The Memo: Do the right things, not everything
Compiled insights from my personal notes and experience
I came to realize that trying to publish writing every day makes me unproductive. It creates a false sense of expectation that I can consistently keep up with. While I can be consistent in certain areas of my life, like reading, I’m not as consistent with my writing. That’s a weakness I’m looking to improve.
Instead of committing to publishing every day, I’ve decided to compile all my letters and notes into periodic collections. I call these collections the Memo. This is the first one I’m sharing with you. I’m not sure when the next one will come out, but as long as I’m alive, there will always be a next one.
Today’s topic will revolve around investing, financial planning, management, prioritization, and overcoming hardships.
To invest is to think
“The best way to minimize risk is to think” - Warren Buffett
Minimizing risk requires a great deal of pre-thinking before engaging in any business activity or decision-making. Clear thinking doesn't mean you stop thinking. It means tackling problems from every angle, considering the main issues at different layers. It's like peeling an onion, examining each layer without skipping any to reach the core. Throughout this process, you verify each angle of the problem until you're finished.
Many people approach investing with thinking, but not the right thinking. If you pick the wrong way to think, no matter how hard you think, you can still get to the wrong conclusion. It’s like thinking a fish can fly or the earth is flat, and then finding all the premises that confirm your way of thinking. It’s a cool exercise but not an effective one to get the result you want, which is the return on your money.
Right thinking in investing is picking the right principles first and then developing your strategy around those principles. For example, a right principle is that investment is the present value of future cash flow—that’s the right principle. But picking stocks based on the opinion of a trusted broker who tells you that this gold piece, land, or stock is going to go up isn’t the right principle. Another principle is the margin of safety, where you approach buying stock when it’s selling below the estimated intrinsic value over time.
Wishful thinking isn’t thinking. If your thinking relies on a wish to be true, that’s not the thinking you want to have. You’re hoping for the event to happen instead of trying to understand the subject and understanding what will happen.
Financial plan for family and kids
The moment you get married and potentially have kids, you will need to get your financial planning and practices in order. There is no single right way to do it because each family has different needs and wants. Therefore, you also want to approach this topic with some principles in mind.
What do you want for your family financially?
For me, I would first look at the concept of family wealth. You’re probably working, and your wife may or may not be. How will both of you implement practices to protect your wealth? Well, you will need a savings plan. You need some form of investment in assets that grow your wealth overtime. If you have debt—whether on credit cards, mortgages, or business debt—how much are you willing to take on, and what’s the plan to pay it back based on your income?
And when you have kids, what do you think about a financial plan for them by the time they grow up? They will need food, they will ask you to buy them toys, and you may have to pay for their schooling and education.
Eventually, your kids will have to take responsibility for their own money management—the earlier, the better. This means that from the moment they start asking you to buy them things, they need an awareness of how money is being spent. They should understand the value of what they get, along with the effort it took to earn the money to buy it. It doesn't have to be a big lesson each time, but you want to ensure they understand that the toy they get is bought with money and effort.
It's a mistake to try to do everything
Trying to do everything and anything? That’s a recipe for disaster. It’s better to focus on one thing at a time—better yet, one thing consistently over time.
Being able to do many things sounds great when you're just starting out. You need that hustle, that openness to opportunities. But the key is learning to say no to everything else—every other opportunity—so you can make the one thing you’ve picked work out decently.
It may be a job you have, but it’s not moving as fast as you want. It may be a business you just started, but there aren’t enough customers. It may be an investment in an asset, but you have yet to see a return. The key is to stick with the decision you’ve made long enough to figure out the next advanced step and solution to unlock that success.
False expectation
False expectations come from seeing the world as you wish it to be, rather than as it truly is. This inevitably leads to mismatched results, which then lead to disappointment.
The happiest person has no expectations. The second happiest has low expectations. The worst off are those with high expectations, and the very worst are those with entitlement—expecting everything to go their way.
Management is figuring out what to do first
If you’re working hard but staying stuck or not moving forward, it means you’ve been working on the wrong thing. You can work tirelessly watching videos about riding bicycles, but if you never hop on a bike to pedal, you’ll never learn to ride a bike.
Figuring out what to work on is probably the hardest skill one can learn. It’s what separates the dreamer who watches videos, the doer who takes action, and the winner who figures out the right things to do along the way.
Management and prioritization
Management is not easy. If it were, you would never complain about your life, your work, or your schedule. You wouldn’t hear other people complain about those things either. And in business, management goes beyond just yourself—you have to manage projects, deadlines, and interactions with others.
Management is also about prioritization. They go together, but I believe mastering prioritization brings you closest to mastering management. The way you prioritize, update, and improve tasks with your team—and how you motivate them to stay focused—that’s the art of management.
Improvement takes time, and that applies to management as well. It’s easy to mistake the priority for the easiest task, but true prioritization is about identifying the hardest, biggest task—the one that, once completed, knocks out all the smaller tasks at once.
Doing your laundry or cleaning your house won’t make you less anxious about your work assignment, the project that needs to be finished, closing a deal with a client, or getting into shape. In fact, tackle the assignment, make progress on the project, talk to your client, go for a run—and this might sound crazy—say no to even thinking about doing your laundry or cleaning your house. Do those small tasks later, once you’ve finished the big one, or hire someone to take care of them.
A great manager can consistently knock out his priorities better than the rest.
Things aren’t easy by default when you want to achieve them
Nothing gets easier; it only gets harder. Easiness means you've stalled. Leveling up is never easy. To achieve something, you need a plan, a vision, hope, wish, etc. and the determination to keep working hard. You must utilize your time, resources, and everything at your disposal to reach your goal.
So if anyone tells you that something—like making money—is easy, ask them: What does it take? What time, resources, energy, and risks are involved? Make sure they can explain it clearly, step by step, and outline the actions needed for it to work.
Old Chinese proverb I recently learned
An old Chinese proverb I recently learned:
"If you want happiness for an hour, take a nap. If you want happiness for a day, go fishing. If you want happiness for a year, inherit a fortune. If you want happiness for a lifetime, help somebody."
I’ve been a tutor and a teacher, and one of the things I’ve found in tutoring and teaching is the joy of helping students learn and achieve their goals. Every time I do this, I feel genuinely happy.
Perhaps this quote speaks some truth behind that experience.
That’s a wrap for today!
Ricky