Self Determination and Personal Flexibility

‘Nothing is impossible. The word itself says I’m possible’ Audrey Hepburn

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As an adult, each day we influence the World. And the World influences us back. On the bad days, it all seems a bit David and Goliath. On the good days, a simple walk in a public park, shows us the big, open skies.  Something amusing, the beauty of nature. Some clever landscape design. Some businesses & brands selling us yummy food and drink. A bit of structure and boundaries. And a diverse bunch of people of all ages having fun together. A microcosm of the wider World.

On the David and Goliath days, it’s natural to think we have little lasting influence over others. Meanwhile, the World bombards us with endless messages. We personally see bad things happen to good people. And the media focus on negative, sensational news, makes us weary of human behaviour. And the future generally.

Perhaps our own influence (the power of one and the power of self belief) is bigger than we think. While the World’s ability to sap our spirit & bend our goals, isn’t as strong as it first appears.

Life is full of surprises. And the rate of progress uneven – exponential is the new linear. A part of Personal Flexibility (PFL) is about running with a baton in each hand – the plans in one hand and the means to cope with surprises in the other.

Personal Flexibility should be more than free will. Or more than free will put into action. We owe it to ourselves to create choices. To do worthwhile and worthy projects in our lives (create meaning).

If we build strong relationships and solve significant problems, the rewards will buy us the freedom to determine our own futures, within reason – in a word, self determination.

Self determination exists at the level of the person and at the level of the family. In the same way the family’s identity is the sum of the identities of its members, a family’s self determination is also the sum of the self determinations of its family members. For family self determination; the family traditions, referencing your roots, the guidance passed down from one generation to another, all clash and contrast with the headstrong actions of individual family members, to break free from the past. To copy their friends. And change with the times.

Self determination also exists at the level of the community (think neighbourhood watch schemes, block parties, local business actions, recycling ventures, local stadium events, community festivals). And it exists at the level of the state (in the UK, think Brexit. Elsewhere, think independence from colonial rule).

For self determination, if the whole is the sum of the parts, PFL takes on a vital role in one respect. Balancing off individual self interest (greed & self benefit) versus achieving benefits for a wider good. Even the richest people know their money is of little value; if the air is toxic, if rising oceans flow over their land, if too many people populate the Earth. If there is no future for their own children.

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A final thought. At the person level and even at the family level, if self determination is somewhere on the road to happiness, PFL is a warm, friendly vehicle to offer us a faster ride in that direction. What do you think?

As always, if you find these blogs interesting, feel free to tell others.

Simon

Making Judgements and Personal Flexibility

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A work colleague told me you shouldn’t judge people.  The trouble is, our economic, political and legal systems depend on someone judging something. Judgement of a chief exec’s ability to build customer support and create shareholder wealth. Voters on Election Day judging the government and its leader’s performance to date. Jurors deciding whether someone accused of a crime is guilty, beyond all reasonable doubt. We even make a safety judgement, when we let another person drive us somewhere in the car.

So if at times, we have to judge, does having more personal flexibility (PFL) make for better judgements? Ones that are fairer or more accurate?

Take a moment to think about how you make a judgement. Is it:

  1. First impressions rule ok.
  2. I’ll stay unconvinced until you prove it to me.
  3. I just don’t believe the so-called evidence you’re providing and serving up more of it won’t change my view (I suspect you’re lying).
  4. I’ll go with what I think is the most moral option.
  5. Which option will benefit me the most?
  6. Which option is the least risky?
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So how can Personal Flexibility help? One way is to select from a wider set to tools, on a case-by-case basis. In other words, don’t just apply one of the above approaches to all situations needing your judgement. In more other words, first judge which approach to use for the situation at hand. Maybe try making a second judgement (of the same situation) using one of the other approaches. See if you get the same result. If not, try adding a third approach and go with two out of three. If you face a really tricky situation, where you have to make a judgement call, apply all of the above, putting different weighting’s on the approaches if you have to. And add up the overall score (for or against).

Another way is to make a judgement. Observe the result with an open mind, And then change your judgement if need be. Changing your judgement isn’t weakness. Instead it’s evolution. Smart researchers who go on to develop wonder drugs, clever engineering solutions, or win Nobel prizes, aren’t afraid to evolve their theories if need be. Brave and respected politicians likewise.

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A further way to decide is the ‘Benjamin Franklin’ approach. Write down a list of pros and cons. Then go with the overall result, taking into account that some on the list might be significant and others minor (split each list into significant and minor items if need be).

