2025-01-31 21:55:00
If I told you a company was on track for $500M in sales in 2024 — up from $200M in 2023 and $70M in 2022 — and thriving thanks to massive secular tailwinds, what kind of business would you imagine? A cutting-edge AI company? What if I told you it was a soda company founded just five years ago in Oakland, California?
The flashiest companies don’t always deliver the highest returns for early investors. Let’s explore a comparison between two vastly different businesses: OpenAI and OLIPOP.
OpenAI is among the most influential and widely discussed companies in the world, and for good reason. It ushered in a golden age of LLMs, with staggering ripple effects: skyrocketing AI-related CapEx among tech giants, NVIDIA’s ascent to the world’s most valuable company by market cap (though it now ranks #3), and a dramatic resurgence in U.S. power demand growth.
Then there’s OLIPOP – a soda company. But not just any soda. OLIPOP makes a healthier alternative with gut-friendly prebiotics and plant fiber. Its nostalgic flavors, like Classic Root Beer and Vintage Cola, feel indulgent but deliver a BFY experience. It’s also delicious. Simple as that.
To compare the investment performance of OpenAI and OLIPOP’s first investors, we’ll use a simple returns multiple: the current value of their ownership divided by their initial investment. Since both companies raised their first rounds in 2019, this approach allows for a direct comparison, even though it doesn’t factor in timing (e.g., IRR).
For simplicity, we assume early investors did not participate in later rounds and were diluted. To calculate these returns, we need to determine:
Founded in 2015 as a nonprofit focused on advancing AI safely, OpenAI restructured in 2019 to fund its expensive pursuit of AGI. It created OpenAI LP, a “capped-profit” entity governed by the original nonprofit (renamed OpenAI Nonprofit). This structure allowed OpenAI to raise private capital while capping early investor returns at 100x, with any excess profits flowing back to the nonprofit.
At the time of this change, OpenAI also announced its first institutional funding round, led by Khosla Ventures. Let’s call this their Series A. Details remain unclear: PitchBook lists it as a $10M raise at an undisclosed valuation, while other sources suggest Khosla’s stake alone was $50M at a post-money valuation of $1B. We’ll assume a round size of $50M for 5% ownership.
Estimating dilution is tricky. Most of OpenAI’s funding post-Series A has been from Microsoft, which has poured in ~$14B through a mix of equity, Azure credits, and unique profit-sharing agreements. Sources disagree on the details, but key reported investments include $2B in 2021 and $10B in 2023. Adding to the complexity, OpenAI is now transitioning to a for-profit public benefit corporation, which could eliminate the 100x cap on early investor returns.
To simplify, we’ll assume:
Beyond Microsoft, OpenAI raised a $300M round in 2023 at ~$29B (Series B) and a $6.6B round in 2024 at $157B (Series C). Just yesterday, WSJ reported that OpenAI is in talks for a $40B round at a whopping $300B valuation (Series D). If this round closes as reported, Series A investors will be diluted from 5% to 3.2%, as shown in the table below.
At a $300B valuation, that 3.2% stake is now worth $9.5B – a 189x return on their initial $50M. Not bad!
OLIPOP’s story is far more straightforward. PitchBook shows its major funding rounds below:
OLIPOP’s seed investors have been diluted from an initial 28% ownership to roughly 13% today. The last disclosed valuation was during its 2022 Series B, but OLIPOP has grown significantly since then. To estimate its current valuation, we apply a forward revenue multiple from a public comparable to its projected next-twelve-months (NTM) revenue.
OLIPOP’s revenue growth has been remarkable, with several sources indicating it was on track for $500M in 2024 sales, up from $200M in 2023, and $73.4M in 2022. Extrapolating this 2022-2024 CAGR, we estimate NTM revenue of $1.3B. This projection seems reasonable, as revenue growth has shown little sign of slowing, and OLIPOP has significant room to expand distribution and retail presence.
Celsius Holdings (CELH), the maker of CELSIUS energy drinks, offers one of the only relevant public comparables. Applying their 3.8x forward revenue multiple to OLIPOP’s estimated NTM revenue yields an implied valuation of $5.0B.
At this valuation, seed investors’ 13% stake would be worth $639M – an astonishing 256x return on their $2.5M investment, outperforming even the 189x return estimated for OpenAI’s Series A investors.
