Saturday, January 18, 2014

Systems vs Goals - Lessons from Scott Adams.

Scott Adams' How to Fail at almost everything and Still Win Big is a book which puts him ahead as a self-help author. His book is chock-full of good, realistic and down to earth advice which is relevant for American and International audiences.

I'm only going to discuss one important lesson from the creator of Dilbert.

Systems trump Goals.

This is a very unique and interesting idea.

Scott proposes that goals are not as good as systems. Goals are a one-shot objective. The guys who take my $300,000 oath will position their goals as follows - Save $300,000 or never get married. The limitation of such goals is that while the goal is not achieved, you are considered a failure ( and you remain celibate, tough luck). After a goal is achieved, you experience a moment of triumph but the goal ceases to exist, and you lose a source of motivation..

Systems are superior to goals. A system is action-based and not outcome-based, although actions are keyed to meet certain outcomes. A system succeeds the moment you execute on it and rewards you with a high when you execute it properly regardless of outcome.

Guys who want to take my $300,000 oath should create a system which works for them such as :

a) Limit expenses to $300 a week.
b) Save 80% of earned income to a portfolio of REITs and stocks which yield at least 8% with sustainable free cash flow.
c) Farm the entire bonus into the stock market.
d) Farm all increments into the stock market.
e) Ignore market sentiment and keep searching for counters which meet this criteria. ( They are quite hard to find )
f) Date casually and look for a life partner in a school or place of personal development. Ask at least 2 girls out for a date in these environment.
g) Eschew single bars, salsa classes, hipster cafes or areas of frivolous pursuits as these places may not yield the proper life partner.

Once a system is created, every cycle ensures that you will get closer to your final objective. You succeed every month when you can farm 80% into the stock market. You also give yourself a pat on the back whenever you meet someone in a writing/ accounting/ finance/ language class. While the system may not get you to $300,000, if you can sustain this over a few years, it will improve your net worth substantially.

You may even like this system so much, you can carry on with it even after meeting your target. ( But you should'nt carry on dating different women after marriage, not good for your health. )

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