2024 — The year of becoming comfortable with Complexity
“The only way to know how a complex system will behave-after you modify it-is to modify it and see how it behaves.” — George E. P. Box
This year too, I wrote a number of blogs on making better decisions. In previous years, I wrote a lot more on the specific areas such as career advancement and building financial wealth. This year, I wrote more on the factors that make decisions “better”. This was not by design. In my writing, I generally reflect on my travails in improving my own decisions. Last year, I found myself in quite a dark-ish and deep-ish tunnel and my conviction was tested thoroughly — not surprisingly, I wrote on topics related to holding conviction. Green shoots from the second half of last year have taken root and started to grow this year — as if reflecting that, I wrote a lot more on growth this year.
“Education is the backbone of progress.” — Sardar Vallabhbhai Patel
I read a number of books this year too — I covered them in this blog (here). Reading continues to be one of my most cherished privileges. Much of progress this year has to do with what I learnt and applied from these readings. For a few years now, reading has not been for the joy of escaping the daily grind. Instead, it has become a highway for education. In a sense, this is disappointing because I don’t, any more, read delectable fiction from authors such as Amitav Ghosh.
So, what are the highlights of the year?
Personal
“Rivers know this: there is no hurry. We shall get there some day.” ― A.A. Milne, Winnie-the-Pooh
My wife and I have become half empty nesters. Our elder child flew off the nest. She is living on her own in a different city. I do believe that college life is glorious and friendships made during this phase tend to pass the test of time. One tends to be iconoclastic, socialist and even somewhat of a communist. College students generally can’t tolerate unfairness but they also tend to confuse “equity” with “equality”. Confusion one moment and confidence, another. One enters college as a child and exits as an adult. I can see that our child is in the very early days of becoming an adult.
The meniscus injury on my left knee degenerated into a complex tear (the radiologist described it as a tear along two different axes and hence complex). As a result, my running has come to a complete halt — I am finally able to do brisk walks though. Also, I am back to my usual quota of strength and flexibility sessions.
We had to deal with serious illness issues within our immediate and extended family. Consequently, our lifestyles were impinged for many months. Also, I had multiple reminders in the year that life is very uncertain (I lost a few close ones) and that it is important to live each day fully. So, I try to ensure that I am in no hurry, for, there is no destination anyway.
Professional
Someone recently asked me if I’m “FIRE” (Financially Independent and Retired Early). My automatic response to him was that I was surely “RE” but not “FI” yet.
“If you’re going to invest in stocks for the long term, or real estate, of course, there are going to be periods when there’s a lot of agony and other periods when there’s a boom. I think you just have to learn to live through them” — Charlie Munger
It has been three and a half years since the last time that I drew any active income. I was quite nervous in the first two years — I stumbled more than rose up. My investments also went for a toss. My equity/stock portfolio fell 35% in 2022 and went up 6% in 2023. But 2024 turned out to be a much better year — my stock portfolio returned over 90%. Given the cyclical nature of investments in stock markets, I am expecting a serious fall in my investment portfolio — whether in 2025 or later, I do not know but fall, it surely will.
So, while I have come closer to financial independence, I do not see any robustness in my current position. Barring any black swan events, I am perhaps 4–5 years (or longer?) away from a relatively robust state of financial independence. While my family’s frugal yet comfortable lifestyle is a big contributor to our FI journey, learning-to-contend-with-complexity is rapidly becoming the most important contributor. In the last couple of years, I formed a fundamental belief that being able to navigate complexity is an imperative for a great life, however you define “great”.
Here are few things I learnt about Complexity
“The way to build a complex system that works is to build it from very simple systems that work.” — Kevin Kelly
We deal with complexity in almost every area of life. It is very hard to navigate complexity mainly because we do not have natural intuition for the methods of successful navigation — at least that is what I have seen. I have realized that complexity, however, bestows a great advantage upon anyone who is willing to learn to deal with it. In complex systems, it is almost impossible to force “extraordinary” outcomes. It is, however, entirely possible and also relatively simpler to “attract” extraordinary outcomes. The usual disclaimer applies though: simple does not mean easy.
Importantly, there are no hacks or short cuts. One cannot get around putting in the hard work; results take time too. Results materialize as a consequence of “work” and “luck” (“randomness”/”God’s grace” etc). Navigating Complex systems is about turning luck to your favour (attracting luck).
As I was learning and incorporating ways to navigate complexity, I captured them in various blogs throughout the year. Click here to learn the basic premise of complex adaptive systems.
Pertinent learning bytes
Goal of planning is to determine meaningful actions of today — not to predict future
Accounting for possible consequences over forcing favourable forecasts
Objectives over goals
Margin of safety over optimization
Right habits over “heroic” efforts — heroism is best left to the movies
Being fit and lazy
Playing games where you have an edge
By operating at the edge of chaos, we tend to get lucky
No formula for success — effects generally result from non-linear, indirect and discontinuous causes
Experts fail often too
Value of being both a generalist and a specialist
“Hacks” come in the way of building a “compounding” mindset
Life surely is not a puzzle to be solved; more likely, an unfolding journey to be experienced
For 2025
“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” — Albert Einstein
Since I had no goals for the year, 2024 was neither a success nor a failure. However, quality of life in 2024 was good — many challenging times which gave meaning to life and some real progress which gave hope for future.
I do not have any specific goals for next year. I do have hopes though: I hope that I get back to running and do at least one multi-day, strenuous trek in the mountains. I hope that I acquire the tenets of “General Semantics” (of Alfred Korzybsky) way of thinking and make them native to my thinking. Above all, I hope good health is bestowed upon all of us.
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