Tag: Money

The $20 Locker

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Even when this city smacks me, I still see its beauty. 

I love New York’s reasonableness. 

Today I visited a Yankees game. The metal detector dinged on me when I passed. The bag inspector told me I can’t take a laptop inside. He summoned his teammate. His teammate pointed me to a business across the street. He said, “There’s lockers right across the street. They’re not affiliated with us but people use them all the time. When you come back, tell the security and they’ll let you skip the line.” I asked his name. He said Anthony.

The security guards moved the barriers as I shortcutted back through the zigzagging line. I sped across the street. Inside, the worker charged me $20 and ushered me to the back where the lockers live. I placed my laptop inside, pocketed the key, and told him “okay” when he said the locker rental ends 30 minutes after the game. I asked him his name. His coworker said “Ahmed”. He repeated “Ahmed.”

I spent $25 on the Yankees ticket. On one hand, $20 is expensive. On the other hand, the policies are reasonable at every step of the way. Can policy easily distinguish between a laptop and a recording device? Perhaps not. Is this policy public on their website? Yes. Did I check? No, but I could have and that’s my fault. Is there a reasonable solution to this problem? Yes, and it’s not $100 when it very well could be.

When I returned, I told the security guards that I had visited the lockers and Anthony told me to skip the line. My ticket buzzed in, and I retrieved my limited-edition Yankees soccer jersey. For which I paid an additional $10 over the cost of normal tickets. Not because I care about the jersey, but because my father was in town, and he’s always wanted to visit Yankee Stadium. 

Money can’t buy happiness, but it sure can buy the ingredients. 

Rules for Wagering

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To win, follow the rules.

Last night, a new friend challenged me to the video game Pong for $100 a game. He’s a brash guy: aggressive, cocksure; the sort of guy who makes new friends by testing their boundaries. I asked if he knew Pong. He declined to answer. I declined the bet. 

I offered ping-pong instead, also $100 a game. We’d just played doubles on the same team. I’d seen his game. I suspected I could beat him.

Today, I called him a gambler. He corrected me: he doesn’t gamble, he wagers. Gambling is about uncertainty, luck, and chance. Wagering is about wagers (bets). Ironically, this guy’s given name literally means “randomness.”

I don’t enjoy gambling, either. I’ve liked craps once or twice, playing with someone else’s money, but I haven’t enjoyed gambling since a plastic slot machine at 10 years old. I like playing, and I like winning. I don’t gamble because it’s a losing proposition.

Wagering, though, I do frequently. My rules:

Julian’s rules for wagering

1. Don’t wager more than you’re willing to lose. Self-explanatory.

2. Clearly indicate the stakes and the rules. Most wagers fail on miscommunication. Better clear than confused. State the rules and win conditions up front. Repeat the score and the running tally, frequently. Walk over to the other side of the table if the music is too loud for him to hear you call the score. 

3. Get paid. Many wagers fail not from a loss but from a loss of receipt. If you don’t get the money, did you really win?

4. Quit at any time. A different friend doubled the stakes every time he lost, unwilling to stop until he got even. Motivating, sure. But it misreads the value of quitting while you’re behind: the alternative is quitting when you’re further behind.

5. Control your emotions. Anger can make you a better ping-pong player. It can also make you blind to the meta-games. And the meta-games are usually where the money is.

6. You don’t have to earn it back the same way you lost it. When you lose money one way, it’s tempting to win it back the same way. But funds are fungible. If you lose at ping-pong but win at poker, you can stop playing ping-pong. Lean into your comparative advantages: specialize and trade.

Games Played:

I flew out of Chicago Midway today. The metal detector beeped. The agent told me this meant I’d been “randomly selected” for extra screening. I asked if that meant the body scanner. She said yes. I told her I’d opt out. She told me to take off my shoes and run them through, then asked if I’d go through the scanner now. I said no (did she really think removing my shoes would change my opinion?). She summoned a male agent. He asked me to point out my property. I said, “My partner has it.” (She’d known the game was on the second I got flagged. She was capping my downside to enable me to play.)  “All of it?” he asked. Yes. He walked me to a separate lane. I asked how long he’d been a TSA agent. “Since there’s been a TSA.” He started the spiel: “Any sensitive areas, any painful areas?” And then, hot damn, was this guy thorough. As he ran his hands up and down my midriff, Partner made a cupping motion on one of her breasts, seemingly indicating what the agent was soon to do to me.

