I recently had the first on-site social event for the people I work with, at a major technology company. My coworkers had all gathered for dim sum. As we were sitting around a table at a Chinese restaurant, I asked everybody “who here has been told that you must work hard to do well in life.” Everybody at the table raised their hands. Hopefully this is not a surprise.

Then I asked, “who here has been told that you need to make good investments if you’re going to have a good life.” Nobody raised their hand. Is that surprising?

All of these people are employees of a big tech company. We all have a bright future ahead of us. I don’t think this is simply because we are hard workers. I think it’s because of the specific kinds of work that we elected to do. This much is probably stating the obvious. What isn’t obvious is this: I think my coworkers at this big tech company have financially comfortable lives ahead of us primarily because we made good investments when we were adolescents.

This is the critical advice I think young people really need to hear: even more important than working hard is knowing how to make good investments.

At this point you might be thinking “but I’m not an investor.”  If you are thinking this, then you are my target audience. Whether you realize it or not, yes, you are an investor. Investing is not some game humans made up: it’s a basic part of reality for all organisms. Investing is what squirrels do when they bury acorns. Investing is what birds do when they give food that they could eat to their young. Investing is what penguins do when they forgo food to keep their eggs warm.

Anyone who gives up something now, in exchange for the chance of some good happening in the future, is an investor.  Everyone who can work  is an investor. Everyone who raises children is an investor. Anyone who teaches others is an investor. Unfortunately,  a lot of people have this idea that investing is something you only do with large piles of money. This kind of thinking is wrong.  It’s the kind of mistake that can lead to you living a very difficult life no matter how hard you work or how good of a person you are.

Everyone invests their time and energy. Some people invest their time in getting into arguments with strangers on the internet. Other people invest in practicing piano. Others invest it in learning how to repair air conditioning systems. Some investments can pay off in the future. Most investment options will not. Being a good investor means being an accurate judge of likely future consequences of your decisions.

Good Investing Means Making Good Choices

If you cannot tell the difference between a good use of your time, and a poor use of your time, I promise that you will live a difficult life. Conversely, if you always use your time wisely, in ways that provide you with long term value, I can state with absolute certainty that you will live a good life. I can say this with certainty because I think it would be impossible for anyone to always make good use of their time. Always making good use of your time would be like playing a perfect game of chess against the most powerful AI in the world – sure, if you make just the right choices, it’s doable. It’s doable in the same way that factoring a ten million digit integer is doable: it’s computationally difficult, and none of us have infinite computational resources.

This is not an argument that you should never relax or play piano or spend time with your friends. On the contrary! Doing those things can replenish your emotional energy. Doing those things will reduce your cortisol levels and lower your resting heart rate. These activities will lower the probability of your body producing unhelpful stress responses. Indeed, there are plenty of people whose long term success is constrained because they work too much and never relax!  Time spent relaxing is a critical part of any successful investor’s portfolio – but it’s also important to diversify! You could spend too much time doing those things as well.

Am I saying that a good life requires wealth? Yes. And this is obviously true so long as you have defined wealth properly.

It’s Definitely Not All About Money

Wealth is anything that can provide you with good feelings. Friendships are wealth. Children are wealth. Musical ability, through sustained practice, is wealth. Romantic relationships are wealth. Faith is wealth. Peace of mind is a fantastic form of wealth.

I would argue that these kinds of wealth are far more important than money. If you have all of these, you won’t care about how much money you have.  If you don’t have any of these, then no matter how much money you have, you will be miserable.  There have been many people throughout the history of the world who’ve had massive amounts of money, fame, and power – and yet felt miserable because they had no real friends they could trust, no relationships that enriched them, no purpose for which they lived and no faith that they were anything other than a primate, towards the tail end of some probability curve.

Having true wealth – deep relationships, purposeful work, artistic expression – in your life will make you feel good. Having these things in your life will help you to do more good in the world, too. All of these things require time and energy commitments to develop and maintain. These are all good investments! And all of them can be overdone at the expense of other areas of your life. For some people, spending more time with their family might be the single wisest thing they can do to build more wealth for their future. For others, maybe working longer hours really is what they need to shore up a portfolio that is rich in relationships and emotional wealth, but lacking in material comfort. 

So yes, I am saying a good life is a wealthy one. This is obviously true so long as you account for the most important kinds of wealth, such as relationships, meaningful work, a sense of belonging to a community, and a dedication to something bigger and longer lived than you. These are all forms of wealth. None of them will happen without conscious investment on your part. You may have friends now, but if you don’t consciously maintain your friendships, they will die. You may be part of a community now, but if you don’t put in time and energy to serve that community, your sense of attachment to it will fade over time.   You may believe that you are part of something bigger than yourself, but if you don’t serve that cause and take care of it, you’ll eventually stop feeling attached to it.

Ok, so I’m saying you need to make good investment choices to have a good life. Maybe this part is obvious too, and you’re asking what does it mean to make a good choice? 

