Everyday Systems: Podcast : Episode 95

Allocation Mind

My teenage daughter once asked me, “Dad, how can the stock market go up forever?”

My first instinct was to imagine some space capitalist expansion to Mars and the Moon and other dead, dusty rocks, but then I had to admit, “It can’t. It’s basically just a big Ponzi scheme.”

This isn’t to say that one day, maybe, we will get to other worlds and maybe even terraform them into something perhaps approximately as habitable as an earth nicely cooked by climate change or nuclear war. Though it’s a little hard to imagine us, even at our incompetent, malevolent worst, being able to do anything to Earth that would make it less appealing a place to live than Mars is now, or that any terraforming could happen on a shareholder-acceptable timetable. How many million dollars a minute do you think it took to keep Matt Damon alive in The Martian–in feces-grown potatoes, ketchup, and oxygen?

So yes. The stock market has gone up an average of about 7 percent a year post-inflation since approximately forever in the United States. A very wobbly 7 percent, but on average, and you would have been wise to buy and hold through thick and thin. If you’d started investing in 1896, when the Dow was first calculated, you’d be a very rich, say, 140-year-old today. But investors in other places, say, Tsarist Russia, were not so fortunate. I have a stamp from my parents growing up in the 30s in Germany with a face value of 250 thousand marks. And we Americans may not always be so fortunate either. Eventually, “this time” really is different. “Oil is found in the minds of men” – until it isn’t. Bacteria in a Petri dish grow exponentially – until the sugar runs out.

Growth. Financial growth, personal growth, the growth mindset.

I don’t want to knock it – there’s something to it, in all these spheres. But there’s also a problem with it, in all these spheres. Finitude. Real limits. Eventually you hit them. Maybe not today, maybe not tomorrow, but eventually.

I’m sure you’ve heard of “the growth mindset.” The idea is that instead of focusing on capabilities and limitations, you focus on acquiring capabilities and getting past limitations. You don’t worry about how smart or talented you are. You assume you can make yourself smarter and more capable with dedicated hard work, attention, and curiosity. There is some hard science behind this. You’ve probably heard of “neuroplasticity,” the idea that your brain can physically change with experience, become smarter, more capable. You’re not stuck with the same old brain you always had. At the most fundamental level, you can change and grow. This is real and important and inspiring. But neuroplasticity too is not infinite. At some point the growth mindset can veer into bullshitting yourself. Then you not only stop believing in yourself, you stop believing yourself, period.

It made me wonder if maybe another financial concept could come to the rescue for us, both financially and in terms of personal development: asset allocation. Not to replace growth completely in either case, but to complement it.

They say that over the long haul, asset allocation, how you distribute your financial assets, what proportion you stick in classes of investments like stocks and bonds and money markets and real estate and what-not, is more important than the particular equities or funds or whatever that you invest in. How you divide up what you have into categories. Like x percent in domestic stocks, and y percent in bonds, and z percent in international. That that dividing up should be your focus rather than chasing a hot stock or market swing if you want long term financial success.

Asset allocation isn’t the opposite of growth. It works a hell of a lot better if there is growth. But mood-wise, it’s very different. Your focus is on what is available, how to spread that around.

A related concept is this image of economic resources as a pie. Capitalists emphasize expanding the pie. Socialists emphasize how to slice the pie. Again, growth vs. allocation. Usually the capitalists come out ahead with the pie analogy, and we start to drool at how big and delicious this imaginary pie is going to be. We imagine we’ll be full even with a relatively small slice of such enormous pie, that we won’t be disgusted and resentful at the asshole next to us taking a hundred times as much. But here is where the pie analogy breaks down. Because our dessert stomach can only accommodate so much actual pie. But our desserts stomach, our appetite for what the slices symbolize, the respect and status that is due to us, that appetite is limitless – at least until we feel we’re getting as much as anyone else.

Don’t freak out: politically and economically, I am neither a market fundamentalist nor an acolyte of my great-uncle Friedrich. So if your political orthodoxy alarms are going off either way you can hit the snooze button. I think both growth and redistribution are important. But I think in terms of personal development, these days at least, growth tends to get more attention than allocation, and that imbalance can be a problem, and that is what I want to talk about today.

I call this corrective stance Allocation Mind. Not mindset, like growth mindset, but mind, like Beginner's Mind and Don’t Know Mind and other Zen approaches. Mindset sounds, well, set. Rigorous. Effortful. “Mind” is more about letting go, letting be, accepting and noticing, the opposite of rigor and effort.