After the free massage, I returned to Partner with a new glow.

He offered me $4k for 15 minutes of play. 

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I said no. To win the bet, win the games. To keep the winnings, stop while he can still pay.

I’m not skilled enough at ping pong to play for $2k per game. Yet tonight I played ping-pong for $2k per game.

Here’s how:

He asked, “Ping pong?”

I said, “Sure. $100 per game?”

His eyes lit up. “Sure.”

We agreed: game to 21, 5 serves per person, serves must be cross-court.

I won the first game. We played again. I won. A third time: I won.

He said, “Double?”

I asked, “What do you mean?”

He said, “$200 per game.”

I said, “I’m up $300. You want to play for $200 per game?”

He said yes.

I won.

He said, “$500? I need to clear this out.”

We shook hands.

I won.

“$1,000?”

I won.

“$2,000?”

I won.

So now I’m up $4,000. And the biggest danger in this spot is the guy not paying. Because I’d pay a $4,000 debt if I had one. I only make bets I’ll cover. So if he doesn’t pay his debt, he was free-rolling me the whole time. (“Free-rolling” is when you have the ability to win but no ability to lose. If he would collect upon a victory but not pay upon a loss, he’s free-rolling me for the bet.)

I also 1) don’t want him to feel shitty, and 2) don’t want him to stiff me.

So when he says he wants to play for $4k, I know he’s steaming. I know he’s fuming. He’s physically pacing at the base of the ping pong table like Chris Rock on stage. And I don’t know if he’s someone who will actually pay his debt. If he is, we can play for more later. If he isn’t, I don’t want to gamble anymore.

The game is no longer ping pong. The game is: will this guy pay off an $8k debt? If not, I’m taking my ping-pong ball and going home. 

Life Advice for the Laid Off

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To win, see the silver lining. To see the silver lining, get rained on.

Back in college, my roommate set me up on a date with the woman who is now his wife. She texted me earlier today asking for advice. Her husband was laid off in one of those massive rounds you’re hearing about. Here’s what I said:

  • People are rarely laid off from their perfect-fit, dream job. This could be a great opportunity to find something you care about more. Getting laid off is often something very stressful, but also something people are very happy about in retrospect.
    • Another friend lost his job last year. After months of tough (and often disheartening) searching, he found a job that aligns with what he studied in college. His previous job delivered a paycheck. His new job fits his values. It’s no coincidence that those people wanted him: they share values and interests, and we want to be around people with whom we share values and interests.
  • List your values, stack-ranking them. How important is it to you to stay in the house you’re in? More or less important than the industry you work in? Reasonable people might have different preferences. Only by knowing your values can you decide in accordance with them.
  • Venn diagrams are your friend. For him, the intersection could be philosophy, theater, physical awareness, and getting along with everyone. It might be a specific niche, but someone will pay you for it. Are you willing to travel for it? That’s why you need your stack-ranked values.
  • Don’t be the best: be the only. Don’t seek a job where you’re the best; find a job where you’re the only. If you lack competition, people will reward you for solving their specific need.
  • Our economy is currently in a big ol’ unpredictable cluster. (One of my favorite financial newsletters wrote about this the other day.) Consider what bets you’re willing to make. I’m taking out long-term, fixed-interest-rate debt on an income-producing asset. I could definitely be wrong (and I don’t have the license to give financial advice), but it’s a bet I believe in.
  • If you want help structuring your freelance work, give holler anytime. (I’ve helped a few freelancers make meaningfully more money without changing the work itself: just the structures around it: pricing, packaging, billing, contract drafting, and the like.) 

Half of advice is the advice itself. The other half is listening. The third half is being there for someone: kind, present, and caring. And the fourth half is knowing when to stop. 

