Gary North
Lots of things, of course. We live in a world of scarcity. We cannot get everything we want at zero price. We can barely get anything we want at zero price.
But these same sorts of things are holding back everyone else, too. So, why are a few people so far ahead of you?
The fact is, almost everyone is ahead of you in something. That is the great gift to society of specialization. In a free society, each person is legally free to pursue his interests, using his skills and capital in an attempt to achieve success as he or she defines it. The rest of us are just not interested in matching most people in their pursuit of happiness, excellence, or money. “Do your own thing,” Americans say, and they generally mean it. “To each his own.” They mean that, too.
I am speaking about your thing. What’s holding you back?
Let’s round up the usual suspects.
INSUFFICIENT MONEY
The bills come due each month. You have to hustle to pay them. “Money doesn’t grow on trees!” (True enough; it grows in the computers of fractionally reserved banks.)
You are out there buying money. You buy it with your innate skills, your time, and your years of experience. You trade time for money.
Almost everything in life is a trade-off between time and money.
If you are short of money in modern society, you are long on time if you’re in the middle class or higher.
In the allocation decisions between time and money, you must conserve the resource that you value most highly. Most people say they worry more about money more than they worry about time. But if they kept time stubs the way they keep check stubs, their records would testify against them. They are profligate with their time far more than they are profligate with their money. They waste more time than they waste money.
The great time drain today is television. Radio preceded television, with similar results. I think of Jack Benny’s running gags about money. “Your money or your life,” the radio thug told him. “I’m thinking! I’m thinking!” was his legendary reply. He got rich kidding about his obsession with money. He got rich because so many people allocated so many hours listening to him, and then went out to buy the products his sponsors promoted.
Jack Benny was a net gainer in the transaction. So were his listeners, or else they would not have listened. But they, unlike Benny, put a low price on their spare time.
There ain’t no such thing as free time (TANSTAFT). It’s our only unrenewable resource. We should allocate it wisely.
If Americans had skipped “The Tonight Show with Johnny Carson,” had gone to sleep 90 minutes early, and had gotten up 90 minutes earlier to work on their businesses and careers, the American economy would have grown by an extra 10 percent per year — minimum — for three decades. The Tonight Show was expensive. I can hear Ed McMahon. “How expensive was it?” I can hear Carson: “It was so expensive that. . . .” I just can’t think of anything funny.
Television is a time-sucking monster. It should be treated as an addictive drug.
If you have a problem with money on the expenditure side, you need help with budgeting and self-control.
If you have a problem with money on the income side, start managing your time better. You are letting time dribble away. Time is money.
In the time-money trade-off, the ignored issue is time-preference. It’s about how you value the future in comparison with the present.
We all value the present more highly than the future because we live in the present. But some people value the future more highly than others do. They are future- oriented. If there is one characteristic that marks the highly successful person, it is high future orientation.
Harvard’s political scientist Edward Banfield a generation ago called this outlook the upper-class mentality. Class position has more to do with a person’s outlook on time than the amount of money in his bank account. Present-oriented people are lower class. Economist Ludwig von Mises called this orientation high time-preference.
Three features mark present-oriented, lower-class cultures and societies: high interest rates, high illegitimacy rates, and low economic growth rates.
So, your lack of money is not your biggest problem. Look elsewhere.
INSUFFICIENT EDUCATION
You don’t have a college degree. Or you don’t have a master’s degree. You don’t have a license. You don’t have a certificate.
You are like the scarecrow in the Wizard of Oz before the witch was dead.
In the good old days, there were fewer degree-granting institutions. The result was greater legal freedom to enter a new field. Only a few fields were closed to outsiders by degree requirements: the ministry, law, and medicine. This exclusion began early: the twelfth century for ministry and law. It took longer for medicine.
Today, the main barriers to entry are institutional: formal certification by one or another government-licensed trade monopoly. Call it restraint of trade.
