A Learning a Day

A friend recently started “Designer Discount Club” based on a simple premise – you shouldn’t need to pay retail prices on quality furniture or home decoration.

Interior designers get sizeable discounts on these purchases. She’s now made those discounts accessible to everyone. We tried DDC for two purchases recently – it is simple and it works.

It got me thinking about other such insider discounts and “velvet ropes” that I don’t pay attention to – except in the case of outlier financial transactions.

That was when I reminded myself of the trade-offs of a satisficer strategy. I miss many opportunities to maximize every day and likely lose a lot of money because of that commitment to simplicity. Every strategy has trade-offs.

But that makes me even more grateful to businesses like DDC which make it simple to save money. A win-win. Good luck DDC team – wishing you lots of growth in the years ahead.

PS: If you’re in the market for some home decor or furniture, feel free to use this referral link to skip the waitlist.

I like picking up personal finance books from time to time. I thought Scott Galloway’s book on wealth would be thought provoking given I’ve read many of his riffs on his newsletter. It was.

That wasn’t because there was a novel idea I’d never come across before – instead, it was because it was a well put together synthesis of timeless personal finance and investing wisdom. My reflections –

(1) Most people are going to get wealthy slowly as a function of their ability to deploy capital that compounds over time.

(2) Always watch your burn. A dollar saved is more valuable than a dollar earned (thanks to taxes). Being able to live simply goes a long way in our ability to accumulate wealth. And if there’s one personal finance habit that helps above all others, it is tracking our spending.

(3) To build a great career, don’t follow your passion. Follow your talent. Then work hard at it – being out of balance in your 20s and 30s often gives us balance in our 30s and 40s. Get into the office, do the work.

(4) Diversify. Start with ETFs that cover the stock market. In time, make sure you’re exposed to different kinds of risks. Scott advocates testing buying and holding individual stocks we have conviction in with <=20% of our portfolio. He is also a proponent of real estate investing if you can handle the overhead (property management, maintenance, etc.)

(5) Get off social media and anything that results in us comparing our wealth. Someone will always have the bigger boat.

It was a well put together book – it is one I’ll be recommending.

A simple way to reframe getting things wrong this time is that it is the tuition we pay to get things right the next time.

It is then on us to make sure we’re making the most of that tuition.

Getting things wrong aren’t one-off events. In fact, the more we analyze our mistakes, the more connections we make with seemingly unrelated mistakes.

Make the most of that tuition.

“When they go low, we should go high” is one of those ideas that is infinitely easier in theory than practice.

The flip side of our desire to reciprocate a good deed is our desire to pay back a bad one.

It is of course wiser to let it pass.

But we earn our wisdom from ignoring (sometimes fighting) such impulses.

“Don’t overreact to any stimulus” is both as simple and as profound as universally applicable life advice as it gets.

Science: Analyzing each mistake and ensuring we learn from it.

Art: Knowing which mistakes to spend our time on.

When we prioritize our time, it is normal to prioritize items that have symmetrical upside and downside risk. These are items that present a good amount of upside when done well and vice versa when done poorly.

The challenge, however, is slotting in items that present asymmetrical upside and downside risk – especially those that have little upside but prevent significant downside.

These items are challenging because they often fall to the bottom of the priority list because they aren’t as interesting as other items with more upside. We then don’t do them well and are left with a lot to clean up.

Pay attention to both the upside and downside risk of any item on your priority list.

Especially the downside risk.

“If you have competence, you pretty much know its boundaries already. To ask the question of whether you are past the boundary is to answer it.” | Charlie Munger

When we are well-calibrated on what we don’t know, we do a better job preparing for the problems this ignorance can bring.

That preparation, in turn, leads to see beyond corners and anticipate the twists and turns ahead.

A simple predictor of mastery in any discipline is our ability to see beyond/around the corner.

Amateurs react, pros respond, masters anticipate.

When the transition to solar energy began moving at exponential pace a few years ago, the biggest open question was how we’d solve the daily intermittency problem. For example, what happens when there is cloud cover? And what happens during the evening peak (4pm-9pm)?

The answer was batteries. As battery prices continue to come crashing down, we’re starting to see this play out. This graph shows how this transition is playing out.

In April 2021, solar power was already dominating consumption. Now, thanks to batteries, stored power is beginning to take a big chunk of the evening peak as well.

I see this play out on a micro-level as well. This is exactly how we power our home. We avoid using any power from the grid through the evening peak because of the battery (80% contribution) and conscious usage (i.e., we avoid using heavy usage appliances – 20% contribution).

This combination of solar and batteries is going to increasingly become a no-brainer combination in most places that receive decent sunlight – as Texas continues to demonstrate. For years, California was the undisputed leader in solar deployments and battery storage. But Texas is on pace to add more grid batteries than any other state and could end 2024 ahead of California in total solar deployment. This rise is thanks to Texas’ famously decentralized energy marketplace – energy entrepreneurs are quick to spot a good deal.

Long may this continue.

Note: We still don’t have a solution for seasonal intermittency. Given the pace of innovation here, I hope to have a similarly positive update on that in 2027.