Games Played

A recurring ledger of games observed in the wild

  • The Global Entry agent at O’Hare Airport hands you a laminated card to carry through baggage claim, then to hand to another agent upon exit. How can this possibly be the best system we’ve developed?
  • Groceries in Chicago are like $80 where the same amount would have been like 20€ (~$25) in France. And you have to use the app to clip the annoying little digital coupon. This digital coupon bullshit is so annoying that it would motivate me to shop at a different grocery store entirely.
  • I have always believed that laundry is best done naked so one can wash all of one’s clothing. When following this strategy at a guest house in a foreign city, one should recognize beforehand that one will be locked in one’s room for the duration. And may God have pity on you if the laundry machine breaks. 

Will You Take Twenty Dollars?

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The goal of the game is to play. You play by paying the entrance fee. Everyone’s invited. 

Outside the original ruin bar in Budapest, the bouncer quoted me the price to skip the line: “Ten euros.” 

“Ten euros for two?” I offered. 

“Ten euros each,” he said. 

“Will you take twenty dollars for two?” 

“Of course,” he replied, in a voice so light and generous it could only belong to commerce. ($20 is about 15% less than 20€.)

He wasn’t being sloppy. He was filtering. Part of his job is revenue generation. The other part is selecting patrons who will spend more money inside. The 15% discount doesn’t matter; if we’re willing to play his game, he’s already won. 

My favorite cities have always been the commercial ones. Vegas when I was young, then recently New York and Amsterdam. They run on a meritocracy of cash, with a cosmopolitan, equalizing energy. Nobody cares who you are or where you came from: Your money is good here. 

Everyone in these cities is trying to screw you, at least a little, and often not subtly. New York: There’s a man in an official-looking vest selling tickets to the Staten Island Ferry, which is free. Vegas casinos install ugly carpets and no clocks so you keep your eyes on the slot machines and forget what time it is. The Dutch more or less invented economic colonialism. None of these are ethical, but there is a particular brand of honesty to them. There’s an honesty in a structure being explicitly hyper-optimized for a purpose. A traveler going to Las Vegas may affectionately refer to it as “Lost Wages”, and go anyway! 

Social games (status, position, politics) extract, too. They just don’t tell you the price. I’ll take the bouncer with a clear sense of haggle over a gatekeeper with an opaque shibboleth any day. He’s named his price. I haggled at it. He accepted. 

Commerce can be a brutal game. But it’s also fair, kind, and possible. I remember talking with a homeless New Yorker two blocks from Central Park in 2021. Israeli-born, formerly US military, he told me he loved homelessness in New York: the crowds, the parks, the safety, the free food everywhere. New York is a wonderful place to have nothing.  

So was Las Vegas: it was the first place I went when I moved into a van. You don’t need to gamble; you can people-watch, eat a meatball the size of your head for $10, or palm a $1 cocktail shrimp meant to lure you toward a table you’ll never sit at. Abundance runs downhill to those willing to travel for it. But you must be willing to travel. And you must accept that one day it will dry up. 

This new generation doesn’t gamble. Vegas, needing new revenue sources, raised its food prices. After my prior trip to Sin City disappointed, the last time I had the opportunity for a layover in Vegas, I went to Reno a day early instead. 

The bouncer’s “of course” was more than a discount. It felt like the loose money of my early twenties, the ZIRP years in the Bay Area, when a kid fresh out of college could get hired to write at $50 an hour because nobody was counting that closely yet. It felt like being let in.

Your money is good here. So is mine. The door is open if you’re willing to play.  

And perhaps the most beautiful part: Whenever some entity – a country or company or culture – makes rules excluding some people from playing, they’ll rapidly lose the commerce game that made them dominant in the first place. It’s self-correcting, a thing of beauty. 

Of course.

Two Service Industries

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The waiter has two jobs. So does everyone in the service industry.

A waiter who doesn’t bring your food has failed. A waiter who brings your food but ruins your experience has also failed, just in a different way. We refer to both of these elements with the same word: “service”.