If you find these blogs useful and meaningful, feel free to tell others.

Simon

Personal Flexibility and Time Management Revisited

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The Royal Trinity Hospice in London apparently has a motto ‘living every moment’. It’s a great one for terminally ill people, to make the most of the life they have left. Essentially it’s about enriching time.

If you’re pushed for time, try the technique of playing for time. Tell someone you can come up with a good answer or solution – perhaps better than they’re expecting. But you need another x hours to do so. This blogger has been in a couple of life-threatening, outdoor situations, slammed by multiple problems at once. Playing for time (the plan ‘B’), can literally save your life.

Staying in time (being a slave to the rhythm) can ease the burden. Especially if learning something new like; dancing, singing, swimming, marching, relay races or three-legged races in some parent-child, school event. Making love or debt repayments. Or following that car in front of your one.

Paying for time is a great solution for income-rich, time-poor people. Or those doing online grocery shopping because they don’t want to spend time driving to the store and shopping in person.

Making time and keeping time are like what you should do with promises. Choose carefully how to spend your allotted time (and choose your promises carefully too, preferably under-promise and over-deliver). Keep track of whether the time (and effort) invested is paying off in some way for you. We don’t have to charge for our time. But it’s ok to have expectations.  That in return for your valuable time, something positive should result.

Leveraging time is about reaping multiple benefits from one action. Lazy people love it.

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Use your daily work commute productively, not simply as an entertainment opportunity. Let your car’s onboard computers automatically handle more support aspects of your driving experience. So you can have a rewarding conversation with passengers instead.

Juggling time (or thin-slicing your time) is about juggling lots of loose ends, when you face delays and lead times. This blogger was recently given the job at work of setting up a new office in a foreign (non English speaking) country in Europe. As you can imagine, loads of signed form originals and ID documents were required, all referring to each other. Since you can’t complete any one aspect in its entirety, juggle the steps in the various processes concurrently instead. It is effectively filling in the waiting time with productive work. Accept that progress is uneven and therefore do planning ahead of time. And fact-find in the quiet times.

As always, if you find these blogs inspiring or thought provoking, spread the word for others to benefit too.

Simon

Household Budgeting and Personal Flexibility

Firstly a caveat: this particular blog isn’t meant to offer specific financial advice to the reader about what investment products or investment classes to invest in. Readers should seek professional advice to help them understand the risks and choices available relating to financial products made available by particular providers.

What is a household budget?

It is simply looking at a period of time, such as the next 12 months. And listing both household income and expenditure over that period, with a reasonable degree of accuracy. If there is little accuracy, the list is merely a dream.

Secondly, try not to confuse precision with accuracy. Precision might estimate items on the list to the nearest penny. But that doesn’t mean those numbers are accurate. Accuracy is about being broadly right (to the nearest one thousand dollars or pounds say).

Fixed costs and volatile costs

Some household spending items are easy to estimate. And won’t change for the foreseeable future. For example, agreed mortgage payments, or room rent.  Others are inherently uncertain. For example, repair costs. Or the earnings & duration of the next ‘gig’ for gig workers.

Volatile costs are a form of uncertainty. And uncertainty can be managed by improving your personal flexibility (PFL). See my blog on ‘Personal Flexibility and Uncertainty’ for more on this.

When you put together your annual household budget, try to identify which items are fixed (reliable) and which line items are volatile. How volatile? Plus or minus 20% volatile? If there are lots of volatile items and the level of volatile (plus or minus) is significant, you could usefully do a ‘best case’ and ‘worst case’ version of your expected budget. Then as you monitor your actual progress against your budget during the year, you can start to take steps. For example, if your household budget increasingly moves towards the worst case version, then as soon as possible, start cutting back on discretionary spending. Or increase the income sources. Likewise, if the actual budget increasingly moves towards the best case version, try to actively save those extra funds ‘for a rainy day’. By increasing your household savings, you are making your PFL stronger.

Lines of credit

It is tempting to use your lines of credit (bank account overdraft or credit cards) to bridge the gap between household income and spending. Try to resist living your life on credit. That resistance will save you money. And increase your PFL, by giving you more short-term options if you need money in a crisis.

Budgeting for time-poor budgeters

The household annual budgeting can be as much of a chore as you want to make it. For my own household budget, I spend as little time preparing & monitoring actual spending as I can get away with. And it certainly isn’t itemized to two decimal places of precision!