While current valuations provide a snapshot, returns are realized at the point of liquidity. OLIPOP not only appears likely to deliver higher returns than OpenAI based on current valuations, but is also likely to experience less dilution – and the resulting erosion of returns multiples – before exit. To assess dilution risk, we must evaluate how much additional capital each will need to reach self-sufficiency, where revenues consistently cover operating and capital expenses. Ultimately, this hinges on the strength of each company’s unit economics.
OpenAI’s two primary revenue streams — ChatGPT subscriptions and API usage — present distinct unit economic profiles and associated challenges.
OpenAI offers several subscription tiers, from a free plan with limited features to a $200/month “Pro” plan. While paid tiers generate predictable monthly revenue, inference compute costs scale with user activity, which can be unpredictable. This means new users don’t always equate to profit growth. This challenge is exemplified by recent reports that OpenAI is losing money on GPT Pro users due to unexpectedly high inference costs, despite the $200/month price point, which Altman set with profitability in mind.
This issue is further exacerbated by the overwhelming proportion of free-tier users – estimated at 95% – who incur inference costs without generating revenue. As a result, paying users effectively subsidize these expenses. Inference compute costs for 2024 were projected at $2B, compared to an estimated $4B in total revenue.
The API’s pay-per-token model better aligns revenue with costs, but rising competition has eroded OpenAI’s pricing power. Token prices have plunged 89% in just 17 months, dropping from $36 per million tokens at GPT-4’s launch in March 2023 to $4 by August 2024. DeepSeek, which recently demonstrated that training and inference can be far less compute-intensive, has only accelerated this price collapse. Its reasoning and chat models are currently priced over 95% lower than OpenAI’s.
Training, while not directly tied to unit economics since it doesn’t scale with usage, remains a significant and growing financial burden. Costs are projected to reach $9.5B annually by 2026, with R&D expenses climbing from $1B in 2024 to over $5B in 2026. Though these projections predate DeepSeek’s breakthroughs in cost-efficient training, training will undoubtedly remain a massive and essential expense for sustaining AI leadership.
The following chart illustrates how high inference and training costs, a large base of free-tier users, and pricing pressures combine to create significant profitability challenges.
Training compute costs for 2024 were projected at $3B, with inference costs adding another $2B. Combined with Microsoft’s $700M revenue share and substantial operational expenses, these factors contribute to an estimated $5B loss for 2024, excluding stock-based compensation. These losses are expected to continue, with OpenAI projecting $44B in cumulative losses from 2023 to 2028. Profitability is targeted by 2029, with a revenue goal of $100B.
Covering these massive losses has required successive capital raises, most recently the $40B round, further diluting investors. If OpenAI’s $44B in projected losses through 2028 proves accurate, this latest capital infusion would have brought it close to self-sufficiency. However, a substantial portion of this round is reportedly allocated to OpenAI’s $19B commitment to President Trump’s $500B Stargate initiative, leaving a funding gap. As a result, more funding rounds and investor dilution are likely.
OLIPOP benefits from straightforward unit economics, driven by predictable production and distribution costs in the established soda industry. Key variable costs include raw ingredients, packaging, co-packing fees, and freight, while fixed costs cover overhead, staff, brand marketing, and R&D. Unlike OpenAI, OLIPOP doesn’t require massive upfront capital or speculative R&D. Its differentiated formulation, brand identity, and consumer positioning also help shield it from commoditization risks despite competition from peers like POPPI.
Regarding future dilution, OLIPOP is already fully profitable. While the company is likely to raise additional capital to accelerate growth, they don’t need to. This gives a more flexible path to exit – OLIPOP could sell to a strategic buyer or IPO without the pressure of hitting complex, multi-year milestones. Fewer funding rounds, less dilution, and a profitable business model mean early OLIPOP investors are far less exposed to the risk of a delayed exit and ownership erosion over time.
These returns underscore an important lesson: less flashy businesses can sometimes outperform even the most hyped tech companies. This is largely driven by the importance of entry price – achieving a 256x return is far more feasible from a $2.5M starting valuation than from $1B – as well as the path to profitability and the unit economics that pave the way.
While OpenAI is revolutionizing industries, OLIPOP is quietly dominating its category, proving that exceptional returns don’t always come from the highest-profile companies. For investors, the takeaway is clear – entry price and timing are critical, but so is recognizing opportunity in unexpected places.
Finally, full disclosure – Collaborative Fund is a Seed investor in OLIPOP – an investment made before I joined the team. Credit goes to my colleagues for identifying the opportunity early, and even more to the OLIPOP team for consistently exceeding expectations.
If this has left you craving OLIPOP or curious to learn more, you can check them out here. My favorite flavor is Vintage Cola.
