Capitalogix

The Next Big Thing ... Megacities

Population growth is an interesting measure. Historically, growth has been slow ... but something changed that, and the implications are stunning.

Scientists estimate that humans have existed for over 130,000 years.

It wasn’t until 1804 that the world’s population reached 1 billion. The population doubled once more by 1927, 123 years later, and then again by 1974, a mere 47 years later.

The Agricultural Revolution spurred early population growth. Subsequently, since 1804, the Industrial Revolution, alongside new technologies and advancements in health and safety, has dramatically enhanced the quality of life and accelerated population growth.

The global population continues to expand as more women are giving birth, despite the statistical trend of each woman having fewer children. Here is a chart showing that.

via Axios (Click for an Interactive Graph)

World population growth rates peaked in the late 1960s and have declined sharply in the past four decades. Nonetheless, world population figures continue to grow. We’re expected to reach 9 billion people by 2050, but a lot of that growth comes from developing countries—it also almost exclusively comes from urban areas. 

Urbanization: Megacities

Here is another trend worth noting. Since 2014, over 50% of the world’s population has lived in urban areas – today it’s approximately 55%. That number is growing.

Ironically, as we grow more digitally connected, our world is shrinking, and our populations are concentrating. 

An interesting consequence of this rapid urbanization and population growth in developing countries has been the increased development of Megacities – defined as cities with populations greater than 10 million. Today, there are 33 megacities – more than triple the number in the 1990s. 

This creates a set of interesting opportunities and challenges. For example, how will these cities deal with infrastructure (e.g., sanitation, transportation, etc.)?

via Statista

As information and money become increasingly decentralized, and it becomes easier and easier to trade and communicate globally, it’s interesting to see a centralization of the population. 

What do you think the consequences will be?

Just Sardines In A Tincan...

I fly a lot.

In fact, I hit five million "butt-in-seat" miles on American Airlines in 2019 (back when frequent flyer programs were about flying frequently rather than credit card spending).

It is 2024, and I am now just below 5.5M.  That means I averaged a little over 100,000 miles per year, even through the COVID shutdown.

Yes, I expect that my travel will slow down.  But as I traveled, I didn't expect it to continue at the pace it did. 

Nonetheless, it has been good for me, and the time spent traveling has been productive.

I have a different workflow when I travel, and it works for me.

Ultimately, I believe that good things happen when you are in motion! 

Many people, however, are focused on the hassle.

The practical realities of travel mean I spend some time thinking about the things airlines do well or poorly.  Nonetheless, I appreciate the benefits more than the frustrations.

As you probably noticed, Airline Status means much less today than it used to (which is why it feels even more important to get).  Every week, the airlines seem to make the space between seats smaller while the time it takes to find overhead luggage space gets shorter.  It seems like most airlines could change its slogan to "We are not happy until you're not happy."

Yet the planes themselves are getting better.  Here, for example, is what an empty 787 looks like. 

It looks more like a set from Star Trek than the hellscape passengers complain about regularly. 

What about the boarding process? 

Here is a video that presents the findings from studies on experimental boarding methods that work better. 

via CGP Grey

If you really don't like commercial flying, you can fly on any of the "economical" private options like JetSmarter or WheelsUp. Or, better yet, you could be like this guy and buy the world's only private Boeing 787 Dreamliner. 

via Sam Chui

You can rent it out for a measly $70k an hour ... What a bargain!

Of course, you could also use Zoom.  Times are changing!

I fly a lot.

In fact, I hit five million "butt-in-seat" miles on American Airlines in 2019 (back when frequent flyer programs were about flying frequently rather than credit card spending).

It is 2024, and I am now just below 5.5M.  That means I averaged a little over 100,000 miles per year, even through the COVID shutdown.

Yes, I expect that my travel will slow down.  But as I traveled, I didn't expect it to continue at the pace it did. 

Nonetheless, it has been good for me, and the time spent traveling has been productive.

I have a different workflow when I travel, and it works for me.

Ultimately, I believe that good things happen when you are in motion! 

Many people, however, are focused on the hassle.

The practical realities of travel mean I spend some time thinking about the things airlines do well or poorly.  Nonetheless, I appreciate the benefits more than the frustrations.

