it will work out has served me incredibly well.

I find most people get stuck and fixated on following some “proper” path to success, that they want reassurances that what they are doing is going to lead to some predictable outcome. Whereas I find the most predictably successful people are those who look to do things in a way that no one else is doing. But it takes boldness to do things differently with no clue of how it will turn out.

Most people think “if it isn’t broken, don’t try to fix it” while others think “if it isn’t broken, I’ll find a creative way to break it”

At the end of the day, it’s this kind of personality that adapts best to change and challenge because they have no attachment to the status quo as a form of security, and tend to feel most reassured by their own ability to adapt as opposed to reinforcing their lives *against* change.
« Last Edit: April 14, 2018, 10:20:03 AM by Malkynn »

Classical_Liberal

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Re: Money and Confidence are Interchangeable
« Reply #53 on: April 14, 2018, 09:59:55 AM »
@Malkynn & @pecunia

I've never bought the whole "attraction" thing because it seems like magical thinking to me, but I still agree wholeheartedly with what you are saying here.  I prefer to look at it as serendipity.  People with low confidence levels have likely not experienced much of it in their lives. The thing with serendipity is that it's more than just luck.  It's luck combined with a persons ability to see the gift-horse and take actions when it's within reach.

Folks who are mentally/physically exhausted tend to be unable to either see or act on the great opportunities when they come within reach.  Some also have personalities or even neuroses which inhibit their ability to see the serendipity in their lives.  I believe this whole "attraction" thing is just taking it to a new level.  Essentially you are actively training your serendipity-seeking muscles; hence are actively searching for these opportunities and are able to quickly and effectively respond when they appear. 

This becomes a habituated positive feedback loop.  The worlds not doing anything different for you, rather, you are looking and acting differently in the same world.

Classical_Liberal

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Re: Money and Confidence are Interchangeable
« Reply #54 on: April 14, 2018, 10:22:57 AM »
Anyway, to connect the above with the original article... 

MMM implied he didn't need the million dollars of assets because the construction, carpentry, blog, and commercial building business opportunities arose; each/any of them could easily cover his living expenses.  I think his assumption is true, but misleading.  It's highly doubtful any of those opportunities would have presented themselves AND he would have recognized them AND had the energy and wherewithal to act on them if he was still spending 50+ hours a week in the cubical with a young family at home demanding time as well. In a way, the freedom the million dollars provided attracted the serendipity.

I still think his overall point is valid.  There is a sweet spot in the money/confidence arena.  If he (MMM) had been confident enough (and or wanted to, maybe he didn't just yet) to call it quits with only 5 year of expenses saved, the same events could have taken place just as easily.  OTOH if someone waits until 50X US median household income is saved, they have missed out on a shit-ton of serendipity that could have taken place in the decades of working in an unfulfilling career. 

Malkynn

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Re: Money and Confidence are Interchangeable
« Reply #55 on: April 14, 2018, 11:54:23 AM »
@Malkynn & @pecunia

I've never bought the whole "attraction" thing because it seems like magical thinking to me, but I still agree wholeheartedly with what you are saying here.  I prefer to look at it as serendipity.  People with low confidence levels have likely not experienced much of it in their lives. The thing with serendipity is that it's more than just luck.  It's luck combined with a persons ability to see the gift-horse and take actions when it's within reach.

Folks who are mentally/physically exhausted tend to be unable to either see or act on the great opportunities when they come within reach.  Some also have personalities or even neuroses which inhibit their ability to see the serendipity in their lives.  I believe this whole "attraction" thing is just taking it to a new level.  Essentially you are actively training your serendipity-seeking muscles; hence are actively searching for these opportunities and are able to quickly and effectively respond when they appear. 

This becomes a habituated positive feedback loop.  The worlds not doing anything different for you, rather, you are looking and acting differently in the same world.

I completely agree.
The kind of “serendipity” you are talking about isn’t at all random, it’s just hard to follow the threads that lead to it. It’s not so much magic as chaos theory. Your attitudes and behaviours have a direct impact on the outcomes, it’s just impossible to see exactly how.