But because the screening system is widespread, there are lots of loopholes. If you can’t get into one school, you can get into another. Decade by decade, the minimal performance standard moves ever lower in almost every field.
In very few fields is an above-average IQ the primary screening factor: nuclear physics, chemistry, and a few other narrow professions. In most fields, the ability to endure years of mental drudgery is primary.
Money is not necessarily the main barrier. Ignorance of alternatives is. It is possible to earn a bachelor’s degree in four years for under $11 per hour on a part-time basis. But not many people know this. They needlessly pay retail for college.
http://www.LowestCostColleges.com
If you are willing to give up television for four years, you can get through most of the hoops that bar your upward move. But most people are unwilling to do this after age 25. That is their barrier to entry. It need not be yours.
If you lack certification, you can get it. The cost is mainly time. Blame something else.
INSUFFICIENT SELF-CONFIDENCE
I think this is the biggest single restraining factor in most people’s careers.
People tend to assume that they have a minimal competitive advantage. They think, “Everyone knows what I know.” They do not recognize the nature of specialized knowledge. They assume that knowledge is widely shared. Access to knowledge in a free society is widespread. The Web has made it even more widespread. But a specific aptitude isn’t. Specific experience isn’t.
Employers pay for specific performance that enables the company to produce whatever it is that specific consumers want to buy at specific prices.
What is your specific advantage? You have one. If you didn’t, you would be working at the counter of a fast food restaurant. You would by pressing illustrated buttons on a computerized cash register. The cash register would make change.
“Anyone can do what I do.” This is not true. Hardly anyone can do it. Even fewer can do it better than you can.
If you were to put in an extra two hours a day on learning how to do it better, you would gain a far greater advantage within three years. But there is a better way.
Most people are more comfortable burrowing deeper into their niche than they are learning how to market their skills. They focus on polishing what they already know. They do not learn the techniques of broadening the market for what they already know.
This is why so few people climb to the top of their field. They become technicians. There is a market for technicians, but employers know that technicians have tunnel vision, especially regarding employment opportunities elsewhere. Even if technicians have knowledge of the market outside corporate headquarters, they lack the knowledge of how to exploit this demand for their own advantage.
Because technicians lack self-marketing skills, they are fearful of being cut off from the umbilical cord of a predictable paycheck — predictable as long as the company doesn’t go under or get swallowed up in a merger.
People lack self-confidence because they lack the following: (1) knowledge of the job market; (2) knowledge of how the techniques for increasing demand for their specific skills; (3) knowledge of what motivates consumers; (4) knowledge of where to start learning what they don’t know. All of this adds up to a lack of self-confidence.
Start working on this. It is probably your #1 problem.
But how? By dealing with subordinate problems.
INSUFFICIENT COURAGE
We speak of having the courage of our convictions. The courage of most employees is minimal because their convictions are minimal. They think: “I’m mediocre. Safety first.”
In my first full-time job, I saw the handwriting on the wall within months of being hired. The pay was never going to be great, although it was the best offer I had. In the region where I lived, wages were high. I was going to fall behind if I stayed.
The job demanded little, but it offered only one path to advancement: replacing the boss. The boss said he was going to stay on until he died, which he did a dozen years later. I knew I had to get out.
I spent a year trying to find a way to get out.
I eventually found a way. That escape hatch proved to be a mirage. I quit again, with no alternative employment. I immediately got another offer. It turned out to be more of a dead end than the first job, but it allowed me to launch my newsletter, “Remnant Review,” which I still publish. “Remnant Review” was my life preserver. Its income let me take more chances. I did not spend it. I saved it.
By the end of the decade, I was making twenty times what I had made when I began. But the pace was faster, and the risk was greater.
If I had kept that initial job, you would not be reading this. I would also not be rich. I would not have written 40+ books. (Ten, maybe.) However, I might not have white hair.
When you perceive that you are facing a dead end, start looking for an off-ramp. If necessary, drive off the highway and go looking for an on-ramp on another highway.