We all know the naive, negative opposite of the growth mindset: fatalistic hopelessness. “I’m not good enough. I give up.” Or agonizing constantly, “Am I good enough? Do I have what it takes? Am I special and talented and worthy? If I am, I can do anything, I can live forever, I can fly. But if I’m not… [dot dot dot]”

That’s obviously not what I’m advocating. That is a mindset. And in a bad way.

What I’m advocating is thinking: I really don’t know how good I am, and at the end of the day, it doesn’t matter, because it’s not in my control. So I can stop obsessing over it. It’s not my business to judge, either to boast or beat my breast about the gifts I do or do not have. My business is to make the best of whatever it is I do have and am, to accept my limits and make the best of them. I only have so much time, talent, energy–how do I allocate them?

There are an infinite number of things I could and possibly even should be doing. But there are only so many hours in a day and my capacities are limited. So what first? What can I squeeze in? Even more important, how do I come to terms with the fact that I can’t squeeze it all in, or even a small fraction of what I would like to?

It’s not easy. Especially the latter part, about coming to terms with our limitations. So I like to focus specifically on the first while keeping the latter nice and vague. It’s too depressing to focus on culling the herd of my hopes and dreams: a dim recognition that they’re not all going to make it is enough. You’re on the Titanic and there aren’t enough lifeboats. Get the most important stuff on board, and then, well, there just isn’t any more room. I guess that’s a kind of depressing image too, but the point is, explicitly prioritize and implicitly accept.

Allocation Mind is Adlerian self-acceptance vs. bullshitty self-affirmation. Real self-confidence instead of a self-confidence trick.

“It’s not that deep” as my other daughter likes to say. But it is easy to forget. So I remind myself frequently and in a lot of different ways. And I’m surprised, now that I’m paying attention to it, at how many ways it’s helpful throughout the day, and across my habits.

In terms of reminders, I use the term “Allocation Mind” in the current iteration of my recorded mantra, that self pep talk audio file that I listen to daily that I described in my episode on Mantrafication. I also write “alloc mind” on the upper right hand corner of my daily personal punch cards. That’s the part of the card where I write some catchphrase to remind me of something —a soul challenge– I’m working on. It’s been “Alloc mind” for almost a year now uninterruptedly – hard to top that, given who and where I am.

Games have helped me build my Allocation Mind. In a game you have to make the best of the hand you’re dealt. You don’t have a temper tantrum because you got shitty cards. You think, what can I do with this? Can I maybe even turn it around? Is there some angle that can make these shitty cards actually amazing? Or can I at least lose with a good grace and fighting spirit?

God grant me the serenity to accept the shitty cards I was dealt, the courage to win if I can, and the wisdom to find the fun in doing either.

Those are actual games. In my gamified life, in my CBT for anxiety game, Spider Hunter, I give myself “spider points” both for noticing when I am not practicing Allocation Mind well (and suffering from it), and bonus points for when I notice that I am practicing it well.

For example, when I am freaking out because of an unexpected interruption to work, or I get some new assignment dropped on me, that is going to keep me from getting something else done on time, Allocation Mind says: That happens. That’s life. Adjust your plan. You have even fewer hours than you thought. Accept it. Adjust. Did you feel pain? Frustration? Rage? Great. Notice it. That’s worth a spider point. Can you now adjust your expectations and move on? Also great. Bonus point. And maybe your pain, frustration and rage will subside a bit in the process.

Oversleeping is another canonical example, which fortunately doesn’t affect me much because I bolt up in eldritch terror whenever I hear my alarm clock ring (possibly not the most psychologically healthy response, but it has its practical advantages). On those rare occasions when I do oversleep, immediately, before I can catch myself, I feel pain, frustration, and rage because I know I now really can’t do all the already impossibly long list of things I had planned to do. But because of Spider Hunter, I notice, pretty quickly, what is going on, and the rage subsides a bit. I get a spider point – an absurd but real consolation. I then get greedy for my bonus point and calm down quickly so I can earn that as well as I adjust and reallocate my remaining, more limited resources to face the day's challenges as best as I can.

When I was younger, I used to imagine that wise people didn’t feel pain, frustration and rage about stupid things like oversleeping (did they even oversleep?). And then I’d feel even worse when I did feel such things, because on top of it all, here was proof of my foolishness. It has slowly dawned on me that wisdom, at least such wisdom as is available to me, is not about not feeling unpleasant and embarrassing emotions, but almost the opposite: it’s about noticing that I am feeling them, accepting them, maybe with a laugh, and letting them go.

