A bank I worked for paid an advertising agency hundreds of thousands of dollars to come up with a new slogan to excite customers. It was a big deal. The slogan? “Reach!”
The problem? It didn’t make any sense to any of the employees or customers. It quickly went into the dust bin of failed advertising campaigns. There was much grumbling about the huge waste of money.
Oddly enough, years later, I now get it. I just finished a book by Matt Ridley, How Innovation Works and Why it Flourishes in Freedom. It’s a great read and covers innovations of incalculable value like the steam engine, to the mundane, but useful, wheels on luggage. I appreciated the lessons explaining why our standard of living is unparalleled in human history due to innovation.
The topic of raising innovators came up this week as I was watching a Disney movie, “A Bug’s Life,” with my grandchildren. In the movie, a simple leaf falls into the path of some ants carrying food back to their ant hill. They panic because they had no idea how to deviate from the original plan and chart a new course around the leaf.
Having managed people most of my career, I have known some who acted like those ants. When an obstacle came up, they had no idea how to solve it and came to me for directions. Others, were wired to solve problems and would often let me know only after the problem was solved. I cherished those employees.
What makes some people problem solvers and others helpless? The answer, if Ridley’s book is accurate, is critical to our future.
History provides some clues. Consider some powerful examples that show the earlier we begin taking responsibility to achieve on our own, the more likely we will be game changers as adults.
Leonardo Di Vinci began creating as an apprentice of an artist at age 14. Walt Disney began making his own money at age 11. Andrew Carnegie finished school at 12 and learned how to run a telegraph so he could become the family’s main bread winner. 13-year-old Steve Jobs called Bill Hewlett and received a summer job at HP. Bill Gates began writing computer code at age 13. Warren Buffett had earned today’s equivalent of $53,000 by the time he was 16 by delivering papers, selling old golf balls, buffing cars, and setting up pinball machines in barbershops.
Today it’s common to extend adolescence and delay adulthood. Kids can relax knowing their first 22 years will likely be formal schooling. But my contention is taking on responsibility beyond formal schooling early in life works the way compound interest grows our money. The earlier we begin, the bigger the results later in life.
So how do we gain this capacity to act independently? Here are four considerations for how we can accelerate flourishing in life.
First, starting with children, consider toys that allow them to create without adult rules. Spending the last two weeks with my grandkids, it struck me how valuable Lego toys are in developing personal responsibility.
My four-year-old is particularly adept at planning his building projects and then accepting failure when a tower falls over or a key part is missing. He just starts over.
I saw the same proactive lessons taught when computer games like SimCity and animation software became affordable. Those games allowed kids to construct their own city or screen characters with unfettered creativity.
Today, I see adults who grew up on such toys are creative in running their own businesses and lives. Games like Legos and SimCity can be a part of forming that robust enjoyment of taking on life’s challenges.
Second, we want to be sympathetic with those who need a hand. But for those locked into a mindset about how tough their life is, there is value in reading good survival stories. I’ve prescribed this medicine to many people over the years with good results.
True stories that demonstrate how people have overcome incredible difficulties challenge our beliefs that our problems are intractable. In fact, obstacles in many religious traditions are seen as being placed there for our own good. Stoic’s have a saying, “The obstacle is the Way.”
Fortunately, there are many books that show how obstacles can be overcome and lead to a new, better life. A few of my favorites include Undaunted Courage (Lewis and Clark), Endurance: Shackleton’s Incredible Voyage, The Long Walk, Unbroken and Lone Survivor. These books have all inspired me to have a proactive attitude when facing problems.
Third, as the world changes, we need to support ideas that encourage innovative thinking. The college experience, for example, was great for me. And it will be the right path for many in the future.
However, instead of assuming everyone needs to attend a four-year university, consider initiatives like the Thiel Fellowship. In short, this Fellowship awards young students $100,000 who want to build things instead of sitting in a classroom. They spread the money out over two years as students work on innovative projects of their own choosing.
Finally, for all the advantages of living our lives full of proactive initiatives, as we’ve discussed so far, it’s also important to remember that most of this doesn’t apply when it comes to our investing strategy.
As advocated by investment gurus ranging from Burton Malkiel to Warren Buffett’s partner Charlie Munger, a great investment strategy is,“don’t just do something, stand there.”
In other words, the low-cost diversified index fund is a great way to invest because it will capture the winners in innovation for us. We don’t need to figure out who the next Amazon or Apple is going to be. Those stocks will be in a total stock market index fund.
We’re better off living our lives conquering new heights in our area of expertise than trying to time or beat the market. When it comes to investing, “Don’t Reach!”
If you have a story of how you encourage others or yourself to “Reach,” I hope you’ll share it.
Joe Kesler
Smart Money with Purpose