If you can stay on the dead-end road long enough to find a paved off-ramp, that’s best. But it’s not always possible.
I did not leave my first job in search of wealth. I left it in search of significance. I knew I was in a cocoon. Butterflies want to get out. I had spent too many years in graduate school as a caterpillar. It was time to break free.
Most people are unwilling to break free. This is why they become contented with a caterpillar’s life. But they see the sky and long to fly.
Are you afraid of heights? Look for a landing pad close to your cocoon.
INSUFFICIENT MOTIVATION
Motivation is internal. It is based on an internal assessment of external conditions. You compare where you are with where you could be, given your skills and opportunities.
At the beginning of a career, most people don’t know their limitations. Most people think they are more limited than they really are. What they lack is experience. This is why the military requires boot camp. It is also why it has ranks. Within the ranks are significant barriers: non- commissioned vs. commissioned officers, captain vs. major, full colonel vs. brigadier general. To get beyond each barrier, men must abandon their comfort zone.
The tyranny of the comfort zone is mild but ruthless. Beware the comfort zone.
The most effective period for breaking through a military career barrier is during a war. The enemy produces holes in the chain of command. It is easier to become an officer in wartime than in peacetime. You get promoted if you survive. There is a lot of motivation to survive.
Profit-generating employees rise rapidly in a company that is facing tough competition. College degrees count for less than black ink. It is when market competition is replaced by government licensing that advancement depends on certification.
People say, “I want to be successful.” Yes, they do: at zero price. They want success on their terms, not the market’s terms.
When people say, “I want to be successful, even if it costs me everything I own,” they are serious about success.
Most people are somewhere in between.
Where are you?
If your goal in the future is big enough (external), and if you don’t discount the future steeply (internal), then you are likely to be highly motivated. If your present array of talents and capital is minimal (external), but you are emotionally committed to achieving your goal (internal), then you are highly motivated.
It is problematical to say that positive internal motivation will overcome external circumstances in most cases. Frankly, I suspect that it won’t. But this kind of internal/external motivation ratio is a common characteristic of people who are successful. I see it as analogous to running the race. Most competitors don’t win, but all would-be winners must run.
The main inhibiting factors are these: (1) a minimal goal; (2) minimal capital; (3) high time-preference. In such circumstances, a lack of courage, money, and self- confidence produce paralysis.
I think most people who are not internally driven to achieve a significant goal blame their failure to achieve much on their lack of capital. What is inherently an internal problem is blamed on external circumstances.
When people are not highly motivated, the other inhibiting factors take over.
It boils down to this:
What do you want to achieve?How long will you work to achieve it?What are you willing to pay?The larger the goal, the more the effort is required and the more time is required to compensate for minimal capital.
I believe from my observations that capital is less important than the size of the goal, unless a person is close to the end of his career. Yet even here, no one knows for sure. Ludwig von Mises arrived in the United States as a refugee, almost penniless, in 1941 at the age of 60. Over the next quarter century, he established his reputation here, although it never matched his reputation in Europe in 1930 during his lifetime. Today, a generation after his death, he is better known than he was in 1930.
www.mises.org
CONCLUSION
Something is holding you back. The question is: How can you overcome the premier inhibiting factor in your life?
It would not be a bad idea to spend the weekend reassessing your capital, your top goal, and the time you probably have remaining to you.
How steep a discount do you apply to your goal? The lower the discount, the more likely you can achieve that goal.
Think back to your decision to get married. Talk about a leap in the dark! How much money did you have? How much education? Not much. But you were highly motivated. You were self-confident — just this once. You showed courage — just this once.
Considering the permanence of that decision, and the high cost of escaping from it, career decisions are minor. Yet men seem paralyzed when facing a career change. They prefer to burrow deeper into their niches if they are willing to do anything extra at all. Worse, they bide their time. This used to be called punching the clock. They inserted a time card into the clock, which stamped the card. The card recorded their physical arrival and departure.
Their mental departure took place long before they stopped punching the clock.
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