Being open and bold while dumping goodwill contantly into your professional network will consistently produce the kind of “out of the blue” opportunities that can completely change your life and seem random, but are actually a normal by-product of the workings of a well-nurtured network where you have made yourself useful in dynamic ways to many people with no specific aim of direct reward for yourself.

The opposite is being closed off, and primarily focused on linear progress where you tackle one forward step at a time where you expend energy in ways only to directly try and benefit yourself. This will usually only result in that effort slowly, incrementally moving you forward and where unseen forces may choose to hold back your progress if you have dumped badwill into your network along the way trying to benefit yourself, potentially at the expense of others.

Option one may unpredictably leap you forward seemingly out of nowhere. Option two may unpredictably stall you out of nowhere while trying to trudge forward bit by bit.

Most people live somewhere in the middle with too much faith in the single steps forward path and too little faith in the unpredictable serendipity/giant leaps forward path, because one path gives the illusion of security and predictability. Meanwhile, I consider serendipitous opportunities to be inevitable.

That’s why having FU or FIRE money gives so many people the confidence to follow the serendipitous path, but having that money isn’t actually a prerequisite for choosing that path, it just makes it psychologically easier. FIRE can act as a security blanket, but it isn’t required.

Classical_Liberal

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Re: Money and Confidence are Interchangeable
« Reply #56 on: April 14, 2018, 03:51:29 PM »
Most people live somewhere in the middle with too much faith in the single steps forward path and too little faith in the unpredictable serendipity/giant leaps forward path, because one path gives the illusion of security and predictability. Meanwhile, I consider serendipitous opportunities to be inevitable.
This is excellent.  I was having a conversation with someone recently about why I despise the current business culture idea of SMART goals.  I don't dislike goals in general, but the idea that I must accomplish "A" by doing "B", "X" number of times a week for "Y" weeks is ridiculous.  Such a plan not only makes life miserable and inflexible, hence less likely I'll follow through; but it also creates a narrow focus in which I could miss short cuts or more efficient means to reaching the goal.  I really think the reason most people are attracted to this type of behavior is the illusion you write of above. 

That’s why having FU or FIRE money gives so many people the confidence to follow the serendipitous path, but having that money isn’t actually a prerequisite for choosing that path, it just makes it psychologically easier. FIRE can act as a security blanket, but it isn’t required.
I agree that the psychological component is huge.  I also think having big chucks of money lying around creates more serendipity/opportunities. The time/energy not spent having to scramble to put food on the table probably even more so.  There has to be some level of buffer for base living expenses and capital as preparation for the opportunities (serendipity muscle). 

The amount needed to reap the psychological benefit is variable based on personality and situation (ie primary bread winner of a family, or single, etc).  This is likely what MMM has in mind with the article. 

I think the amount needed to take advantage of available opportunities probably follows a S-curve, the more you have, the more serendipity. However, there is a huge gain after a certain amount and diminishing returns after another amount.  I'm not pretending to know what those fixed numbers happen to be, just a guess since this is how things tend to work in nature.

gerardc

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Re: Money and Confidence are Interchangeable
« Reply #57 on: April 14, 2018, 07:34:18 PM »
I think the amount needed to take advantage of available opportunities probably follows a S-curve, the more you have, the more serendipity. However, there is a huge gain after a certain amount and diminishing returns after another amount.  I'm not pretending to know what those fixed numbers happen to be, just a guess since this is how things tend to work in nature.

Isn't it just based on the amount of time not working needed to achieve the psychological mindset of being acutely aware of new opportunities (serendipity) and feeling confidence? Assuming that takes around 3 months on average, but there is some variance in it. You well might not find any rewarding activity after those months are up. So, you might feel some stress and your mind will be preoccupied by the uncertainty. I think the 4% rule is great in that way, it allows you to relax, stop thinking about money and more about what you want to do.