Two completely different failure modes, one job title. The waiter sells a result (correct order arrives, hot) and an experience (the welcome, the rhythm of the table, the small talk, the upsells that don’t feel pushy).

Most service jobs are like this. A masseuse sometimes sells a result (your glutes stop screaming) and sometimes sells an experience (60 minutes of affectionate touch from a fellow primate). A hotel sells a result (somewhere safe to sleep, proximity to the places you want to be, a gym, food without leaving the building) and an experience (the pleasantness of all of it).

The word “service” hides two different products. Once you notice this, every purchase decision gets easier, because you stop accidentally paying for the one you don’t want.

(People miscategorize their purchases all the time. Doctors, for instance, are in the service industry. Personally, I only value “bedside manner” insofar as it impacts my medical results, generally through team cohesion.) 

The Hotel Switch

This idea showed up today while I switched hotels in Budapest.

Hotel 1 was the Kimpton BEM. $340 per night. Sauna, gym, restaurant, bar, room service, a quick walk to the Danube. A small room. No refrigerator. Paid laundry. Beautiful experience, modest result.

Hotel 2 is an aparthotel. $61 per night. A one-bedroom apartment (separate bedroom and living room). A kitchen with stove, oven, microwave, dishes, refrigerator. A laundry machine. One block from the biggest ruin bar in Budapest.

For the same money, I’d take the aparthotel every time: twice the space, a real kitchen, a better location, an in-unit laundry machine. The Kimpton costs roughly 5.5x as much. At that price, you’re buying 1) The experience of being attended to, and 2) Reliability (of room, food, and experience: Kimpton is a reputable brand.

The Preference

I’m probably odd in that I almost always want the result.

I prefer my infrastructure solves specific needs. If it solves the need, the work is done; the pleasure of the experience is secondary to the solving of the problem.

The key exception: play. I don’t play golf to get the ball in the hole. I play golf to play golf. Play is the rare context where the experience IS the product, and I’m clear on that going in.

Perhaps some people see visiting a hotel as play. I see it as infrastructure. 

The Cost

The aparthotel model isn’t free. You have to learn it. Photos lie. Hosts ghost. There’s no front desk at this residence: if you fail their check-in process, their automated system won’t email you the login code.

The variance is real: I once caught a nasty cough from a booking.com stay due to mold on the walls.

The result-first approach trades reliability for upside on the days nothing goes wrong. Most days, nothing goes wrong. And my skill at spotting good residences has improved. But I improved… by making mistakes.

The Result

As I write this I’m on the couch in our new living room, and Partner is squishing my feet. My feet hurt because the Kimpton was a 45-minute walk from the lively downtown area (from which Partner and I walked back to the Kimpton at 2am last night).

I’m enjoying the experience of a feet-squish from someone I love. Still, I’d rather we jumped to the result where my feet stopped hurting.

Budapest: Scams and Porn

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How porn, scams, and power fantasies feed each other

[Day 2 in Budapest. Written from a downtown bar.] 

In Budapest, there’s a classic tourist scam. The kind of scam that’s so common you learn about it from Rick Steves. A beautiful woman approaches you on the street, flirts, suggests a drink at a bar she knows. You go. The menu has no prices. You order a round. The bill comes: $500 for two glasses of champagne. A very large man near the door makes clear: this is not negotiable.

The scam works because the mark doesn’t expect it. He thinks he’s lucky. 

And the reason he thinks he’s lucky traces back through Soviet history.  

Here’s the loop, roughly:

1. Post-communist economic disparity creates a visible gap between local women and Western tourists with money.

2. Sex tourism follows: Guys pay for sex.

3. Some of them film it. A whole genre emerges — the “meet a girl on the street in Eastern Europe” category. The premise: “this just happens! You walk around Prague or Budapest, and beautiful woman will come home with you.”[1] 

4. Enough men absorb this trope from porn as a realistic model of how Eastern Europe works. They arrive pre-loaded with the belief that beautiful women approach foreign men on the street.

5. Scam operators notice this. They don’t even need to be aware of the porn. They just notice this story works. A woman approaches, flirts, leads the guy to the scam bar. He doesn’t question it because it matches the script he’s already running.