2025-01-14 06:26:00
A day after the September 11th terrorist attacks, every member of Congress stood on the steps of the U.S. Capitol and sang God Bless America.
Could you imagine that happening today? It’s easy to say no, given how nasty politics has become. But if America faced an existential crisis like 9/11 again, I think you’d see the same kind of unity return. There’s a long history of enemies putting their differences aside when facing a big, devastating threat. People get serious when shit gets real.
If that sounds like wishful thinking to you, let me propose a reason why: Part of the reason today’s world is so petty and angry is because life is currently pretty good for a lot of people.
There are no domestic wars.
Unemployment is low.
Household wealth is at an all-time high.
Innovation is astounding.
It’s far from perfect, and even an optimist could list hundreds of problems and injustices. A pessimist could do worse.
But let me put it this way: As the world improves, our threshold for complaining drops.
In the absence of big problems, people shift their worries to smaller ones. In the absence of small problems, they focus on petty or even imaginary ones.
Most people – and definitely society as a whole – seem to have a minimum level of stress. They will never be fully at ease because after solving every problem the gaze of their anxiety shifts to the next problem, no matter how trivial it is relative to previous ones.
Free from stressing about where their next meal will come from, worry shifts to, say, a politician being rude. Relieved of the trauma of war, stress shifts to whether someone’s language is offensive, or whether the stock market is overvalued.
Imagine a fictional society that has unlimited wealth, unlimited health, and permanent peace. Would they be overflowing with joy? Probably not. I think their defining characteristic would be how trivial and absurd their grievances would be. They’d be enraged that their maid was 10 minutes late, stressed about whether their lawn was green enough, or despondent that their child didn’t get into Harvard.
Psychologist Nick Haslam once described what he called Concept Creep. It’s when the definition of a problem expands beyond its original boundaries. It often gives the impression that the world is getting worse when what’s changed is our definition of what counts as a problem. It happens two ways:
- Things previously considered normal are redefined as risks. Like a child being bullied at school, or mild anxiety being diagnosed as mental illness.
- Less severe instances of a risk are recast as major risks. Like having to delay retirement from age 65 to age 67.
In each case, the world can get better but people don’t feel it – they can even feel like they’re going backwards – because once a problem is solved it’s replaced by a new one, often with the same level of anxiety, fear, and anger.
A few things I keep in mind:
In a way, the best definition of progress is when you’ve knocked out the major issues and are left dealing with lower, less-severe ones.
Stress is an innovator. Nothing incentivizes like worry, so we should never want a world where people see everything as perfect.
People are problem solvers. It’s a great characteristic and the source of all progress. But when solving problems is core to your identity, you occasionally see trouble where none exists.
Being angry can be an intoxicating feeling. It offers a sense of moral superiority, because when you accuse others of causing problems, you’re implying that you are better than them. It feels great, and in a strange way some people love being pissed off.
The dumber the disagreements, the better the world actually is.
2024-12-16 18:27:00
They’re relevant to everyone, and apply to lots of things:
Who has the right answers but I ignore because they’re not articulate?
What haven’t I experienced firsthand that leaves me naive to how something works? As Jeff Immelt said, “Every job looks easy when you’re not the one doing it.”
Which of my current views would I disagree with if I were born in a different country or generation?
What do I desperately want to be true, so much that I think it’s true when it’s clearly not?
What is a problem that I think only applies to other countries/industries/careers that will eventually hit me?
What do I think is true but is actually just good marketing?
What looks unsustainable but is actually a new trend we haven’t accepted yet?
What has been true for decades that will stop working, but will drag along stubborn adherents because it had such a long track record of success?
Who do I think is smart but is actually full of it?
What do I ignore because it’s too painful to accept?
How would my views change if I had 10,000 years of good, apples-to-apples data on things I only have recent history to study?
Which of my current views would change if my incentives were different?
What are we ignoring today that will seem shockingly obvious in a year?
What events very nearly happened that would have fundamentally changed the world I know if they had occurred?
How much have things outside of my control contributed to things I take credit for?
How do I know if I’m being patient (a skill) or stubborn (a flaw)? They’re hard to tell apart without hindsight.
Who do I look up to that is secretly miserable?
2024-11-27 05:33:00
“Our political leaders will know our priorities only if we tell them, again and again, and if those priorities begin to show up in the polls.”
— Peggy Noonan
Ahead of Thanksgiving, I thought it would be timely to write about something every American should be thankful for, so here it goes.