Look For Exponential Growth

To vastly oversimplify: try to invest in things which grow exponentially over time, yet which are not common. Albert Einstein said that compound interest was the most powerful force in the universe. This was a clever way of referring to exponential growth. 

If you plant one bean, it can produce a bush which leads to many more beans. If you plant those, you’ll have more bushes and more beans. The number of beans you can plant grows in proportion to the number of beans you already have. That is exponential growth. If beans were rare, then this might be a great use of your time! But beans are as common as dirt, so unless you’ve already got a massive pile of beans, and the equipment necessary to water them, protect them from pests, harvest them, and get them to distributors,  beans are not a great investment to get into. They are too common.

On the other hand, consider friendships. Do friendships exhibit exponential growth?  Yes they do! If you cultivate one friendship, your friend will introduce you to their friends as well. You can then cultivate these friendships, and the process continues. The people you can meet through your friends increase in proportion to the number of friends you have.  That is exponential growth.

Are friendships common?  If you already have thousands of friendships, maybe you’ve got enough. But do you? How many people in your life do you consider to be truly good friends? You can make that number go up; it requires consciously being a friend on your end. Reaching out to old friends, wishing them well, and checking in on them is a great investment. 

With relationships, it is definitely not just about quantity. 

Deepen Your Relationships

The more you grow to understand your partner, the more you will change – to be like them in some ways, to be less like them in others. As you do change, the ways in which your partner understands you will change as well. The deeper you understand what motivates your partner, and how they differ from you, the deeper you will understand yourself, and others in turn.  As your understanding grows, you will notice ever more subtle details, many of  which were previously invisible to you. Thus, the more you understand, the more your potential for future understanding grows. Because this process of understanding changes both you and your partner, there’s no end to it. The bigger it gets, the more chance it exhibits for growth. 

You might see your relationship with your partner as being a fractal boundary between the two of you. The bigger your understanding gets, the more detailed it gets, and thus the more space there is for you to add further details. The closer you get to your partner, the more subtlety there will be in the differences between you. This is exponential growth.

A similar pattern is true even for casual relationships. As I’ve gotten older, I have been surprised at how incredibly valuable I find my oldest relationships. I am in contact with a few of the people I went to grade school with, and even though our lives have diverged wildly, I find something incredibly satisfying about spending an afternoon with one of these people I’ve known for more than 85% of my life.

Personal Growth

A lot of this talk about investing requires patience. Who wouldn’t like more patience? I know I would! I also know that I have more patience than I did before, in part because I’ve invested heavily in cultivating my own skill of patience. How do I do that, you might ask?

For starters, a key portion of my ‘relationships’ and ‘meaning in life’ portfolio are my young children. In addition to providing me growth exposure in depth of relationships and a meaningful life, my kids regularly help me practice the skill of patience, which strengthens my ability to do so in the future. Children are masters at teaching you patience, as long as you’re willing to pay the tuition.   The more often I practice patience, the more present I feel, and thus it is easier to spot little opportunities to practice patience. Exponential growth once again!

Just like patience, it’s possible to grow other skills like self-control and confidence using a similar exponential process. Wouldn’t you like more confidence? Wouldn’t you like more self-control? Or what about peace of mind? Neuroplasticity allows you to change your brain over time. The more self control you have cultivated, the easier it is to cultivate more. Just like beans! All of these things can grow exponentially as long as you take the time to invest in growing them. This is why I think good investing is critical to a happy life.

When you take the time to meditate and become mindful of the thoughts that arise in the present moment, you are investing in your own peace of mind. When you do something as simple as make a consistent habit of brushing your teeth and flossing your teeth every night, you are building evidence that you have the ability to set and accomplish your own goals. When you accomplish even simple goals, you now have evidence for the proposition “I am  capable of accomplishing goals.” You can now grow this pile of evidence and increase the size and scope of those goals. The more evidence you have that you can accomplish your own goals, the more you’ll be capable of accomplishing increasingly challenging goals. Exponential growth!

If you ask any executive, any vice president of a major corporation, anyone who is responsible for hundreds of people’s daily activities, they will tell you that it is essential that you learn how to prioritize. They will tell you there are a million different things they would like to be doing every day, but they can generally only do two or three. For almost every single person who is very successful, one of their rules will tell you that prioritization is critical. They will leave many good things undone, precisely so they can choose the very small number of things which are their best options for doing. In other words, they are choosing the best investments they can.

I don’t know you (unless I do, in which case, hi!) I’ve never met you. Maybe I never will. But I know a lot about you already. I know that you only get 24 hours in each day. I know that with the current technological trends you have somewhere around 100 years to live. I know that in this timeframe if you consistently apply effort towards growing something exponentially, that you are capable of extreme accomplishments that nobody on earth has touched.

I can’t wait to see what those are… although, to be fair,  I am getting better at waiting 🙂