The porn normalized the scenario. The scam monetized the same scenario from another direction.

I like comedy, so let’s look at this from a recursive, self-parody perspective: 

Once enough guys get scammed and tell the story online (forums, Reddit, travel warnings, the Rick Steves travel guide) the scam itself becomes a known thing. It enters the cultural awareness. And what does entertainment do with any known phenomenon?

It digests it back into fantasy.

My predicted next genre: porn where the guy gets taken to the clip joint, sees what’s happening, fights the bouncer, and the girl is so impressed she actually sleeps with him. The humiliation gets rewritten as a test. The mark becomes the hero. The audience gets to engage with the anxiety of being scammed abroad, but instead of worry it gets transmuted into a power fantasy.

Reality creates the fantasy. The fantasy creates the vulnerability. The vulnerability creates the scam. The scam gets folded back into the fantasy. Someday maybe people will want to be scammed by the beautiful woman as they’ve gotten off on it so many times. 

This structure isn’t unique to Budapest. Casting couch porn followed the same loop. The real casting couch was an open Hollywood secret (producers leveraging access for sex). Exploitative, coercive, career-ending for the women who refused. Then the genre emerged: the “audition” scenario, repackaged as the fantasy itself. The power imbalance turned from a social bug into the pornographic product.

The pattern repeats because it works. A real dynamic involving real exploitation gets turned into content, and fed back to an audience that is now one step further from seeing the thing clearly. Nobody plans the full loop. Each actor in the chain is just optimizing locally — the pornographer for clicks, the scammer for cash, the next pornographer for a fresher scenario. The loop runs itself.

The economic loop feels no different from the gentrification loop seen in Brooklyn, Berlin, and Budapest: down-trodden area → cheap real estate for bars or clubs → yuppies who want to be near artists → cafes → expensive real estate 

It’s an economic loop. You’re living inside thousands every day. Try not to get fucked by them. [1] Budapest actually produces a lot of porn, and this “meet a strange woman and bring her home” is a common genre, featuring the beautiful city architecture

On Skillful Calibration (and Safely Pokin’ Gators!)

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To improve, calibrate. To calibrate, employ expected value calculations (which is more fun than it sounds).

Two years ago, a friend passed on the opportunity to invest in Anthropic. He now regrets passing.

This friend prioritizes calibration. Yesterday I learned why he generally avoids risks. When viewing a risk, he considers only the magnitude, failing to also include the risk’s probability.

Expected value is one of game theory’s most powerful calculations: 

  • Probability × Magnitude = Expected Value. 

My friend is not unique: people often drop one of the two terms. Include both in your simple math; your outcomes will be better calibrated. (And it only takes a second!)

Magnitude-Only: Frozen From Fear

Considering only the downside magnitude over-biases against action. This heuristic will keep you alive but not enable you to thrive.

This example occurs whenever somebody says, “But what if it fails?” as a conversation ender. Slap a probability on that bad boy and you’ve got an EV.

Probability-Only: Missing the Magnitude

A friend once described why they don’t vote: “the likelihood I’ll have an impact is near-zero.” Ah, but tomes have been written about the enormous magnitude.

When someone says, “It probably won’t happen,” or “it’s a drop in a bucket,” check they’re also considering the size of the bucket. If the impact is large enough, the low likelihood that your single drop makes it overflow may be enough.

EV → More Fun

During my all-time favorite date, Partner and I hooted & hollered at an alligator.

Twenty minutes earlier, we strolled down a path through a Louisiana swamp. Partner meandered toward some tall grass. I said, “I wouldn’t do that.” Partner was surprised because her self-preservation instinct usually eclipses mine. I mentioned alligators, and said: in this circumstance, the magnitude is very bad (being eaten by a gator) and the probability much higher than usual (Louisiana swamps contain alligators, and Pokémon has taught me to beware tall grass).

Compare that moment to later: on a bridge 10 feet above an alligator. The magnitude is still very bad, but the likelihood de minimis. (Teehee, alligators can’t jump 10 feet!) 