As you probably noticed, Airline Status means much less today than it used to (which is why it feels even more important to get).  Every week, the airlines seem to make the space between seats smaller while the time it takes to find overhead luggage space gets shorter.  It seems like most airlines could change its slogan to "We are not happy until you're not happy."

Yet the planes themselves are getting better.  Here, for example, is what an empty 787 looks like. 

It looks more like a set from Star Trek than the hellscape passengers complain about regularly. 

What about the boarding process? 

Here is a video that presents the findings from studies on experimental boarding methods that work better. 

via CGP Grey

If you really don't like commercial flying, you can fly on any of the "economical" private options like JetSmarter or WheelsUp. Or, better yet, you could be like this guy and buy the world's only private Boeing 787 Dreamliner. 

via Sam Chui

You can rent it out for a measly $70k an hour ... What a bargain!

Of course, you could also use Zoom.  Times are changing!

House Prices Versus Income in America

As we discuss the economy, I also think about my youngest son, who is looking at houses right now. 

In countless ways, today's youth have it easier than we did. Access to opportunities, the internet, capital sources, etc., has gotten more accessible, yet there are a few things that have gone the other way, such as buying a house. 

via visualcapitalist

The chart above does not show interest rates or inflation. For example, in 1984, the 30-year fixed rate was close to 14%, over double what it is now. 

But, to put things in perspective ... I moved to Texas in 1986. Part of my rationale was that I could buy a "nice" home for a little less than my initial starting salary as a lawyer.

Recently, policy decisions have vastly increased house prices. How much? Median house prices are nearly 6x the median household income in America. Meanwhile, the economics of renting are significantly better than buying. According to the WSJ, it's 52% more expensive to buy than rent due to mortgage prices. 

When housing costs are this high, consumer spending and mobility are reduced, making individuals less likely to relocate for job opportunities. 

We live in interesting times. Sometimes, I miss the good old days.

The Time You Have Left ...

I recently asked How Long Do You Have Left?

As I wrote that article, I was reminded of my TEDx talk on my father's passing. 

In finance, the "time value of money" refers to the principle that the purchasing power of money can vary over time (meaning, money today might have a different purchasing power than money later). This is partly because money's future value might be calculated by accounting for other variables (like interest earned, inflation accrued, etc.).

A similar calculation applies to life ... or living.

Live Like You Only Have a Year Left.

During the last part of my Dad's life, I think he would have done almost anything for a little more time.

Things that used to be unimportant, or even mildly irritating, took on increased importance. For example, a dinner together became almost a sacred event; a kiss goodnight was truly heart-felt; and saying good-bye meant something ... because it could be the last time.

Nevertheless, as a result of that focus, he took more life out of that time.

Shouldn't we do the same thing?  Think about it ... We are never going to be younger than we are, right now.  We are never going to have more time to fix a big mistake.  Isn't it likely that the time value of your life, is worth maximizing?

If you realize that your time is worth more than it ever will be, what can you do differently now to get the most out of it?

For another impactful view of life, here's a great video on how you spend the time in your life – visualized using jelly beans. I think it's pretty powerful and worth watching. 

 

Ze Frank (via YouTube)

 

So, if (after accounting for sleep, eating, work, commute, TV, chores, and more) an average person only gets 2,740 days to do what they want ... those days are precious. That's less than 8 years of "free time" for you to make the most of. 

Based on the demographics of who's likely reading this, you may have half that time (or a fourth).

What are you going to focus on? Making the most money? Helping the most people? Spending the most time with your family? Relaxing? I hope you don't choose worrying. 

There's never a better time than now to live a life worth living ... and only you can decide what that means!

I'd love to hear what you choose. 

Best wishes for a Happy Holiday Season ... and I hope you spend your time wisely and well in 2024!

Happy New Year!

I love planning for the new year – both personally and professionally.  To read about my professional planning, check out this article. 

I've always been a big-picture person, so I tend to think in 5, 10, and 20-year increments ... but thinking about the coming year is helpful, too.

I think about it a bit like using a map.  Even if you know your intended destination, you still have to start with 'where you are' to figure out the best way to get there.

There are seemingly infinite potential paths ... but motion in a direction isn't really "progress" if it doesn't take you towards your desired destination.

At midnight tonight, it'll be 2024.  I know a new year isn't really a blank slate, but I've always enjoyed the symbolism.  So, I thought I'd revisit how I set New Year's resolutions. 

