ITYSKA #8: Learning, Money Habits, and the Rich and the Wealthy
What is the connection between all of those things? Let's find out!
I’m going to try something a bit different with this newsletter. For this edition of Interesting Things You Should Know About, I’ll be talking about three ideas, three facets of life that are all connected in some way. I’ll explain all three of these individually and then towards the end, I’ll tie all three of them together and show how they’re all interrelated in some way. It’ll be quite the experiment for this newsletter and I don’t if this is just going to be a one-shot, one-time-only thing, or if I’ll continue to do this style of writing but we’ll see where this goes. There’ll be links and sources throughout, but no list of articles, videos, websites, or books I’ve consumed this time around. Once again, trying something new here. Without further ado, let’s start with our first idea.
Idea #1: Ultralearning
A major focus of mine for the past few months is learning how to code. It’s a completely new endeavor for me. I have never learned coding before in my life and there are times when I feel like a fish out of water, barely knowing to get my feet off the ground. The entire course is completely online and there’s no set deadline or the specific time when and where I take the place. On one hand, there’s a lot of flexibility when it comes to scheduling and the location of where I can learn. On the other, I could easily slack off and procrastinate when it comes to online learning, so I have to keep myself accountable, or else I get nothing done. Despite this, I’ve managed to knuckle down and finish about 50% of the course in just two months. The course is all about the basics of HTML and CSS, the building blocks of web design and web development. I’ve made mistakes along the way and I don’t claim to know everything, but I’m understanding the basics little by little.
To help accelerate the learning process, I bought the book Ultralearning by Scott H. Young. It’s a fantastic book that’s all about learning new skills, tips and tricks on how to learn efficiently, and a helpful resource when it comes to acquiring a new hobby, pursuit, instrument, or language. It’s been a wonderfully helpful book when it comes to my own self-directed learning endeavors.
If you want a summary of the book, the core of Ultralearning is all about following the nine principles ultralearners use to maximize their learning projects. The nine principles are the following:
Metalearning: What skill do you want to learn? How do you want to tackle the subject? Why do you want to learn it in the first place? Do your research, draw your map, and draw on your past competencies to make learning new skills much easier.
Focus: Practice the ability to concentrate. Find the right time and environment to focus on learning and sustain that focus for a long time.
Directness: As someone smarter than me once said, “just do it!” Ask yourself when and where the knowledge you will be applied and learn by doing the things you want to become good at.
Drill: Attack your weak points. Break down complex tasks into small parts; master those parts and build them back together again.
Retrieval: Test yourself on what you’ve just learned. Practice recalling what you’ve just learned will help you learn new information and enhances future learning.
Feedback: The hardest of the principles. Don’t let your ego get in the way of knowing how to use it. Know what to pay attention to and what to ignore.
Retention: What are you forgetting and why? Learn to remember things not just in the short-term, but in the long term.
Intuition: Know the difference between knowing vs. understanding. Develop your intuition through play and exploration of concepts and skills.
Experimentation: There is no true endpoint when it comes to learning and following your curiosity. True mastery comes from exploring all the possible paths that haven’t been imagined yet.
That’s the essential gist of the entire book. If you want more details and examples of how these principles are applied, just read the book yourself. I would also like to add another tip on how you can Ultralearn: find a good mentor. Finding a good mentor can be the critical difference between truly engaging in the material and just trying to plow through it as quickly as you can. Sometimes that mentor can be an actual teacher in a classroom. Sometimes that mentor can be someone you interact with through a computer screen. Other times it can be a whole community of people who have already gone through the journey themselves and have the experience to transfer that to you. All it matters is that you find someone with more experience than you to help guide you.
Idea #2: The Habits of Millionaires
That brings us to our second idea: how do millionaires attain their wealth status? According to this study conducted in 2004, they interviewed a total of 225 millionaires and they fell into four different categories:
Savers and Investors: Saving and investing their money is a part of their set of habits, they always think about the best ways to grow their wealth no matter their day job.
Company Climbers: This group devotes a large portion of their time, energy, and focus to working for a large company and climbing the corporate ladder until they suit themselves up for a senior executive position - a position with large salaries.
Virtuosos: The ones who are the best at what they do and get paid handsomely for their knowledge and expertise. As you can guess, they are one of the two groups that directly deal with ultralearning. They spend a lot of time attaining and retaining that knowledge, and the rewards for it are pretty staggering.
Dreamers: The other group that is also directly involved in ultralearning. Unlike the virtuosos, they are all focused on pursuing a dream, whether it’s starting a business, launching a top-selling video game, or running a cooking class. Dreamers love what they do, with the cash that they make often being secondary.
While four groups involve learning in some way, the last two involve spending large portions of their time perfecting their craft, interacting and connecting with the right people, and putting the tools and skills that they have learned into practice. There’s not only an intrinsic satisfaction when it comes to ultralearning, but also a financial incentive as well.
But here’s where the tricky part arrives. Building wealth is one thing, but keeping it is another. There are countless stories out there of people who amassed a fortune either by swiftly launching a software company, being a multi-platinum selling artist, or just plain dumb luck AKA the lottery, only to lose it all through a whole combination of reasons completely, a lot of it involving not knowing how to use that money.
One of the ways we can handle this dilemma is by understanding the difference between being rich vs. being wealthy.
Idea #3: The Rich and The Wealthy
Plenty of people equate being rich with being wealthy. While there is a lot of overlap between the two, they are not one and the same. Definitions of what can be considered rich and what can be considered wealthy can vary. To make this easier, I will be using the definition provided by Morgan Housel, author of the Psychology of Money and partner for the Collaborative Fund. I consider him the defacto expert when it comes to managing wealth and finances and he’s written excellent articles on those topics.
Anyway, when it comes to his definitions, “Rich means you have cash to buy stuff. Wealth means you have unspent savings and investments that provide some level of intangible and lasting pleasure – independence, autonomy, controlling your time, and doing what you want to do, when you want to do it, with whom you want to do it with, for as long as you want to do it for.”
Housel uses the story of the Vanderbilts about how they used their money and how much of a curse it was, as much as it was a blessing. The point he’s making is that the money I make shouldn’t be that different from the money you make. How much we value money varies among individuals, even those who have the same background, the same education, the same set of skills, and the same income and net worth.
And this is where we circle back to our first point. We can spend so much of our time learning new skills, climbing the mountain, and achieving our desired lifestyle. But the real challenge is keeping that lifestyle in the long term. Many of us are not good at thinking in the long term and many of us who are good at making money tend to fail at keeping it.
There’s nothing wrong with liking nice things. I like nice things too. If I didn’t, I wouldn’t be collecting things like vinyl records. But all of us should be mindful of what we’re spending our time on and what we’re spending our money on. All of us should ask “Am I controlling my money or is the money controlling me?” Controlling how we spend our money and how we save it is a valuable skill, just like a lot of things in life.