Since we knew ourselves to be safe, we could poke the gator with our metaphorical stick.

When something seems scary, investigate the probability. E.g. “I can’t miss work to see my child’s school play: I could lose my job.” 

This concern is well-founded, but misses two elements: the likelihood of losing your job (probability) and the fact that you can influence that likelihood via other actions (malleable probability). (I’ll write more on malleable probability another time, especially as it relates to luck.)

Expanding your Vocabulary

Expected Value is a core step, but it is only the first step.

Error bars can make this topic tougher. The question “How likely is extra-terrestrial life to exist in our universe?” prompts wildly different outcomes whether you include the error bars.

So even if you do the EV calculation, you’ll still be wrong sometimes, you’ll still lose sometimes, and there’s still more calculation to do. (For a fun example, see Pascal’s Mugging.)

Working to Win the Lottery

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Sometimes, the safe play is the lottery.

“I’d rather be working for a paycheck than waiting to win the lottery.”

—Bright Eyes, “First Day of My Life,” I’m Wide Awake, It’s Morning

There’s a difference between waiting to win the lottery and working to win the lottery.

Waiting doesn’t make sense: the lottery is a losing proposition. But working to win the lottery? If you can skew the odds in your favor, you can win.

Upon graduating from college, I reasoned: “I could get a job at a Big Tech Company that pays $60k/year, this year, or next year, or in ten years.” So I started my own business doing what I wanted to be doing.

I know of two strategies: working for a paycheck, and working to win the lottery. (By “lottery” I mean asymmetric upside, where one hit pays for many misses.) Most people, Partner included, are wired for the paycheck. I’m wired for the lottery. Both can win.

Most people think of the lottery as riskier. I disagree.

Here’s the move that separates my thinking from everyone else’s: the safer path is concentrated. You work for a company; that company goes under, you’re screwed. You find a similar company. But what happens when the whole industry goes under? The skills you’ve built might be useless worldwide.

The skills I’ve built? Not so much — because I’ve had the ability to choose what skills I build. The employee path is actually a concentrated bet on the need for similar skillsets. My portfolio is which skills to build. That, for me, is diversification.

The risk actually shows up at the intersection between the operator and the game. For me, this isn’t risky. I have savings discipline, deal flow, and a fitting temperament. For someone without those, it would be. We think of risk as the variance in an activity. On the meta-level, it’s more about being fit for the game and playing enough times to outlast the variance.

Two Paycheck Jobs

In my life, I have worked two standard, 9-5, knowledge-work paycheck jobs.

The first: I interned at a marketing agency in NYC the summer after my sophomore year of college. I automated all of my work, then all of the other interns’ work, then my direct superior’s work. When I asked my superior for more work, he said, “Sit tight and read.” So I played games on my computer, peaking at 120th in the world at a card game I liked.

The second was at a fintech. $175k cash per year. Predictable.

My first month working there, my monthly burn was 3x what it was the month before. I had been earning $100–150k with my own business.

It wasn’t the money. It was the perceived predictability.

The three most addictive things in the world are:

  1. Methamphetamine
  2. Nicotine
  3. A steady paycheck

What can I say: I wanted to try the drug. I just got my fix and got out.

The Math

I keep my costs low. I don’t get much more value from the $50 Chinese restaurant over the $5 basement dumplings. Most of life’s joy comes from experiences and removing friction. I therefore spend money on travel and life infrastructure.

I lived in a van while building my first business.

The math: ten months of San Francisco rent = one van. After ten months of rent, you have nothing. After ten months of van, you have a van. (Also nice that I bought it for $12,500 and sold it 3 years later for $19,500. Taught me a lot about macroeconomic waves, too: the van market went crazy during COVID.)

While living in the van, I squirreled money into early-stage tech companies.

Natural aptitude matters. If none of my bets had paid off, I would have switched plans. But four $25k bets is only $100k. Which, if you’re making $150k per year and spending $30k, is only 1 year of work to find out whether you have a skill (in my case, the skill is betting on people).