To start with, resolutions only work if you actually "want" to make them happen.  It's one thing to hope that something magically falls in your lap; it's another to want to do the work. 

With that being said, here are some tips. 

• Focus on What You Want.
• Focus on Why You Want It.
• Focus on Ways You Might Get it.
• Focus on Evidence of Progress.

Below, I'll take you through an example of each of the four steps.

Moving Towards a Solution, Rather Than Suffering From the Problem.

Before I got back into my health, my first instinct was to think, "I need to lose weight."  Knowing that "you're fat" isn't helpful … my head quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle."

Blah, blah … They are just words.  What I needed was something specific, measurable, and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do.  I can do better than that.

Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

This post isn't about health and fitness; it is about the mindset and techniques you can use to set empowering goals and plans in any situation.

So, while I could list many ways to lose weight (and I might even remember to do some of them), leveraging a driving force creates momentum.  In other words, the first step in "Doing" is knowing WHY you want something.

I really do want to be healthy, fit, and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  However, to do those things, I must find better ways to live a healthy lifestyle.

The WHYs are just as important for business goals too.

Focus on Potential Solutions Rather than Problems or Challenges.

Obstacles Exist.  The bad news: I don't eat fish, and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports.  I rarely get 7 hours of sleep, and who'd have thunk it, but being the CEO of a startup is stressful.  The good news: none of those things matter ... and even if they did, it just would mean that I have a lot of room for progress.

It is natural to focus on obstacles.  But most obstacles are surmountable - with a big enough WHY, I'll even start to eat vegetables.  Instead of dwelling on the limitations, use them as a reminder to focus on potential solutions instead.  They are beacons marking the way.

How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do ... and another is of things Not-To-Do.

Here are some of the sample To-Do Items:

• I will drink more water than coffee.
• I will stretch or do basic calisthenics on days that I do not go to the gym.
• I will make a healthy shake as a meal replacement rather than a snack if I'm hungry between meals.
• I will focus on relaxation and meditation as much as I focus on strength & physical exercises.

Here is the actionable list of Not-To-Do Items.

• I will not buy new bigger pants or wear stretchy pants because of an expanding waistline.
• I will not eat snacks out of their container – and will portion out what I want first.
• I will not compare my current level of fitness to what I used to be able to do.  Instead, I will focus on my actions and improvement.

Create Healthier Habits.

It is easy to follow a routine.  So, here's another tip ... make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

• Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
• Buy healthy snacks, like fruit, raw nuts, or organic energy bars (instead of chips).  If Doritos aren't in your house, it's hard to eat them on any regular basis. 
• When you do snack, don't keep them near you.  Make yourself get up to get them.  That'll make it harder for you to binge. 
• Enjoy listening to music, audiobooks, or podcasts during your "exercise time." Dedicating time to something doesn't mean you can't be multitasking.
• Park at the end of the parking lot, so you get to walk.
• Meet with friends at the gym or a hiking spot rather than a bar or restaurant.

You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly to make a big difference?  Which things can you automate or outsource?

For two books about the subject, I recommend Tiny Habits by B.J. Fogg and Willpower Doesn't Work by Benjamin Hardy. 

Focus on Your Progress.

In this case, it really is about the journey.  Instead of tracking how far you have to go ... notice how far you've come.  Utilize an internal locus of control.  It is about creating energy, momentum, and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

• Find shoes that don't hurt your feet.
• Pick a gym or a personal trainer that you enjoy.
• Run more than two laps without stopping.

It doesn't matter what they are ... they all count, as long as you know that you are moving in the right direction.

Summary

The point of this exercise was not really to focus on fitness.  These techniques and goal-setting tools work in any situation.  The principles are:

1. First, figure out what you want and why it is important to you.  Only focus on the few things that are actually important to you. 
2. Second, find something you can do, right now, which moves you in the right direction.
3. Third, notice which things create (rather than take) energy.  Spend your time on those, and automate or create routines to take care of the rest.
4. Fourth, plan forward, but measure backward.  Set milestones so that you can recognize and celebrate your progress.