Classical_Liberal

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Re: Money and Confidence are Interchangeable
« Reply #58 on: April 15, 2018, 08:57:44 AM »
@gerardc

I didn't write very clearly, but I see the psychological component a bit different than having capital to utilize.   I agree, a risk taker may be OK with 3 months.  Hell, a young 20-something might even be OK with a guaranteed place to crash in his/her moms basement while working on the next plan.  It's really whatever amount is needed to free up time and energy. For many on here it's 3-4% plus OMY.  Psychologically though, there may be a disadvantage to having too much.  Loss aversion would probably play into the equation and make someone less likely to act on serendipity.

Capital itself has value for serendipity, this likely does not decrease the more you have; but probably looks like an S-curve.  For example, the local housing market takes a hit and the duplex next-door goes on the market at a 20% discount of whats needed for good profitability. You have 100K for a down payment and write an offer immediately.  Here's an instance in which lack of capital would have hindered action on an unexpected opportunity, no matter how psychologically prepared one had been.

gerardc

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Re: Money and Confidence are Interchangeable
« Reply #59 on: April 15, 2018, 10:17:10 AM »
The early 20 something may all the confidence in the world using their parents as a safety net, but they'll probably:
1- Not have much real world work experience and skills,
2- Not appreciate the difficulty/value in getting more money,
3- Not have capital to fund opportunities.

As a result, they'll have ton of confidence but they'll probably end up just traveling in hostels and fucking around. At least that's what seems to happen!

pecunia

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Re: Money and Confidence are Interchangeable
« Reply #60 on: April 15, 2018, 10:23:30 AM »
"Capital itself has value for serendipity, this likely does not decrease the more you have; but probably looks like an S-curve.  For example, the local housing market takes a hit and the duplex next-door goes on the market at a 20% discount of whats needed for good profitability. You have 100K for a down payment and write an offer immediately."

I guess this matches history.  The rich get richer and the poor get poorer.

Quote
Isn't it just based on the amount of time not working needed to achieve the psychological mindset of being acutely aware of new opportunities (serendipity) and feeling confidence?

Slightly off track thought here, but I'll toss it in anyway.  Going from the micro (one person) to the macro (whole country), will this mean that with all the people out there working beau coup hours a week, like 60 or 70 hrs that opportunities will be lost?  Would it also apply to all these folks that have to work two or three jobs?

I'm thinking of Apple Computer and HP here.  These big companies started in garages by folks who had a bit of time and expendable resources to do this.  With people working long hour weeks, I'll bet the inclination to innovate and tinker has been beat out of them by Gigacorp.  I just kind of wonder if the present times with Wall Street squeezing all they can out of Joe Employee if we are suffering from an innovation deficit>

Alternatively, I wonder if all these FI people out there are going to lead to new innovations with value to booth themselves and society that will exceed that if they had stayed in their cubes for another 20-30 years.  If FI spreads could it lead to serendipity for all of us?

Malkynn

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Re: Money and Confidence are Interchangeable
« Reply #61 on: April 15, 2018, 10:32:26 AM »
The early 20 something may all the confidence in the world using their parents as a safety net, but they'll probably:
1- Not have much real world work experience and skills,
2- Not appreciate the difficulty/value in getting more money,
3- Not have capital to fund opportunities.

As a result, they'll have ton of confidence but they'll probably end up just traveling in hostels and fucking around. At least that's what seems to happen!

The thing is “confidence” doesn’t necessarily have universal definition.

I consider what a lot of inexperienced young people have to be “boldness” not necessarily confidence.
To me, confidence is earned through experience and is defined as the assured knowledge of capability.
That’s in contrast to untested boldness, arrogance, ignorance, or disregard of risk.

I was always bold, but lacked a lot of genuine confidence. I’m only more confident now that I have experience and certainty about my abilities. My confidence actually comes from knowing my limits, not from my boldness about my abilities.

This is my personal definition of confidence based on my experience and from realizing that many people who present themselves as “confident” through boldness are often deeply deeply insecure. To me, true confidence tends to make people calmer and more humble. Confident people are the kind of people who make me feel comfortable and safe, not intimidated or overshadowed.

Classical_Liberal

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Re: Money and Confidence are Interchangeable
« Reply #62 on: April 15, 2018, 02:56:10 PM »
The early 20 something may all the confidence in the world using their parents as a safety net, but they'll probably:
1- Not have much real world work experience and skills,
2- Not appreciate the difficulty/value in getting more money,
3- Not have capital to fund opportunities.