Bet on People Who Will Win

I once asked Ann Miura-Ko (a Midas List member and board member of Lyft) whether there was more to investing than finding competent and trustworthy CEOs. I had a hunch that was the whole game. She agreed: yes. But she added that doing it well is not trivial.

Fun for her to confirm my approach.

So that’s been my approach. I haven’t bet on technology or the future. I’ve bet on individual people.

My company was a ghostwriting business. I spent a lot of time living in experts’ heads. Bylines included:

  • Justin Kan (founder of Twitch)
  • Sam Altman (then of Y-Combinator)
  • Ellen Pao (CEO of Reddit)

During this investing, I also dabbled with crypto. I took the advice of friends, but those friends didn’t have control over the asset. They were speculators. With a private company, I’m betting on actual leadership. Leadership controls the outcome. They’re responsible for everything.

The lesson: bet on people who control the outcome. Or bet on no-one (the index). Don’t bet on people without control.

In a gambling sense: I’ve placed four bets on startups, where variance is high and likelihood is low:

  • 1 failed
  • 1 is planned to IPO this year
  • 1 is going gangbusters
  • 1 (the one that prompted this musing) just received a term sheet at 2.5x what I bought in

When Partner learned that my ~$15k investment was now worth ~$37.5k, she told me: “You’re like an odd sort of couch.” Apparently, most people find coins in the couch cushions, not tech company stock that they haven’t thought about in months.

It’s the same way I play poker: I find a spot where I have an edge, and I hammer it over and over and over again. Eventually, if I bet the same amount into ten different companies, and a successful company will more than 10x my money, I need to be right more than 1/10 times. (And, of course, not run out of money.)

Most people either don’t have the resolve or aren’t right more than 1/10 times.

Different Risk Profiles

Graduating university, Partner was saving 75% of her paycheck. She didn’t know many people didn’t save at all, and most financial experts only recommend around 15%. She thought what she was doing seemed logical.

We are FIRE sort of people, just with different risk profiles. Partner enjoys working for a paycheck. I work to win the lottery.

These mutually-balanced approaches are part of what makes us a good team. When we need to invent something out of nothing, I’m usually team captain. When a problem needs debugging, she’s in command.

After reading a draft of this article, Partner had this to say: 

“I think this last part might warrant slightly more space. You’re hedged in a way most people don’t get to be. 

It’s one thing to take big bets when you’re young and have no responsibilities. It’s that people tend to get addicted to the paycheck when they set their lives up in ways where they feel the need to have stability. They may miss out on being able to use those skills in big-bet ways as they don’t want to risk a loss. It’s also hard to have the mental space and discipline to self-hedge.

I’m your hedge so you can chase the upside.” 

One day, my ship will come in. And if not, we’re still happy.

Return of the Sandwich Shop

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The goal of the game is to make money. You make money by selling sandwiches for more than they cost. 

(Part 2 of the sandwich series. Part 1 is here.)

The previous customer had ordered and left without entering his phone number for loyalty rewards. So I entered mine.

Today’s cashier had panache. Flair. Real excitement about which side was heads and which was tails. When I asked if they were still doing the 50%-off coin flip, he said “of course!” like his job was attitude, not mere cash-register-button-pushing.

The cashier showed us the coin: this side is heads, this side is tails. Partner called it: “sandwich logo.” 

It landed sandwich side down.

She lost.

The cashier rang up 50% off anyway.

I hadn’t considered this until today: when I win the flip, I get 50% off 100% of the time. When I lose, I get… 50% off some percent of the time? The expected value just got better.

Since a sandwich is bread, meat, and veggies, the shop probably still exceeds its cost of goods even at half off. So they’re not exactly losing on the flip. But they could have netted more revenue by simply charging me the appropriate amount. 

In any case, the promotion is working: they pay a small acquisition cost to attract me back. Which they have. I’m here, eating my second sandwich in three days, and they also have my phone number. 

They played me. I played them. And the dinky coin flip is what made it work.

Partner says my odds will increase even further if I’m cuter. I think she says this so I keep bringing her places.

Well played.