In my business, this translates to having a mission and vision - it's what we want, why it's important to us, and a basic strategy to get there.  Then, we create yearly "Big 3" goals that move us toward that long-term vision.  Then, the team creates SMARTs (goals that are specific, measurable, attainable, relevant, and timely) and KPIs (key performance indicators) so they know where to spend their time, and what milestones tell them they're on the right track.

It isn't magic, but it works.

Hope this helped.

How Long Do You Have Left?

We only have a limited time on this earth - and a lot of it is taken by frivolous activities. 

How much time do you think the average millennial spends on their phones ... or a baby-boomer sits in front of the TV?

The answer is a lot.

via dailyinfographic

Nine years in front of entertainment devices - another 10.5 years spent working.  You get the idea.

If you have goals you want to accomplish, aspirational travel, and lifestyle plans - this really puts the idea of finding and living your passion in perspective. 

Do you have the time to waste it?

VisualCapitalist put together a chart projecting longevity based on 2020 mortality rates.

 

via visualcapitalist
 

I turned 60 this July, so I only have 20 years left, according to this calculator.   I expect more!

There are some interesting statistical facts in this; for example, an average American baby boy can expect to live until 74 ... but if that boy turns 21, his life expectancy jumps to over 75. 

While these numbers seem pretty high, there are two things to consider. First, COVID heavily reduced these numbers because mortality rates went up. That likely won't continue (though it will likely continue to affect your insurance premiums and pension benefits). 

Also, remember that these numbers are based on 2020 averages, which likely differ from you (specifically considering your race, income, location, etc.). These numbers also don't take into account expected medical and technology advances, etc. 

Finally, I think Purpose is one of the most important catalysts of longevity. People often die when they retire ... not because they're done working, but because they're done striving. 

If you're not growing, you're dying!

Here Are Some Links For Your Weekly Reading - October 8th, 2023

Reports of bed bug infestations in Paris are so bad the government is deploying sniffer dogs to inspect trains.

 

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Why Collaboration With Generative AI is So Tricky—And How to Make It Work. (Fortune)
• AI-Assisted Decision-Making. (Every)
• 10 Questions to See If You Have a Great Idea. (Entrepreneur)
• At What Age Do You Hit the Peak of Your Career? (Economist)
• Rethinking Flow States by Introducing 9 Antecedents. (PsychologyToday)

 

Trading Links:

• Visualizing the Pyramid of Financial Risk. (Advisor)
• The Invisible Hand: AI in Financial Markets and Algorithmic Trading. (Medium)
• India Surpassed China as the World's Most Populous Country this Year. (UnitedNations)
• 10 Fast Food Chains Ranked by Average Sales Per Store in the U.S. (Infographic)
• Even Michael Lewis Can't Make a Hero Out of Sam Bankman-Fried. (NYT)

Camp Kotok: Back Again!

I was just in Maine at Camp Kotok, a private gathering of economists, fund managers, and other financial industry professionals. 

There was limited phone service or access to the Internet… so people had to talk with each other.  And unlike most of my schedule, almost everything happened outside.  Discussions, while vigorous, often take place while fishing or grilling. 

At a past Camp Kotok, I did this interview with Bob Eisenbeis, Cumberland Advisors' Vice Chairman & Chief Monetary Economist.  Check it out. 

 

Cumberland Advisors via YouTube

 

Camp Kotok is an interesting place. The event transformed from a simple retreat after 9/11 ... when many attendees experienced the WTC collapse and came together for some fellowship and to discuss their experiences.  From then on, attendance grew, and the gathering evolved. 

As a side note, before the gathering became known as Camp Kotok, it was referred to as the “Shadow Fed” (in part because of the people who attend).

Attendees are bound to “Chatham House Rules” (participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed).  However, general thoughts, ideas, forecasts, and comments can be discussed and published.

On this trip, I talked with David Kotok about the event, what it means, and how it’s grown.

The intent of the participants (and the environment) helps create a platform for meaningful and productive conversations about the opportunities and obstacles facing America and the world. 

Every year, I come back with new ideas and fresh perspectives on things I forget to think about. 

AI was on everyone's mind.  The financial industry is changing quickly, and I’m confident that advanced technology will become an even bigger driver. 

In general, economically, the mood was cautiously optimistic to bullish. 

Remember, it is an election year!

Time Flies - Another Year, Another Lesson

Thursday was my 60th birthday.  I can't believe how time flies.  Birthdays seem to come more quickly as you get older.

