Saturday, 13 May 2017

The missing link in personal development

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The importance of having good systems becomes particularly clear in times of turmoil. When problems become acute, you need systems that get things done, systems that enable you to move forward, irrespective of the size of the obstacles. 

When we talk about having good systems, we should not forget about philosophical systems, since those are indispensable for making correct choices in the face of complexity and uncertainty. 

Personal development, if taken seriously, is driven by patterns, not by isolated events. You need effective habits, principles, and structures in order to keep growing as a person year after year. The fact that many people lack a solid philosophy explains why they collapse psychologically when they face a major challenge. Relatively few individuals manage to keep their mental balance when they are accosted by illness, financial hardship, and family quarrels.

A rational philosophy is essential for living effectively in good and bad times. Without such a philosophy, it is impossible to keep a cool head when thing get hot. Cost consciousness is an essential part of such philosophy, and sets apart practical, well-grounded individuals from hopeless, unrealistic dreamers.

Yet, cost consciousness is so rare in personal development that I have come to call it "the missing link." Encouraging people to take action “to develop themselves” without having regard for costs can easily lead to disaster. Let me give you five examples that show how to enhance your cost consciousness, and accelerate your personal development:

If you want to guide your life by a rational philosophy, you should take into account the opportunity costs every time you make a major decision. Already in the nineteenth century, Frederic Bastiat (1801-1850 ) observed that, unless we make the effort to assess alternative scenarios, we can be easily fooled by our tendency to think short term. It takes effort "to see the invisible," explained Bastiat. It takes a rational philosophy to open our eyes, and see the hidden costs of our choices.

When you decide to go in one direction, you should also assess the hidden cost of your not going in other directions, or for that matter, the cost of staying put and doing nothing. For example, the direct cost of playing video-games five hours a week is negligible, but the long-term opportunity cost of wasting five hours a week is huge. Think of what you could do in the long term if you employ those five hours productively each week: You could learn a second language, start your own business, or become an accomplished public speaker. 

Another critical but often overlooked aspect of personal development is making fair comparisons between present and future costs. Individuals will often refrain from taking action because they grow discouraged by assuming (wrongly) that they cannot reduce their costs. People will regard obstacles as insurmountable because they assume (wrongly) that they cannot find an inexpensive way to circumvent those obstacles.

Entrepreneurship, understood in a wide sense, is essential to your personal development. The ability to understand and identify future cost variations can give you a large advantage when making major decisions. Already three centuries ago, Richard Cantillon (1697-1734) regarded this ability as a key element in economic success.

For instance, individuals will sometimes fail to pursue promising opportunities because they overestimate the costs (tangible and intangible) of moving to another city or country. In fact, those costs tend to rise only during the initial six months, which is the length of time it takes to find your way around in a new environment. Later on, those costs can be typically compressed.

The subjective elements in the perception of cost should also not be overlooked. Many outstanding initiatives have been abandoned when the originators made the mistake of asking other people for their opinion. "It is too expensive," they got to hear. "It is too risky. It will take too long, and you are already too old for that."

The problem is that, even if those remarks are made with good intentions, they are bound to remain subjective. Even when critics argue that their remarks are based on hard data, those remarks will still be tainted with subjectivism.

Already in the Middle-Ages, Bernardino of Siena (1380-1444) realized that prices are naturally set by comparing the intensity of subjective desires. Exactly the same principle applies when it comes to assessing the cost of personal development projects.

A learning process that should "objectively" take years can often be compressed into months thanks to the extraordinary motivation of the individuals involved. Similarly, senior men and women who should "objectively" possess limited energies can display enormous levels of dedication when they are reinvigorated by a strong sense of purpose.

The apparent "certainty" of cost can also be misleading. The truth is that, when you are making major decisions such as getting married or changing the course of your career, you will never be able to forecast the cost with certainty. As Jean-Baptiste Say (1767-1832) put it so wisely, cost optimisation is “a process of constant trial and error." 

If the cost of pursuing your dreams appears too high, this should be a call for caution, not a call for defeat. Personal development projects are challenging precisely because their long-term cost is bound to remain uncertain. Yet, such uncertainty should not prevent you from applying your creativity to reducing those costs as much as possible through “a process of constant trial and error."

When it comes to personal development, millions of men and women will routinely underestimate their capabilities and fail to seize their chances because they compare themselves with people in different circumstances, and wrongly assume that they cannot afford to compete.

Such conclusion can often be proven false. Already in the eighteenth century, Adam Smith (1723-1790) observed that products and services tend to gain value when they are complementary to others, a phenomenon that Smith called "competitive advantage."

If you want to develop yourself in a certain area, you should not be discouraged by the fact that other people are already firmly established in that area. In those cases, a good strategy is to use your particular circumstances to develop skills that are complementary to those already existing on the market.

For instance, if you want to establish yourself as a public speaker, you don't need to imitate the skills and cost structures of people who are already well-established in that profession. Chances are that you can attain success faster and at a lower cost if you identify and exploit your competitive advantages, whatever those may be. 

Cost consciousness (and the associated actions to manage costs effectively) are the missing links in personal development. A rational cost assessment is a crucial factor that you need to take into account every time you make a major decision in your professional or private life. 

For the attainment of long-term  happiness, I regard cost consciousness as no less important than knowing yourself, understanding your environment, and sustaining your long-term motivation.

Twenty-six centuries ago, Confucius was asked if human beings can gain knowledge about life after death. Confucius dismissed the question by saying that "before worrying about life after death, we should first try to gain knowledge about life before death." By becoming cost conscious here and now, you can deepen your knowledge, make sound decisions, and build a better life for yourself.


Image: photograph of classical painting; photograph taken by John Vespasian, 2016.

For more information about rational living, I refer you to my books

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 Here are the links to four media interviews, just published: