Wilder, Wealthy, and Wise

The Scorpions have scale, and can rock you like a hurricane.

I was sitting on the deck, enjoying an evening at Stately Wilder Manor, while discussing the future and types of careers that are available with a Wilder-in-law.  One thing that we started talking about were career paths and luck.  I thought I’d share something our conversation inspired.

There are about a million bits of career advice we’ll talk about in future posts, but this is WilderWeeklyWisdom®, so we’ll be a bit more philosophical than that.

One of the better books I’ve ever read is “The Black Swan” by Nicholas Nassim Taleb (his site is here). Taleb does an awesome job of relating probability to the way we view the world.  He does so in a brash and insightful manner that’s sold millions of books.  He’s almost as good as me.  I’m going to borrow one of his core concepts to share with you, because it’s just so darn different of a way to look at how our modern world works.

Not this Black Swan.

Most things that humans experience are nice and linear.  You start at point A and go to point B, and they follow nice 1+1=2 level math.  Simple.  When we lived in tribes of 30-170 and before we combined to create nations of any kind our life was simple and these linear models worked well to explain life. We lived and died seeing things that were almost all explainable by these simple relationships.  And it all made sense, or at least as much sense as it could before The Drudge Report™.

Let’s pretend we’re members of a 99 person tribe.  And it’s the most average of average tribes, so our tribal average height is 5’9” tall (that’s the average height of adult dudes in the USA).  If our tribe suddenly had the tallest person of all of the over 7,000,000,000 that are living in the world today join it, we might start seriously thinking about Olympic© basketball, since the tallest person in the world is 8’3” in height and we could certainly beat Moldova.

But what would the net impact be to our average tribal height?  We’d be 0.3” taller.  That’s the equivalent of wearing thick wool socks taller.  Hardly noticeable.

That’s linear/bell curve thinking – the way that the normal distribution works.  In my best condition ever, I think I could have run 100M in 13 or so seconds.  Usain Bolt ran it in 9.58 seconds.  I’m above average, but Usain is far, far to the right side of the curve.  He’d win every time, but he still “only” beats me by 3.5 seconds, it’s not like I finish the next day.

Source: Wikimedia Commons – They also had it in English, but you weren’t going to read that, either.

So, things that are physical parameters we deal with every day – how tall, how fast, how smart, how skinny, et cetera, are all ruled by the mathematics of the normal curve.

But civilization has given us an enormous change in the way the world works.  Let’s look at the wealth of, say, Bill Gates.  If we kick out the tall guy (he was horrible under the rim) we have room to adopt Bill into our tribe.  Remember, our tribe of 99 is average, so we have an average (per Credit Suisse, via Financial Samurai) net worth of $301,000 (their estimate for the average net worth in the USA).  We adopt Bill who has a net worth of $84,000,000,000.  Our average net worth just went to $840,300,000 per person.  That’s a massive difference when compared to the property of height.  The changes in wealth are not normally distributed, and are scaled so differently that it’s hard for us to wrap our brains around this massive difference in quantities.

I’ve prepared an example to assist.  Let’s go back to our height comparison.  Bill Gates is 279,069.8 times wealthier than the average person in the USA.  Let’s just say that we used that same factor with something like, say, height?

Bill Gates would be 303.9 miles tall.

How about weight?

The average weight for dudes in the USA is 183 pounds.  Bill Gates would be 25,534 tons.

So, now I’ve created a gigantic Bill Gates that is certainly going to menace us like Godzilla.  Fortunately, at 303.9 miles tall, Bill’s head is over 295 miles above marginally breathable atmosphere, so he wouldn’t be able to menace us very long.  Until he fell after he died.

Assuming no terminal velocity constraints due to atmospheric friction, Bill’s enormous head would hit the ground at 6,886 miles an hour.  Ouch!  Goodnight Seattle!

Thankfully, we don’t have to contend with a gigantic Bill Gates.  We are stuck with the 5’10” version.

Taleb calls the wealth effect a scalable quantity, and it surrounds us.  If I were to restart my career today I would try to expose myself to scalable quantities whenever possible – it’s these scaled effects that generate the greatest amounts of wealth.

The flip side is that scaled opportunities have been and will force massive dislocation in the labor markets.  Once upon a time, every little town had a brass band, and singers, too.  The phonograph took the need for many of these local bands away – and even more so the singers.  I could pick up an album and listen to the best singers in the world.  The record companies made vast sums of wealth from the change in scale afforded by technology.  Then?  CDs, Napster, and right now I’m listening to songs (for more or less free) off of Youtube.com.  On Amazon, I have a subscription to essentially any song I can think of with the exception I cannot find the album “Stand Tall” by the Killer Dwarves, and yes, it’s a real album.  The internet is killing the record company.