As a result, they'll have ton of confidence but they'll probably end up just traveling in hostels and fucking around. At least that's what seems to happen!

The thing is “confidence” doesn’t necessarily have universal definition.

I was always bold, but lacked a lot of genuine confidence. I’m only more confident now that I have experience and certainty about my abilities. My confidence actually comes from knowing my limits, not from my boldness about my abilities.

The difference between not knowing what you don't know and knowing what you don't know.  A young person often knows so little, they don't even know enough to understand that they don't know much. :)  OTOH a young person has time on their side.  Plenty of time for failures and learning from them, while an older, and perhaps, wiser person realizes there are only so many chances left.

I'm thinking of Apple Computer and HP here.  These big companies started in garages by folks who had a bit of time and expendable resources to do this.  With people working long hour weeks, I'll bet the inclination to innovate and tinker has been beat out of them by Gigacorp.  I just kind of wonder if the present times with Wall Street squeezing all they can out of Joe Employee if we are suffering from an innovation deficit>

Very interesting thought process. I wonder how we could test this hypothesis.






tooqk4u22

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Re: Money and Confidence are Interchangeable
« Reply #63 on: April 16, 2018, 08:27:42 AM »
@Malkynn & @pecunia

I've never bought the whole "attraction" thing because it seems like magical thinking to me, but I still agree wholeheartedly with what you are saying here.  I prefer to look at it as serendipity.  People with low confidence levels have likely not experienced much of it in their lives. The thing with serendipity is that it's more than just luck.  It's luck combined with a persons ability to see the gift-horse and take actions when it's within reach.

Folks who are mentally/physically exhausted tend to be unable to either see or act on the great opportunities when they come within reach.  Some also have personalities or even neuroses which inhibit their ability to see the serendipity in their lives.  I believe this whole "attraction" thing is just taking it to a new level.  Essentially you are actively training your serendipity-seeking muscles; hence are actively searching for these opportunities and are able to quickly and effectively respond when they appear. 

This becomes a habituated positive feedback loop.  The worlds not doing anything different for you, rather, you are looking and acting differently in the same world.

“Luck Is What Happens When Preparation Meets Opportunity"

tooqk4u22

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Re: Money and Confidence are Interchangeable
« Reply #64 on: April 16, 2018, 08:42:11 AM »
The early 20 something may all the confidence in the world using their parents as a safety net, but they'll probably:
1- Not have much real world work experience and skills,
2- Not appreciate the difficulty/value in getting more money,
3- Not have capital to fund opportunities.

As a result, they'll have ton of confidence but they'll probably end up just traveling in hostels and fucking around. At least that's what seems to happen!

The thing is “confidence” doesn’t necessarily have universal definition.

I consider what a lot of inexperienced young people have to be “boldness” not necessarily confidence.
To me, confidence is earned through experience and is defined as the assured knowledge of capability.
That’s in contrast to untested boldness, arrogance, ignorance, or disregard of risk.

I was always bold, but lacked a lot of genuine confidence. I’m only more confident now that I have experience and certainty about my abilities. My confidence actually comes from knowing my limits, not from my boldness about my abilities.

This is my personal definition of confidence based on my experience and from realizing that many people who present themselves as “confident” through boldness are often deeply deeply insecure. To me, true confidence tends to make people calmer and more humble. Confident people are the kind of people who make me feel comfortable and safe, not intimidated or overshadowed.

I agree, the 20 something typically doesn't have real confidence which is gained through experience but has a false confidence otherwise known as naivety and/or a big case of having nothing to lose.   Don't get me wrong, these are very powerful as the completely alter the risk spectrum and permit the so called jumping off the ledge.  Actually, I think these can be more powerful because once a person gains true confidence then they may have lower risk tolerance, loss aversion as previously mentioned comes more into play, and so called knowing too much (ie smart people can talk themselves out of anything).   

a532942

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Re: Money and Confidence are Interchangeable
« Reply #65 on: April 16, 2018, 09:38:56 AM »
Quote
I agree, the 20 something typically doesn't have real confidence which is gained through experience but has a false confidence otherwise known as naivety and/or a big case of having nothing to lose.   Don't get me wrong, these are very powerful as the completely alter the risk spectrum and permit the so called jumping off the ledge.  Actually, I think these can be more powerful because once a person gains true confidence then they may have lower risk tolerance, loss aversion as previously mentioned comes more into play, and so called knowing too much (ie smart people can talk themselves out of anything).   

