3 Things 8-2

08/02/2021 Although MAS is a financial services company, not everything published herein will be about numbers or investing. But no matter the topic, we hope for three things: 1) That you find the time you spend engaged worthwhile. 2) That you’ll reach out to us for help in any of our areas of expertise if something we discuss creates an urging in you to do so. 3) That you’ll share this with somebody new each time you read it. Thing One Debt And Freedom I recently watched an interviewer ask a wealthy man questions about all the money he had accumulated. Of course, he said he enjoyed all the things his money could buy but he also said something that struck me. Although I wasn’t recording him, I’ll still try to paraphrase what he said below. But before I do that, I’d like to share some statistics on debt: As of June 2021, the US Federal Debt was $28.5 trillion (that does not include unfunded liabilities like social security) As of the spring of 2021, total US household debt was $14.6 trillion As of the spring of 2021, the average American had $90,460 in debt. Now back to the interviewee’s response: ‘Yes, I suppose I am what you’d call a rich man. But one need not amass as much money as I have to buy the thing that is most valuable – at least in a free society – and that’s freedom itself. One need only avoid debt to be free. Of course, you might not be able to buy the luxury items most people associate with being rich, but those things are not synonymous with freedom and they’re bought by many a person who is heavily indebted. It’s better to live well below your means and avoid debt as much as possible. There is freedom in that. If I wake up in the morning and I don’t owe anybody anything – assuming I didn’t wake up in prison – I am free to do what I want. That is as true for the debt-free man who has millions in the bank as it is for the man of more modest means who has conducted his financial affairs accordingly.’ That interview reminded me of the wisdom of an old friend on the subject and I went looking for one of his many quotes on the subject: “Today as a country we have more debt than we have plans to repay during the next several decades at least. In fact, we have exactly zero plans to repay any debt and plan to spend more than we take in for the indefinite future. That's an untenable situation…That has serious implications for all of us, and especially for savers and investors, as well as for borrowers…In the final analysis, this will come down to sustainable economic growth. Sustainable economic growth comes from free people participating in a market-based economy. The bigger the role of government, the less freedom for both the people and the economy.” Very powerful observations from very wise men. My takeaway is this: While there may not be a single formula for becoming financially rich, there is a formula for being free - and maybe rich and free are the same thing in the final analysis.


Thing Two Leadership Without Easy Answers I’ve mentioned before that one of the required readings during my years in corporate America was a book called Leading Change by John Kotter. In that book, the author laid out an 8-step process for leading change in an organization. I can still remember the steps by heart. If you haven’t read it and you’re in need of that kind of insight due to the nature of your work, I’d highly recommend it. That said, there was another leadership book on the list that didn’t get as much fanfare but also had key concepts that I readily recall. That book, which was written by Ronald Heifetz, was called Leadership Without Easy Answers. Unlike Kotter’s book, which laid out the 8-step process for creating lasting change, Heifetz’s book was about defining leadership problems. Specifically, the author asserted that leadership problems could be categorized as either technical or adaptive. Technical problems were defined as problems for which there was a definitive solution. If a machine breaks, for example, the solution is to fix the machine. Or, if a body of water needs to be crossed routinely, the solution is to build a bridge. With technical problems, there was always a “right answer”. All that was needed to solve the adaptive problems was the appropriate level of expertise in the given field. Adaptive problems were defined as problems for which, due to the level of complexity and the number of variables at play, there was no singularly “right answer”. Some modern-day examples of adaptive problems are keeping an economy going during a pandemic, climate change, and poor educational outcomes for inner-city kids. In addressing adaptive problems (rather than pretending to know “the” solution), decentralized, broad experimentation with the appropriate feedback loops and the appropriate levels of accountability was the proposed methodology put forth by the author. To recap: Technical problems are easy for people with the right skill sets. Adaptive problems are easy for people who misdiagnose them as technical problems. Good leaders recognize the difference as well as their own limitations. We need more good leaders.

Thing Three Just A Thought “The true source of our suffering has been our timidity. We have been afraid to think. . . . Let us dare to read, think, speak, and write.” – John Adams