Scale has done that to local disc jockeys and radio talk show hosts – now they’re national, we only listen to the best.  Scale will probably do that to the entire radio industry within a decade.  I get up in the morning and listen to radio stations in Houston or Fairbanks.  My local radio station is, for me, irrelevant.

Scale will probably eliminate all but the best teachers, too.  We’ll have great “rock star” level teachers and on-site facilitators will help kids learn in class.  That’s coming quickly.  Scale has already done that to sports – fractional differences in performance are worth tens of millions of dollars in contract revenue for players.

In all of these cases, there is going to be massive profit made for those that execute well on the scalable strategies, just like there was for our 303.9 mile tall Bill Gates, who has made money by destroying industry after industry – from typewriters to libraries, and not by stomping on them physically.

Artificial Intelligence will also impact the lives of millions (and make others billions).  There are 3.5 million truckers.  How many truck stop employees depend upon them?  At least a million more.  If I have a self-driving truck, now I eliminate most issues with driving hours, rest periods and legal liability.  I also put at least 2.5 million of the truckers out of business.  This is more scaled disruption that is possible in a decade or less.

So, back to my career advice to the Wilder-in-law?  Become a dentist.  Robots aren’t good at drilling teeth, and probably won’t be for fifty years, and I’m thinking we won’t accept the Terminator® with a drill in our mouths, until forced to by our orbiting Emperor Gates the Gigantic.

All hail our new titanic overlord!

Maybe my new car?  I’d be stylin’ and profilin’ in this one!

Dear Internet, I was going to write to you about things other than cars, but, alas, it’s back to cars we go.  Please forgive me.

I’ve had the same daily driver car for nearly eleven years.  That’s over 38 metric years (which are 100 days each, and which I just made up).  You should see the names of the metric 10-day week!

Given that (ISSUE REDACTED-they told me I could talk about it after Donald Trump’s audit is done) occurred, the insurance company told me that the Wildercar is probably totaled.

I don’t appear totaled, but I thought that I’d use the experience to share a few (more) points about finances and cars.

My car was made before the final episodes of Malcom in the Middle and Arrested Development were made, so for me it’s quite a passing.  I’ve been in this car on tons of adventures with The Mrs., The Boy, and Pugsley all across at least sixteen mountain passes, two alternate realities populated only by members of the band “Journey,” and seven states.  And these aren’t small states like Connecticut or Delaware (which, let’s face it, are smaller than most master bedrooms in Texas), but proper states that you can’t throw an underinflated football across (talkin’ about you, Tom Brady).

I’ll miss the memories of that old car, since, according to math, if my average speed in it was 35 miles per hour, I spent 166 days behind the wheel.

But until the car I bought in 2012, this was almost the most expensive car I’d bought.

Here are my further thoughts on cars and wealth.

DEPRECIATION:

I bought it used, so the majority of the early depreciation was done.  Depreciation, for those of you not fluent in accountant, is the amount of money that evaporates from a car when you don’t keep it tightly sealed in a Glad™ bag.

The minute that you drive a new car off the dealer lot, it plummets in value.

Why?  Because we all agree it does.  Don’t argue!

The slightly longer answer is that most people would rather buy a <b>new car from a dealer with a nice pretty lot rather than someone selling it out in the alley behind the Costco™.  The really longer answer involves cats, string, and the feeble tug of Pluto on the brains of the members of the Federal Reserve, but we won’t go there.

My original purchase prices (cash only, right?cash only, right?) was about $11,000.  I anticipate that my insurance will end up paying me $4,000 due to a variety of factors.

Yeah, I lost $7,000 in value over ten years, but that was based on my price.

Remember I bought this used, about a year old?  Sticker price was about $22,000 for this car.  When it was sold to me, I bought it for half that – initial depreciation on this car was around $11,000!

So, yes, when I turn over the keys and title to the car undertaker, I anticipate that I will have (net) lost $7,000 over ten and a half years.  My net cost of ownership will have been $56 per month.  Per mile? About $0.05.  A nickel a mile!

OPERATING COSTS:

I’ve probably spent about $3,000 on repairs over the years, mostly standard stuff like exorcisms and at least two alternators.  Add in oil changes and tires and that’s probably another $2,000.  A warranty would have paid virtually none of these costs, so you can’t say that it makes sense to have purchased the car new.   Cost per mile?

About $0.04.

FUEL:

My guess on gasoline (at $3.50 a gallon over the life of the car) is about $0.14 per mile.  My car got okay mileage, not great mileage.

Now, you might say, “But John Wilder, life would have been so very much better for you if you didn’t buy so much gasoline!”

To which I retort, “HA!”

I looked at hybrids.

Toyota™ makes the Yaris® and the Prius©.  The Yaris© gets about 15 miles per gallon less than the Prius®.