Budgeting for big ticket items

How do you budget for big items on your annual household budget? The solution is to slowly save up for them. And buy them when you can finally afford to. Or to use bank loans to buy them. And pay off the loan at a rate you can comfortably afford over time. You’ll need a good credit history to get a bank loan, so bear this in mind.

You will have more personal flexibility, if you slowly save up (no interest costs) to buy the big ticket items. Perhaps think about taking out a loan to only buy big items that will go up in value themselves over time. But where you get a benefit from them every day. For example, a property comprising a home on some land you own. That said, buy at a good price and try not to buy land in an area prone to flooding, coastal erosion, hurricanes etc to reduce your risk.

Quick wins and small triumphs

Try if you can, to have some items in your annual household budget that give you & your family some quick wins and small triumphs. You can’t live your entire life saving up for the things you want. And never actually see any benefits along the way.

Single benefits and family benefits

Try if you can, to include some items in your household budget that benefit the whole family. Not just one or two members. It’s a bit like in the workplace, if the employer offers a pension scheme, all staff can benefit. If they only offer childcare support, or a commuter train travel loan, staff will benefit unevenly.

Time and money trade-offs

To some extent, budgets are a trade-off between time and money. For people who are time-poor but money rich, they pay for more support services and that is reflected in their household budget. For those in the opposite position, they have more of a do-it-yourself culture and save money by say growing their own food, doing childcare inhouse and cooking their own meals. Be realistic about your budget and what trade-off will work for your household.

Budget trade-ons versus budget trade-offs

One way to improve your budget is to look for tradeons rather than tradeoffs. A trade-on is like a double benefit. For example by cutting back on expensive entertainment and doing some self-study instead, you increase your marketable skills (to earn more income), but save money in your household budget as well.

If you prepare a first version of your annual budget and don’t like the result, look for some trade-ons to make the budget more viable.

There tends to be a positive correlation between trade-ons and PFL i.e. the more of one, the more of the other is possible.

Lastly, if you find these blogs useful, please spread the word, so others can benefit too.

Simon

Managing Uncertainty and Personal Flexibility

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How does personal flexibility (PFL) help to manage uncertainty? First, let’s look at what uncertainty is and how it arises.

What uncertainty is

Firstly, uncertainty can be positive as well as negative. Why positive? Not knowing who your future soul mate is, or whether you will even find one, makes life exciting. And probably changes your behaviour for the better too.

Two kinds of uncertainty are:

  • The known unknowns. We might know the current membership of those we are related to by blood. What we don’t know, is exactly when that membership will change (births and deaths). Another version of this is the second-order unknowns. We don’t know the names of our children’s children if we haven’t had children of our own yet.
  • The unknown unknowns. This includes unconscious incompetence. We aren’t sufficiently aware that we aren’t equipped to solve a problem. We wade in and act. And then anything is possible!

Our influence on uncertainty can vary too.

  • A small intervention on our part, can have a large influence on the level of uncertainty present. For example, we visit our doctor/dentist before the effects of a persistent ache become a bigger problem for us.
  • The level of effort on our part can essentially match the change in the resulting uncertainty.
  • It might take a large intervention on our part, just to achieve a small change in the level of uncertainty in something we encounter – think of raising a teenager.

We might put in place some risk mitigations to deal with uncertainty. The trouble is that we aren’t so good at identifying if we have enough types of mitigations. Belt alone? Belt and braces? Belt, braces and seatbelt too? Belt, braces, seatbelt and airbags? We aren’t so great at judging the relative strengths of those mitigations either. That’s one place where personal flexibility is helpful – design, test, assess then modify.

How does uncertainty arise?

  • Unknowns can arise because of big external changes. War is declared. Brexit is activated. A massive natural disaster hits an area.
  • Unknowns can arise because of a lack of information. For example, customer demand for a new product can only be estimated. Until the market reaction is seen. And actual trends understood.
  • Unknowns can arise because of a lack of time. For example, time to research the facts and solve a mystery is lost, as new events create new crises that take priority.
  • Unknowns can arise because of attitude– progress is undermined due to bias. For example, people with control of certain information choose to discriminate and not make it available. ‘Need to know’ and early tip-offs are related examples.
  • Unknowns can arise because of volatility. For example, rescue services, trying to assess actual threat to life in a hurricane, is hampered while conditions of extreme turbulence prevail.
  • Unknowns can arise because of a lack of buying power to control or influence certainty. If we can’t afford to buy real options, it can be hard to acquire them.