I am a 20 something that lacks confidence. And money (around 1.5 years of expenses) has given me some confidence. I jumped into the first position I got out of college. I could have waited a bit and maybe gotten something better, but I could not bear with the idea of rejecting a job (not really, but a funded PhD) for a possibility of another option. I don't really hate the job I have know, but I do dislike the place (the town is too small and I struggle with my social life). Now I am stuck here for two years more (because I need to finish my PhD). I think the money can give me some time to find a place that is good for me, and not jump at the first offer that comes.
Money is not the only thing that gives confidence; there is a term called identity capital which is all the intangible assets you have. MMM has a lot of those, which he probably does no realize other people have. He is young, fit, no health issues, extroverted (? he has a lot of friends that help him with his projects), he is a citizen of a country that provides social services (if he lose all his money and the healthcare costs skyrocket, he can go back to Canada), he was very skilled at his previous job (he mentioned several times that he got job offers after he retired).
Not everybody has that, and I don't want to be complainypants, but confidence alone will not give you a good outcome. What I did get from his article was that if you have a bit of money and all the identity capital he had before he FIRE'd he could have quit earlier. I think someone without any of those things, just confidence, would be misguided in retiring. But if you have a bit of a safety net, tons of ability, and are stuck at a job you hate, you should quit.

BookLoverL

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Re: Money and Confidence are Interchangeable
« Reply #66 on: April 16, 2018, 10:00:02 AM »
I think the main problem with this article was that MMM overestimates how easy it might be for people to just decide that they have confidence. Now, if they are genuinely a person who already has a wide range of skills at a competence level and more than one skill at mastery level, including competence in social skills, then, yes, it will be easy for them to be confident, because they actually do have the skills to excel in a bunch of different jobs and opportunities, to find those jobs and opportunities, and to convince people that they are the right person to pay the money to.

If somebody doesn't have the real skills to provide the foundation to their confidence, then either their confidence is actually hubris, or their confidence will vanish as soon as it comes to the time to actually do anything. I suspect this is where a lot of cases of people who say "Oh, I'd really love to do X!" but never seem to actually do it come from. Basically, they do genuinely want to do the thing, but they're not really actively looking at the opportunities because they're secretly not confident they're actually capable of doing the thing. For these people, the solution is not simply to tell them to "work on your confidence", but rather to get them to identify the actual skills they'd need to achieve their dream. Then they need to study those skills in their downtime, until they do have the skills, and they will then find the confidence has appeared. In conclusion, it's true to say that some level of money can be exchanged for some level of confidence, but it has to be true confidence, not false bravado.

The reason I say that social skills should be included in the skillset in order to achieve true confidence is that pretty much every money-making arrangement in modern society, other than inheritance and chance lottery wins, needs you to have some level of social skills. If you want a traditional job with an employer, you need to pass the interview and convince them to hire you instead of the 1000 other applicants. And if you want to break out of that and be self-employed or become an entrepreneur, well, now you are in charge of finding your own clients. So you definitely need social skills, because otherwise you're not going to have any clients, because you either won't meet anybody that you can even try to persuade to buy your service or product, or when you do meet people, you will accidentally put them off by being a jerk, or sounding unsure about your own service or product, or failing to bring up that you have a product and just rambling about something, or one of the many other social failures that can be committed by the socially inept. If you have mastery of some skills that people actually want to buy, then, and you want to have the option to do occasional consulting for money after you've retired, then if you don't already have social skills, you need to start working on them TODAY.

If somebody has the social skills but doesn't really have any other skills, I think that's when you get people like con-men and other smooth-talkers who somehow seem to get money without really providing much, and it comes across as unethical.