As far as I can tell they are about the same size of car, so, assuming that you’re mainly buying that 15 miles per gallon, you could buy a Yaris™ and about 3,300 gallons of gasoline at three dollars per gallon for the same price as a Prius™.

If you look closely based on fuel economy, the Prius© is a better deal than the Yaris© after about 390,000 miles of driving.  Or 26 years at 15,000 miles per year average driving.

So, that’s the price of being a Prius™ owner.

I’d look at electric cars, but I don’t want to make the Tesla© and Chevy® Volt™ owners cry.

Insurance: 

I’m betting that insurance cost about the same $0.07 per mile – I did some back of the envelope numbers, and that’s what it came out to.

Unusually, I have full, full, full insurance.  I realize this goes against conventional wisdom and advice of many financial planners, but I have my reasons, and those reasons are:  ALL OF THE REST OF MY MONEY.

I got into a car accident in Houston way back when I was first starting to be worth slightly more than a used paper cup.  I rear ended they guy.  It was rainy, but it was my fault.  He said his neck hurt.

My blood ran cold.  I realized that every bit of my insurance was “Statutory Minimum.”

Crap.

He was (actually) joking about the neck hurting, but it was the best unfunny joke of my life.  Now I have insurance, umbrella insurance, and a little insurance person that follows me around looking for insurable events.  I gladly hand that person a relatively small amount of money to prevent to insure me against (unlikely) but devastating events.

My strategy as a 22 year old had been sound, “What are they gonna take if they sue me?”  Now that I’ve got WilderNetWorth, that equation has greatly changed.

Adding It All Up:

So, my costs to run my late, great, sedan are:

Sure, you might do better, but most times you’d have to pedal to beat these numbers . . . .

Bonus Content, Not Available In Theatrical Release:

N+1:

Cars either run when you want them to run, or they don’t.  In our family we have a rule: Number of licensed drivers + 1 is the number of cars we have.  Not sure that it matters if they are older or newer cars, since you’ll have to have them in the shop sometime.  Have a spare, especially if it’s a cheap spare, kind of like United Airlines treats customers.

Air Conditioning:

For two years my air conditioning didn’t work in the Wildersedan.

I go to work in the morning and come home in the afternoon.  Most mornings in the summer are nice and pleasant.  If it’s a little warm?  Crack the window, what do you live in a mall?

Most evenings are as hot as the surface of Venus during a forest fire.  I rolled down the window and did what they did in 1950.  Dealt with it.  Still don’t know why no one wanted hugs when I got home in the afternoon in the summer on a hot summer day.

Yes, I’m that cheap.

Cost of Repair vs. Replacing The Car:

They say there is no price on love.

They lied.

There is some cost at which I’d just dump the car rather than repairing it – and for the late great Wildermobile that number was probably about $2500.  I had owned the car for years, and knew what generally went wrong, what was wrong, and what I could live with (see Air Conditioning).  Somebody else’s really old car?  That’s a learning curve.

Alternate Views:

Mr. Money Mustache (who I greatly admire) believes strongly in the philosophy of no cars and does a lot of pedaling.  He also (really) believes strongly in not having a job.  As soon as I decide to fully swallow the Mustache Pill, perhaps I will change my mind, but as of now I have a job, commute, and The Mrs. and I are sometimes a huge distance away from each other in a day.

Plus, he has no job.

Well, I’ll miss my old friend, from Detroit.  If there’s an afterlife for it, perhaps it’ll come back as Wal-Mart© shelf?

Anything but a Prius™ – I wouldn’t wish that on Kim Jong Whatever’s car.

I’m too young to remember when Neil Armstrong first stepped foot on the moon, but somehow I still ended up with Apollo themed jammies and our family patriotically drank Tang©.  Mom bought scads of those Space Food Sticks© in the foil wrappers, which tasted like tubular chocolate flavored beef jerky. 

My Mom even found recipes for “hot Tang®” (Big Reveal: it’s hot water and Tang© powder) and made that drink for our frequent snowmachine expeditions. Hot Tang™ tastes like you might expect.

The entire hopes and dreams of our nation, and, indeed, the world followed three brave men as their capsule door was closed.  Thunderous engines fired, and the massive space ship shook off condensed ice on its hull as it shuddered, at first slowly, and then quickly into the Florida sky. Every television in the world was tuned to the voyage when the spaceship left Earth orbit and hurled into a lunar intercept.  The astronauts ran through the checklists, and in a journey worthy itself of a Hollywood film, managed to land on the Moon mere seconds before the lander would run out of fuel.  While preparing to launch back to rendezvous with the orbiting Apollo capsule, Buzz Aldrin looked down and saw the circuit breaker had broken off.  He then did the coolest thing ever done on the Moon:

“Since it was electrical, I decided not to put my finger in, or use anything that had metal on the end. I had a felt-tipped pen in the shoulder pocket of my suit that might do the job. After moving the countdown procedure up by a couple of hours in case it didn’t work, I inserted the pen into the small opening where the circuit breaker switch should have been, and pushed it in; sure enough, the circuit breaker held. We were going to get off the moon, after all.”