How can personal flexibility help? 

Broadly, if you see more uncertainty emerging, increase your PFL to compensate. Widen your skill base and diversify your income sources. Teach your children to become more independent e.g. earn their own money. Or shop & cook for themselves.

In the UK, with uncertainty over the Brexit outcome in March 2019, some people are reducing their personal debt levels. Or stockpiling canned foods in the short term. Just in case.

PFL can influence the speed at which uncertainties arise or reduce. One idea is to use PFL to develop some ‘brakes’ and ‘accelerators’ on uncertainty. The point being that just like driving a car, you as the driver control the speed. A simple example is diversifying your income sources to act as a brake on the effects of economic downturn.

Avoidance (risk transfer) can reduce your uncertainty. Hedge some key risks. For example, with professional advisors, influential friends, or insurance products.

As always, if you find these blogs useful, feel free to tell others.

Simon

Real Options and Personal Flexibility

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What has flexibility got to do with options?

Quite simply if you have more options, you have more flexibility. In uncertain situations, or if you are somehow keen to grow (wealth, skills, influence, reputation, character development), having options is valuable.

Of course, having more options isn’t useful if you can’t make a decision when time is pressing. And having a set of options that aren’t relevant to the problem you’re facing isn’t particularly helpful either. Unless you can trade them for the ones you actually want.

What are real options?

They’re not as scary as they sound. Wikipedia says ‘a real option itself, is the right—but not the obligation—to undertake certain business initiatives, such as deferring, abandoning, expanding, staging, or contracting a capital investment project’. In the personal flexibility sense, real options are rights we have paid for in the past and hold.  If the conditions are right, they can be used (exercised) at some point in the future, to buy or sell something to benefit ourselves.  Or benefit those we choose to help.

There are a couple of different types of real options. Call options are options we have purchased in the past, that give us the right to buy something. Put options are options we have purchased in the past, that give us the right to sell something.

What are some examples of call options in our personal lives i.e. things we’ve paid for in the past that give us PFL in the present and future?

  • Loyalty points, or frequent flier points accumulated, that are still valid. Purchase qualifying items and you have the right to use the points to obtain discounts on future purchases.
  • Multiple passports (the legitimate right to citizenship in multiple countries). Pay the application fee and once the passport is issued, you then have the legal right to buy the same things the other citizens can buy.
  • Insurance policies with a claim excess. Pay the insurance premium, make the claim, pay the claim excess and the item will then be replaced.
  • Personal credit cards and overdraft facilities. Pay the annual account fee and any interest charges to access the credit amount.
  • Fitness, health and knowledge you’ve built up, if they qualify you for access to something fairly exclusive in the future, that costs money.
  • Physical and data security measures and investments made. Pay the fee, log your security breach event, pay for the investigation and hopefully damage will be remedied.
  • Divorce papers – once signed and the divorce lawyer costs are paid, the papers give you the right to legally marry another person (providing they’re not already still married).

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What are some examples of put options in our personal lives i.e. things we’ve paid for in the past that give us (or our loved ones) the right to sell and hence PFL in the present and future?

  • Trial period agreements.
  • Product warrantees, price-matching features and money-back guarantees.
  • Sublease clauses. For example, you rent a two-bedroom flat and there’s a clause in the lease agreement allowing you to rent out the second bedroom for financial benefit.
  • Your estate (once you’ve paid the solicitor to draw up your will). Ownership of this option transfers to the beneficiaries of your estate, upon your death.

Real options and student career advice

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In the general education system, little emphasis seems to be given to teaching students how to manage their real options. Then, when students graduate & join the workforce, they lack awareness about real options management in the workplace. Instead, at best, students receive advice from relatives, friends or teachers about getting a good education and working hard, to open up more life choices to them.

Perhaps too many young people learn from life experience – the ‘school of hard knocks’ (why doesn’t Western culture strongly preach the folly of learning this way?). And learn from repeat situations (once bitten, twice shy), that having choices is valuable.

What the young people need is more advice on how not to get bitten. And coaching to position themselves to have choices other than getting bitten. Young adults may also learn from observation – being inspired by designers to mimic the design flexibility that they see.

In the view of this blogger, one of life’s ironies is that for many young people, by the time they realise that older people’s advice to them on the above things is just as relevant today as in yesteryear, the consequences of have few options and choices is already hitting them hard.