The United States just concluded its 60th presidential election and every American should be thankful.
Now, before everyone who voted for Kamala Harris starts to fume, hear me out.
The reality is that every American should be thankful after every election, regardless of the outcome.
You heard that right.
Every American should be thankful after every election. In fact, every American should also be thankful that these elections are often determined by razor thin margins.
Why?
Because these elections highlight one of America’s greatest superpowers – its “optionality”.
Let me explain.
Optionality is defined as, “The ability, but not the obligation, to choose a specific path.”
America’s optionality stems from the fact that its citizens have the ability, but not the obligation, to change the country’s direction every four years. If things are going well, Americans can choose to “stay the course”. However, if they believe the party occupying the White House has swung too far in one direction, they can vote to move the country in a different one.
Don’t get me wrong. America has a lot else going for it, including being protected by two massive oceans on its coasts and two friendly nations to its north and south, vast resources (energy, farmland, and navigable waterways), a diverse population, an educated workforce and entrepreneurial ethos, and the world’s strongest military, economy, and financial markets. However, Americans’ ability to choose how to leverage these assets most effectively is what makes it the most dynamic country and economy in the world.
As to why Americans should be thankful that their elections are determined by razor thin margins, the fact is that if America had one dominant political party (i.e. “one party rule”), it would be much more difficult to enact change. Thankfully though, American swing voters play an instrumental part in how the country is run, as evidenced by the most recent election.
Now, a logical response would be,
“But don’t these razor-thin margins lead to elevated tension, friction, and division, especially in the lead up to and after elections?”
Of course, but that is because optionality isn’t free. In fact, it always comes with a cost. Yet, the tension and division associated with optionality is almost always cheaper than the alternative.
Look no further than Argentina.
A century ago, Argentina was one of the strongest and wealthiest countries in the world. With endless resources, a diverse and literate population, and a diversified industrial base, Argentina was positioned for an incredibly bright future. European nations had started investing heavily, while countless multinational companies were opening offices or plants throughout the country (including manufacturing, retail, advertising, construction, and finance companies, as well as law firms). Some even declared its capital, Buenos Aires, “The Next Paris”.
Then, everything began to change.
In 1913 Argentina suffered a coup d’état, which was followed by a series of government overthrows that resulted in alternating periods of democracy and military rule. Then, with the rise of Peronism in the mid-1940’s, the country embarked in what amounted to more than 75 years of “one-party rule”.
The result?
Argentina went from being one of the world’s wealthiest countries in the world as measured on a GDP-per-capita basis to one ravaged by inflation (regularly north of 20% and over 100% in 2023), corruption, poverty (currently over 40%), and a rolling series of debt defaults.
So, how did this happen?
It happened because Argentinians lost their optionality. They lost their ability to institute change. To shape their destiny. As a result, a country many thought would be one of the next great global powers instead suffered a historic decline.
Sound familiar to something we are witnessing today?
It should, because after Xi Jinping removed term limits and instilled himself as “president for life” in 2018, the Chinese people were stripped of their optionality (while the Chinese do not have democratic elections, its leaders in the years prior to Xi typically responded to the needs/wants of the Chinese people and were chosen by consensus every ten years).
In doing so, Xi appears to have put China on a path similar to Argentina, or for that matter Russia, Turkey, Iran, and many Middle Eastern countries that are currently one-party or autocratic states. Unsurprisingly, these are the countries saddled with corruption, unbalanced economies, and on poor terms with the “West”.
Meanwhile nations with the most vibrant democracies, and therefore optionality (e.g., countries like Australia, Denmark, Finland, The Netherlands, New Zealand, Norway, Sweden, Switzerland, and the UK) are also the least corrupt, have the most balanced and resilient economies, and are some of the United States’ strongest allies. Unsurprisingly, these nations have also historically had some of the strongest equity markets.
Funny how that works.
The fact is, optionality is one of the most underappreciated things in life. It is what enables you to be nimble, change course, adjust on the fly, and self-correct. It is also what allows you to get through difficult moments, while simultaneously participating in the good ones.
While Americans may fight over the country’s path forward, be vicious with one another at times, and either get upset when their candidate loses or thrilled when they win, we should cherish our elections because it means we have the ability (but not the obligation) to change the path we are on. To choose our destiny.
As it relates to China, so long as optionality is absent, consumer confidence will remain depressed (has fallen more than 30% since Xi removed term limits), net capital outflows will continue, economic conditions will likely deteriorate further, and its equity markets will languish.