It makes sense, though, I suppose.  When you were four, a birthday represented a quarter of your life.  Now, a year represents a much smaller percentage.

While it's not always pleasant getting older, it sure beats the alternative!

This year, I made a concerted effort to be more healthy, fit, and vital in mind, body, and spirit. I said I wanted to sprint into 60, rather than roll into it.

If you are going to live longer, your future has to be compelling to you.  Otherwise, who would want to extend their stay?  That is why I strive to keep my future bigger than my past.  

As time marches on, I become increasingly grateful for the friends and family who share the journey with me.  This year, I spent my birthday in San Diego, surrounded by family and some close friends.  On Saturday, they surprised me with a "Birthday Palooza," celebrating my 60th along with my wife Jennifer's 50th. 

 

 

When I was a kid, I couldn't imagine being where I am today ... nor could I imagine the path that got me here. 

Looking back, it all seems to make sense (even though it felt pretty random while making my way through it).

I feel lucky to have been in the right place at the right time, so consistently, and to find the gift in most situations (even when it seemed so well hidden).

I'm grateful for a lot today, and as much as I love innovation, sometimes things are perfect just the way they are. 

Hopefully, you took time this weekend to let someone know they're important to you.  If not, now is a good time for that too.

Onwards!

Do You Think the U.S. Has Aliens?

I'll admit to being fascinated by the idea of aliens.  Growing up in the 60s and 70s, there was no shortage of science fiction fantasies imagining what a space-faring civilization would look like and, more importantly, what would we, the Earthlings, do when they made contact. 

Last year, there was a U.S. congressional hearing on Unidentified Flying Objects.  While there wasn't any proof of aliens, they did admit to phenomena they couldn't explain with their current information.

Now, we have multiple former military officials testifying in a House of Representatives meeting that the U.S. has recovered not only spacecraft but alien biological matter for decades.  While I do believe in the possibility of aliens, I remain skeptical.

There are many stories (or theories) about how we had encountered aliens before and just kept them secret.  For example, in 2020, a former senior Israeli military official proclaimed that Aliens from a Galactic Federation had contacted us - and that not only is our government aware of this, but they are working together. 

In contrast, I have found it more realistic and thought-provoking to consider theories about why we haven't seen aliens until now.

For example, the Fermi Paradox considers the apparent contradiction between the lack of evidence for extraterrestrial civilizations and the various high probability estimates for their existence. 

Let's simplify the issues and arguments in the Fermi Paradox.  There are billions of stars in the Milky Way galaxy (which is only one of many galaxies).  Each of these stars is similar to our Sun.  Consequently, there must be some probability of some of them having Earth-like planets.  Further, it isn't hard to conceive that some of those planets should be older than ours, and thus some fraction should be more technologically advanced than ours.  Even if you assume they're only looking at evolutions of our current technologies - interstellar travel isn't absurd.  Thus, based on the law of really large numbers (both in terms of the number of planets and the length of time we are talking about) ... it makes the silence all the more deafening and curious. 

If you are interested in the topic "Where are all the aliens?"  Stephen Webb (who is a particle physicist) tackles that in his book and in this TED Talk.   

 

via TED

In the TED talk, Stephen Webb covers a couple of key factors necessary for communicative space-faring life. 

1. Habitability and stability of their planet
2. Building blocks of life 
3. Technological advancement
4. Socialness/Communication technologies

But he also acknowledges the numerous confounding variables, including things like imperialism, war, bioterrorism, fear, moons' effect on climate, etc. 

Essentially, his thesis is that there are numerous roadblocks to intelligent life - and it's entirely possible we are the only planet that has gotten past those roadblocks - or that there might have been others in the past, or others may develop in the distant future. 

What do you think?

Here's another article I wrote on the subject, titled "Are We Alone In The Universe?"

Finally, here are some other links I liked on this topic.  There is some interesting stuff you don't have to be a rocket scientist to understand or enjoy. 

• 75 Reasons We Don't See Aliens 
• Wait But Why: The Fermi Paradox
• A New Theory on Why We Haven't Found Aliens Yet
• A List of Solutions to The Fermi Paradox
• Dissolving the Fermi Paradox, Future of Humanity Institute, Oxford University

To Infinity and Beyond!