In summary, holding real options in our personal lives, is a tangible form of personal flexibility. It follows that if we want to increase our PFL, we should accumulate real options in advance, in the areas of PFL that we want to improve.

Some areas to look at, if personal growth and uncertainty management are some of your goals; obtaining real options concerning wealth, skills, influence, personal reputation and/or character development. A key point is to build up an ‘options portfolio’ i.e. don’t just concentrate on obtaining real options relating to one of them.

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Periodically, we will use or ‘exercise’ many of the real options we hold, so another key point is to replenish our stocks of real options regularly.

If you found this blog helpful, feel free to tell others. Constructive comments are also welcome.

 Simon

Handling Set-backs and Personal Flexibility

Roller coaster rides remain exciting because of their ups and downs. Ditto the stock market, alpine landscapes and city rooftops. Watching a loved one’s heart rhythm on a hospital heart monitor, is to hope for a steady pattern of highs and lows. Not a flat line. And so it is with life – the set-backs provide variety, challenge, a chance to learn from mistakes. Prompts to develop your character (prompts to us become edits by us). And make you appreciate the highs that much more.

Variation with limits is a form of flexibility. A greater form of flexibility comes from putting in intermediate control points, allowing you to influence the degree of variation (variation with sub limits). Guitar players do this when they put a capo (clamp) on their strings to change the pitch of the sound. Car designers use ABS technology to prevent full-on braking by the driver, from locking the car wheels into a skid. Martial arts teachers require role play and play fighting from their students, to train them without bodily injury. All are examples of variation with sub-limits.

When it comes to life’s minor set-backs and disappointments, personal flexibility takes the form of tempering frustration. And converting it  into hope. Hope for cessation, improvement or avoidance.

When the set-back or disappointment is more severe, the process of overcoming shock, a sense of injustice and conversion into positive thoughts, takes more time. And more emotional energy.

When the set-back is large, e.g. the loss of a loved one, redundancy, marital failure, loss of personal reputation or business failure, the tempering & converting needs to become a transformation instead. There is an entire grief cycle to work through. People who see you suffer these extreme set-backs may intervene. But not always constructively. Or when you most need them.

This blogger has experienced some of those larger set-backs. Redundancy was one. After the initial surprise, I had to concede to myself, that in my decades-long career, it would inevitably and eventually strike. And to rationalise the experience in a few different ways. For example, whether applying for a job, or being made redundant, you have to continue believing in yourself. Otherwise, how can you expect others to? For example, seeing job redundancy as simply being surplus to requirements of one employer at a particular stage in their journey. Not as being made redundant from the human race per se. Marital failure. Again, to learn from the experience of marriage and ‘get it right the next time around’. The death of both parents. To see death as a regular part of the cycle of life. To remember all the good things that my parents taught me. To remember them well and to pay something forward. Weirdly, the more you carry forward those peoples’ influence (happy memories, words of support, guidance & advice), the more you also feel their loss. But because you carry it forward and because you’re now a fully-fledged adult, the less you feel it too.

Personal losses and set-backs are a strange thing. For some people, each loss of a loved one, each redundancy experience, or job application declined, simply fuels their negative feelings. And dents their self-image. Where those feelings manifest in a negative self image, a rigid, negative spiral sets in. It can take a lot of emotional energy to get your rationalising head to rule your emotional heart. But you have to ask yourself, what other choice is there?

‘I have not failed. I’ve just found 10,000 ways that it won’t work.’ Thomas Edison

‘Many of life’s failures are people who did not realise how close they were to success when they gave up.’ Thomas Edison

So how can building up your personal flexibility (PFL) help to cope with life’s set-backs? Firstly, by building your PFL in the good times, your resilience to set-backs will increase, helping you cope in the bad times. Build up goodwill, friendship and family ties when you don’t need them. People who care will then reach out to you when it matters.

Second, build up some financial savings in the good times. To have the freedom to engage a counsellor or therapist in the bad times. You never know in advance just how strongly a future set back will  make you feel. And how strongly that need to reach out for professional help.

Arguably, for more severe set-backs you need a combination of loved ones and detached professionals to reach you in different ways. The professional can hopefully get you adjusted to return to regular life. Your friends and family will keep you there.

A final thought. Survival and adjustment to loss are fundamental aspects of life. Their gift to you is to give you the credibility and insight to help those who come after you and suffer similar set-backs. Keep your personal flexibility intact to help them the most.

If you find these blogs useful, please spread the word for others to read them and comment too.

Simon