With exercise, with Shovelglove and running, Allocation Mind challenges come up too. They happen when I injure myself, as I have come to accept is inevitable with any sort of exercise and advancing age. It used to make me berserk. I’d feel so frustrated having to go back down to a shorter distance, or a lighter sledgehammer, or fewer days a week. I’ve come accept it, concretely, systematically, to even relish the challenge of dealing with it. As I described a few months ago, I assuage my outraged ambition with a system I call Zeno’s Paradox Exercise Progress Plan. Which is, basically, once I’ve had to pull back, to allow myself only extremely slow progress back towards where I was, almost infinitely slow progress, in smaller and smaller increments as I approach the goal. I try hard to discern my hopefully slightly increasing capacities as I heal, my expanding but very real limits, and am very careful not to outpace them. Instead of raging against my injury and limitations, my ambition is to work within them as best as I can.

A digital calendar can be a very helpful tool for Allocation Mind. But you have to use it right. You have to expect that life will “punch you in the face,” in the words of the great Mike Tyson, and that surprises will come up and you will have to shift things around. On work days, on N days, I stick everything I do in my Microsoft Outlook calendar, everything, even procrastination, online shopping and checking the news. I use several color-coded “event groups” so I can try to keep non-work stuff from eating up too much of my work day and vice versa.

Outlook calls these event groups “calendars,” which I find confusing, because the visual scaffolding on which I am imposing these events is also called a calendar. So I’m calling them “event groups” here because I can’t even understand what I’m saying if I call both of these things calendars. Except for my main event group, none of the others are blocking, or even visible to anyone else, so people can still schedule meetings with me. They don’t affect my “busy” time.

I know I will have to shift things around during the course of the day as surprises punch me in the face and I realize I’ve incorrectly estimated how long some of my tasks will take, but it’s a good sanity check of my ambitions against reality. It’s like a to-do list with crude time estimates stacked up against my actually available time. By default, every task takes half an hour. I can make them longer but it’s a good starting point and sanity check – if a task is longer it should probably be broken up into subtasks. I don’t size any task less than half an hour because the labels would be illegible. Instead, if they are super quick, if they’ll just take a few minutes, I’ll just drag them next to each other, so they appear simultaneous in the same half hour time slot. The labels can get truncated, but that’s easier on the eyes than if they get vertically squooshed, and I do need some kind of visual disincentive against loading in too many tasks in a given time slot. My first work task every day is to take a first pass at getting the day's tasks blocked out. That is itself a task, a recurring weekdaily task, in my calendar. When during the course of the day, I have to move things around, and reality winds up being different than what I projected, as it always does, I sync the calendar up with reality, so as the day progresses it incrementally transforms from being a plan for the future into a sort of diary of time-spent in the past.

This calendar-based method of task management is redundant, given that I also stick my tasks on my daily personal punch cards, but for me, it’s good redundancy, it’s the second engine on my jet plane. And the limits of both of these methods, the limited space on the index card, the limited time in the calendar, is the key to why they are effective. Humility is the key to productivity. And the limits of the card and the calendar teach me that every day – twice. It’s a lesson I seem to never cease needing to relearn.

Even the No S Diet you can think of as coming from an “Allocation Mind” approach. We’re not directly trying to reduce calories, to achieve negative growth, a shrinkage mindset, I guess. We’re just allocating when and where these calories come from: from discrete meals instead of snacks. The calories will shrink, we hope, but that is not the direct goal. It’s a side benefit. The direct focus is allocation: get them from meals instead of snacks. And the mood shift of that new focus will have benefits way beyond even just the calories.

It took me a while to come up with the term, “Allocation Mind,” but as you can see, its spirit turns out to pervade a lot of the Everyday Systems. Having a term is a real advance, though. Because now I can explicitly remind myself of it. “Mindful Bagful” is a similar reminder-term I podcasted about a while back, for catching myself freaking out in the very specific circumstance of shopping. I still like “Mindful Bagful,” and use it, though I’m happy to say I find myself a lot less stressed shopping these days than when I recorded that episode. And “Allocation Mind” feels more generally applicable.

My daughter with the Ponzi scheme question is now a junior in college and, believe it or not, an economics major. We’re semi-seriously concocting a political platform together called Flubiism: flat tax plus universal basic income. It takes a darling idea of the right and combines it with a darling idea of the left, ideally to bring both sides on board, but probably just to piss everybody off. But that’s beyond the scope of this episode (or probably any episode).

So that’s all for now. Thanks for listening. I hope you found something here useful.

By Reinhard Engels