Frankly, this is what makes the country feel un-investable to me right now.
That said, if China reverts to a system of term limits, things could change quickly and dramatically.
After all, this is precisely what has happened in Argentina after its citizens elected libertarian Javier Milei last year. The results so far have been astounding as Argentina has experienced a material drop in inflation, green shoots in economic growth, and world leading equity returns as a result of his sweeping changes.
Often times the things we should be most thankful for aren’t obvious because they come with a cost. In the case of our elections, the cost is more than well worth it.
2024-10-15 06:28:00
After college, my wife (who was then my girlfriend) and I got an apartment in the Seattle suburbs. It was amazing – a perfect location, a beautiful apartment, even had a view of the lake. The economy was such a wreck at the time that we paid almost nothing for it.
A few months ago I reminisced to my wife about how awesome that time was. We were 23, gainfully employed, living in our version of the Taj Mahal. This was before kids, so we slept in until 10am on the weekends, went for a walk, had brunch, took a nap, and went out for dinner. That was our life. For years.
“That was peak living, as good as it gets,” I told her.
“What are you talking about?” she said. “You were more anxious, scared, and probably depressed then than you’ve ever been.”
Of course, she was right.
If I think deeper than the initial knee-jerk memory, I remember being miserable. I was overwhelmed with career anxieties, terrified that I wouldn’t make it, worried I was about to be fired. For good reason: I was bad at my job. I was insecure. I was nervous about relationships being fragile.
In my head, today, I look back and think, “I must have been so happy then. Those were my best years.” But in reality, at the time, I was thinking, “I can’t wait for these years to end.”
There’s a Russian saying about nostalgia: “The past is more unpredictable than the future.” It’s so common for people’s memories about a time to become disconnected from how they actually felt at the time.
I have a theory for why this happens: When studying history, you know how the story ends, which makes it impossible to imagine what people were thinking or feeling in the past.
When thinking about our own lives, we don’t remember how we actually felt in the past; We remember how we think we should have felt, given what we know today.
I remember myself as being happier than I was because today, looking back, I know that most of the things I was worried about never happened. I didn’t get laid off, the career turned out fine, the relationships endured. I slayed some demons. Even the things that were hard and didn’t end up like I wanted, I got over.
I know that now.
But I didn’t know that at the time.
So when I look back, I see a kid who had nothing to worry about. Even if, at the time, all I did was worry.
It’s hard to remember how you felt when you know how the story ends.
I was recently asked at a conference how investors should feel about the stock market given that it’s basically gone straight up over the last 15 years.
My first thought was: you’re right. If you started investing 15 years ago and checked your account for the first time, you would gasp. You’ve made a fortune.
Then I thought, wait a minute. Straight up for the last 15 years? To echo my wife: What are you talking about?
Are we going to pretend like the 22% crash in the summer of 2011 never happened?
Are we supposed to forget that stocks plunged more than 20% in 2016, and again in 2018?
Are we – hello? – now pretending that the worst economic calamity since the Great Depression didn’t happen in 2020?
That Europe’s banking system nearly collapsed?
That wages were stagnant?
That America’s national debt was downgraded?
Are we now forgetting that at virtually every moment of the last 15 years, smart people argued that the market was overvalued, recession was near, hyperinflation was around the corner, the country was bankrupt, the numbers were manipulated, the dollar was worthless, on and on?
I think we forget these things because we now know how the story ends: the stock market went up a lot. If you held on tight, none of those past events mattered. So it’s easy to discount – even ignore – how they felt at the time. You think back and say, “That was so easy, money was free, the market went straight up.” Even if few people actually felt that way during the last 15 years.
So much of what matters in investing – this is true for a lot of things in life – is how you manage the psychology of uncertainty. The problem with looking back with hindsight is that nothing is uncertain. You think no one had anything to worry about, because most of what they were worrying about eventually came to pass.
“You should have been happy and calm, given where things ended up,” you say to your past self. But your past self had no idea where things would end up. Uncertainty dictates nearly everything in the current moment, but looking back we pretend it never existed.
My wife and I recently bought a new house. Like most of the country, it cost – let me put this mildly – a shitload more than it would have a few years ago.
We started talking about how cheap homes were in 2009. In our region they literally cost four to five times more today than they did then – plus, interest rates were low in 2009, and there was an endless supply of homes on the market to choose from. We said something to the effect of, “People were so lucky back then.”