This was a total Boy Scout/Be Prepared moment.  Faced with the prospect of a lonely death in sight of his home planet, Buzz decided that no way was some stupid circuit breaker is gonna hold him back.  Buzz has steel in his soul and has the brains (BS in Mechanical Engineering, PhD in Astronautics) to take action.

You’d smile, too, if you were going to get to eat space food.  Buzz is on the right.  

Additionally, Buzz was the first person to pee on the Moon, but that wasn’t due to Armstrong’s lousy piloting, it was due to Buzz being a total dude.

So, you’re 39, you’ve just walked on the Moon. I mean YOU JUST WALKED ON THE MOON! (and peed on it, too) and . . . Now What?

When you achieve your goals, “Now What?” is the hardest question.  It was even harder for Buzz Aldrin.  He was internationally known, and had done a life’s achievement, but life was yet to be completed for him.  He already had his epitaph (“THIS IS THE SECOND DUDE TO STEP ON THE MOON!!!!!!!!!!!!!!”), and he was only 39. How do you go up from there?

He didn’t know, and that was the worst thing that can happen to a man.  (I think the answer may be different for women – men leave a legacy to history by what they do, women leave a legacy through their children, but I have no experience being a woman, other than the time the football team I was on dressed up like cheerleaders for a Pep Rally.  The clothes were not comfortable, except for the skirt.  The skirt was okay.)

In the 1970’s Buzz, his legacy seemingly set, spiraled downhill until he was ready to spiral back up.

What changed?  He changed, he moved his goals from being on the first team to the Moon to figuring how to best get man to Mars, and even now has figured out a fairly quick, low energy (not in a Jeb Bush way, but rather using less rocket fuel) way to get there that he’s trying to sell to NASA.  Is that a worthy goal?  Yes.  Is it one he can throw his whole being at and change the destiny of mankind (again)?  Yes.  But from me to you, Buzz, NASA can’t even get a paperclip into space right now, so keep spending time with that guy whose name rhymes with Belon Rusk.  Just sayin’.

(An aside, isn’t NASA not being able to send people into space a lot like, say, the Arby’s running out of roast beef????)

Buzz is a personal hero, for his intellect, but also for the way that he transformed himself to something better than before, by creating goals for himself that are lofty, meaningful, and difficult as can be, and being bull-headed enough to achieve them.

Why is he my hero?  Because I had (unwittingly) created a goal trap for myself.  I wanted to have sufficient funds to take care of my family for the foreseeable future.  This isn’t “buy myself an island and declare myself a sovereign nation type of money, but WilderNetWorth® (which is 10 years of life expenses in the bank, free and clear).  I hit that goal several years ago.  It’s not a bad goal, but for me it was probably too significant to the way that I thought about the world.  And I hadn’t been working on the next goal, or really, I hadn’t even defined it.  Frankly, I didn’t realize the problem was as big as it was for me personally.  Then I remembered Buzz.  Heck, if he can do it . . .

Now What?

That’s an interesting question, because if we don’t have a direction in life, regardless of the motion, we’re just treading water.  I know that Scott Adams has had wild success with his focus on Systems over Goals (and there is a great deal of evidence to support him) but there are times and places for goals, and perhaps even certain personalities that are goal driven.  Being good enough to be selected as one of the first people to go to the Moon just *might* imply a bit of goal driven behavior.  We will talk more about Mr. Adams philosophy the future posts (and I agree with him in many respects), but he is certainly one of the most original thinkers on the planet today.

But a system is a thing you do to maintain, and even improve.  At least for me, when I hit my weight goal, I’ll have in place a system to maintain.

All that being said – I still have goals.

Finding your goal for some of you is probably the easiest thing in the world, but for me it was hard, and I’m not sure I’m fully there even now.  I read dozens of books and websites, and two of particular help were The Nine Laws and Halftime.

Particularly useful for me was the exercise (in both books) that deals with owning up to your own mortality and deciding what you want to be known for.  Spending a few hours in that thought bubble will help you understand what really is important, and will get you focused on what is really missing in your goals.  And, in future posts, we’ll come back to that, too.

“Now What?” for me (at least in part) are these words I’m writing to you right now – it’s my goal to be an uncomfortable influence on you every day (okay, at least three days a week, Monday, Wednesday, and Friday) to ensure you wake up .  My goal is to be like Tony Robbins©, but with less hair, stalking you via this blog to encourage you on rough days, and to inspire you on good days to make them great.

Now, get up, get going and make the world awesome.  Otherwise I’ll make you drink hot Tang©.