If somebody hasn't really got decent skills in anything AND has poor social skills, as is common with a lot of people fresh out of school or uni if they weren't in the popular crowd, didn't pick their subjects wisely or apply themselves properly, and didn't have any family members encouraging them to learn something actually useful as a hobby, then they should not only immediately start learning social skills, but also identify something they enjoy and have the potential to be good at that people will actually pay for (it's no good to be a master of watching Netflix unless you're planning on being a film critic), and start learning that too. Otherwise they will end up competing with everyone and their mother for unskilled minimum wage work, and possibly even failing at getting that. Often they know this and will therefore have quite a few gaping holes in their confidence.

TL;DR: If you have poor confidence, there's no point just trying to brainwash yourself into having confidence. First, look at whether you actually have skills, and if not, work on improving those instead, especially social skills,  and once you start improving, confidence should follow. If you have a lot of useful skills, including social skills, and still have poor confidence, that's when directly trying to improve confidence might become useful.

tooqk4u22

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Re: Money and Confidence are Interchangeable
« Reply #67 on: April 17, 2018, 07:12:18 AM »

Money is not the only thing that gives confidence; there is a term called identity capital which is all the intangible assets you have. MMM has a lot of those, which he probably does no realize other people have. He is young, fit, no health issues, extroverted (? he has a lot of friends that help him with his projects), he is a citizen of a country that provides social services (if he lose all his money and the healthcare costs skyrocket, he can go back to Canada), he was very skilled at his previous job (he mentioned several times that he got job offers after he retired).
Not everybody has that, and I don't want to be complainypants, but confidence alone will not give you a good outcome. What I did get from his article was that if you have a bit of money and all the identity capital he had before he FIRE'd he could have quit earlier. I think someone without any of those things, just confidence, would be misguided in retiring. But if you have a bit of a safety net, tons of ability, and are stuck at a job you hate, you should quit.

I agree that he may have those intangibles and not everyone does, but I think the part you may be setting aside is that the "identity capital" that you talk about is not unlike investing in stocks - people aren't born with it, at least not entirely, and it requires investing in education and networking, being curios and willing to try new things and meet new people, and affording the time necessary to gain enough experience and connectivity to fully develop that identity capital. 

The biggest issue with the blog post is that he is writing from the position of starting on third base (or having just hit a homer) instead of being up at bat where he first started.   Its a complete "hindsight is 20/20" post....which is fine but I am sure there are plenty of examples of people who had the "confidence" to take the next step and then life/murphy's law/bad timing/a bus came and knocked the crap out of them. So to me its a BS post, even if it is true.

gerardc

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Re: Money and Confidence are Interchangeable
« Reply #68 on: April 17, 2018, 08:33:55 PM »
The biggest issue with the blog post is that he is writing from the position of starting on third base (or having just hit a homer) instead of being up at bat where he first started.   Its a complete "hindsight is 20/20" post....which is fine but I am sure there are plenty of examples of people who had the "confidence" to take the next step and then life/murphy's law/bad timing/a bus came and knocked the crap out of them. So to me its a BS post, even if it is true.

Look at the graph again. The situations you describe are at the far lower right, in which case his model rightfully prescribes more money and less confidence. Again, this is not the target audience of the "increase confidence" advice.

The article is titled "Money and Confidence are Interchangeable", not "You don't need money, just get confidence". There is a sweet spot.

I agree that the feeling of increasing confidence, closing your eyes and hoping for the best does happen towards the end, at the time you're fully ready to quit, i.e. when you're already on third base. Why can't he give advice to people on 3rd base? and why are you complaining that the advice is different for people on 1st?

pecunia

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Re: Money and Confidence are Interchangeable
« Reply #69 on: April 20, 2018, 10:52:50 AM »
yeh - The social skills are almost always the most important.  I've worked with some technicians who were quite bright.  However, they could not explain what they were doing to people who asked.  They had plenty of confidence.

These types are best at niche jobs repairing / installing equipment at remote installations with limited social interaction.

This is where they wound up.  There are other things beyond confidence to help you find success in this world.