Then we caught ourselves, shaking off delusion, and thinking, “Wait, do we really have nostalgia for the economy of 2009?” That was literally the worst economy in 80 years. All anyone talked about was how terrible everything was. Homes were cheap because unemployment was 10% and the stock market was down 50%.
Looking back, we know 2009 was not only the bottom but the beginning of a new boom (albeit with volatility). But we didn’t know that back then, and it gave us plenty to worry about that’s easy to forget today. What felt like risks then now look like opportunities. What felt like dangers then now look like adventures.
In a similar way, Americans are still nostalgic about life in the 1950s. White picket fences, middle-class prosperity, happy families, a booming economy. There was also the ever-present risk of nuclear annihilation. Today, we know the missile was never launched. But the 5th-grader doing nuclear attack drills by ducking under her school desk? She had no idea, and had plenty to worry about that is impossible to contextualize today, since we know how the story ends. So of course she wasn’t as happy as we think she should have been.
I subscribe to a few Instagram accounts devoted to 1990s nostalgia. I was a kid then, so I’m a sucker for this stuff. The comments on those posts inevitably say some version of, “Those were the best years. The late ‘90s and early 2000s was the best time to be alive.” Maybe it was pretty good. But we also had: A bad recession in 2001, a contested presidential election, 9-11 – which utterly reshaped culture – two wars, a slow economic recovery, on and on. It’s easy to forget all of those because we know the economy recovered, the wars ended, and there wasn’t another major terrorist attack. Everything looks certain in hindsight, but at the time uncertainty ruled the day.
Of course, things could have turned out differently. And for many people – those who were laid off, or did lose their home, or did die in war – the happy nostalgia of remembering what life was like before might well be valid.
But as Thomas Jefferson said, “How much pain have cost us the evils which have never happened.”
Part of the reason nostalgia exists is because, knowing what we do today, we often look back at the past and say, “you really didn’t have much to worry about.” You adapted and moved on. Isn’t that an important lesson as we look ahead?
Understanding why economic nostalgia is so powerful – why it’s almost impossible to remember how uncertain things were in the past when you know how the story ends – helps explain what I think is the most important lesson in economic history, that’s true for most people most of the time:
The past wasn’t as good as you remember. The present isn’t as bad as you think. The future will be better than you anticipate.
2024-09-24 04:51:00
The ultimate success metric is whether you get what you want out of life. But that’s harder than it sounds because it’s easy to try to copy someone who wants something you don’t.
I’ve seen this play out twice: An incredibly talented young writer with a big blog following joins a major media company where they quickly fizzled into irrelevance.
It was the same story each time: When the writer was young and independent they could write with their own voice, their own style, their own flair. They could run with their own intuition.
They were artists, which was what made them great.
Then they joined a big media company, which said, “That’s not how we do things here. Here’s our style book, you must follow it to a T. And meet Gordon, he’s your new editor. He will tell you what to write and when to write it. Good day, sir.”
They became employees, which was their downfall.
And these were very successful media companies. They knew what kind of writing worked and what their readers wanted. But of course it didn’t work out. What was right for the company was wrong for the writer. A talented person can quickly become mediocre when you force them to be someone they aren’t.
Even if you’re not an entrepreneur, there’s so much to learn from that.
It’s so common to on one hand recognize how much variety there is among people – different personalities, backgrounds, goals, skills – but on the other hand ask, “What’s the best way to do this thing?” as if there can be one universal answer for vastly different people.
One area this impacts people is with money, where more damage is caused not by dumb financial plans but by reasonable ones that just aren’t right for you.
How you invest might cause me to lose sleep, and how I invest might prevent you from looking at yourself in the mirror tomorrow. Isn’t that OK? Isn’t it far better to just accept that we’re different rather than arguing over which one of us is right or wrong? And wouldn’t it be dangerous if you became persuaded to invest like me even if it’s wrong for your personality and skill set?
Or take how we spend money. You like this, I like that. Who cares? It gets dangerous when you assume that if someone else is spending their money differently they either must be doing it better than you or doing it wrong. And that’s actually very common, because it’s easy to interpret someone spending money differently than you as an attack on what you’ve chosen to spend money on.
It’s possible to be humble and learn from other people while also recognizing that the best strategy for you is the one closest aligned with your unique personality and skills.
A few things happen when you do.
You do your best work and have the most fun when you’re not burdened by fear that someone else thinks you’re doing it wrong.
You measure how you’re doing against your personal benchmarks, which can both push you to your potential and prevent you from chasing someone else’s.
You have a much better shot of getting what you want out of life. Which, again, is all that really matters.
