Author: David Alade (Page 7 of 15)

I am a student of the world. I learn, build and share.

You Can Invest Your Way Into Wealth

February 6, 2021 / David Alade

Wealth is never gotten overnight and the want of overnight wealth is the root of all evils. Evils hiding under greed, fear and lack of contentment.

Investing is a game of wealth accumulation not that of income generation, at least not in the short term. When you invest you are betting that the future will be better than today. Not two weeks will be better than today, no. It’s that ten years will be better than today. Two weeks can carry a lot of disaster with it, but in ten years, even if there were disasters, it won’t matter because we would have had significant progress.

In a previous article, I wrote that investing won’t solve your income problem. Here’s like a sequel to say, investing will solve your wealth problem.

Anybody can build wealth from the habit of investing. And your income doesn’t matter here. Of course, it will matter when you are defining wealth for yourself. You can’t earn $100 per month in 40 years working career and expect to have accumulated a wealth of $1m.

So while investing will bring wealth to anyone, we still have to define that wealth within the threshold of someone’s lifetime income.

Investing your way into wealth

Investing is a way to put your savings (the difference between what you earn and what you spend) into work for you.

Do it for a long enough time, and you will make wealth. Yes, you will make wealth because assets that you are investing in will grow in value and your wealth will grow as they grow.

You don’t need to have the best of knowledge before you can invest. I wrote about how doing that investment with Risevest can be the best option for you. And I’ve also written about how buying simple ETFs can be a viable option. Both of which I am doing for myself by the way.

What I’ve not shared on this blog is the power of compounding as you build wealth.

S&P 500, an index that tracks the top 500 companies in the US have returned about 10% per year on average in 50 years. If you managed to invest just $100 per month for your 30 years of a working career, you would end up with a net worth of $200k. And as I noted in the tweet below, that might be just more than enough for anyone out of developing countries to maintain an upper-middle-class lifestyle.

https://twitter.com/DavidAlade__/status/1357439181253926912?s=20

Even though all that you were able to contribute in your entire working life was $36,000, with the help of compounding, you were able to earn more than $170k in interest.

This is to show you that investing can help you build wealth but it cannot do it overnight. It is so interesting that if you choose to work just an extra 5 years, your net worth would grow to $340k within that short period of time. Yes, with time, everyone can build wealth.

On the hand, the first 10 years of investing your paltry $100 monthly cannot even move a needle. That’s why all who desire overnight wealth never get it and they are almost always parted with their money. Oftentimes, out of greed.

You must define your wealth

When we talk about wealth, the first thing that comes to a lot of people’s mind is the kind of Elon Musk or Jeff Bezos money. I’m sorry, very few people on earth will ever have that kind of money. Also, you don’t need that kind of money to be wealthy.

The beginning of your definition of wealth must start with contentment. Because wealth is not how much you have in your bank account or aggregate investment that you have but the difference between what you desire and what you have. Yes, if you desire a Richard Branson lifestyle, it doesn’t matter if you have $10m in your bank account, you will always be poor (albeit mentally). Someone with $1m may be richer than the one with $10m, it’s a matter of your desire and what you can afford.

I should mention lastly on this point that, you need not be able to afford everything that your eyes desire before you can be wealthy. As a matter of fact, only King Solomon has had that kind of wealth. Everything that his eyes desired, he gave to it. You know his conclusion; vanity. So please define your wealth.

While investing won’t solve your income problem, it can help you to build generational wealth.

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How To Buy Cryptocurrency P2P

February 5, 2021 / David Alade

Just like a lot of you, I have not bought any cryptocurrency in a p2p transaction before. All I do is use my Binance or Luno as the case may be. The argument for me is simple, buying on an exchange is frictionless and was a no brainer. However, with new regulations usually comes a new way of doing things. Today, a circulation prohibiting deposit money banks (the likes of UBA, Access, Zenith, etc.) from allowing the transfer of funds to cryptocurrency exchanges like Binance and Luno.

Well, as I said in a couple of tweets as a reaction to this new development, money is like water and it will always find its level. Also, the utility of crypto is so much that human nature will unavoidably innovate their way around the regulation.

I attempted doing a p2p transaction on Binance and I will quickly run you through how to do it in a simple step. Then we will become unstoppable.

When you log in to your Binance account, the first thing you want to do is change your payment currency. Click on the top icon that allows you to go to the settings, from settings, you will see payment currency. Change that payment currency to NGN, the default is usually USD. Once that is done, navigate back to the home page.

From the home page, click on P2P Trading. Binance currently supports only 6 cryptos for P2P transactions. All the 6 will be displayed immediately once you click on P2P Trading. Select the coin you want to buy and different offers as are available per time will be displayed for you. The choice is yours to select what you want to buy.

Once you select what you want to buy the next step is to confirm that this is what you are really interested in and you would be prompted on the payment method. Now, you would be required to select your preferred payment method from the list of options allowed by your counterparty.

With that done, you typically get a 15 mins time frame to complete the payment. Now something important here. Ensure your description doesn’t contain any cryptocurrency term if you want the payment to go through. Yes, it can be that serious. So use an alias instead. If you need to track it, you may need to use a consistent alias again and again. Just make sure not to use any crypto term.

Another caution, you only have the opportunity to cancel up to 3 transactions per day. Unfortunately for me, I didn’t know that and I exhausted mine on the first day of attempting p2p transactions.

The way it works is that once you make such payment to your transacting partner, the partner has to confirm that they received the money before the coin you are buying can be transferred to you. What happens when you transfer the money but the other party refuses to confirm it?

You have a place to Appeal. You will be required to submit supporting documents and state the issue you are appealing. It will be attended by the customer support personnel.

If everything goes as expected, which is usually the case, you will have your coin added to your wallet and you are good to go.

You can also use this video for a quick guide. Don’t be stopped on your journey to making wealth and preserving your wealth.

You Can’t Solve Your Income Problems With Investing

February 4, 2021 / David Alade

Invest $200 and earn 30% ROI in a year, you will feel two things. One, 30% in the scheme of things is a lot and you may even brag about it. Two, when you realise that a 30% ROI is mere $60, you become unsettled. Unsettled because your target towards financial freedom is $1m.

So you wonder, how soon will I get to $1m if all I can do is to earn $60 more on my $200 per year?

On the other hand, if you earn the same 30% on a capital of $100k, you can see the straight path to $1m. It is so straight line to you and it’s so nearby.

The same 30% different outcomes.

I have an extreme example that I like to use. “200% return on a $200 investment will still leave you with $600 in the end.” Now tell me, is it easy to make that 200% return and how many times you can make it.

When people are plagued with an income problem, the easiest place they run to is the world of investing. The thought is that by investing, they can escape their income problem. If anything, the illustrations so far would have taught you that it’s not possible. Income problems can’t be solved by investing. Investing a long term game of wealth accumulation through compounding.

We run to investing simply because it’s the easiest way out. By doing nothing at all, you can earn 30% more. Who doesn’t like that? We all want our money to work for us. It’s laziness subtly showing itself in us. We want free money that doesn’t require work. Yet, wealth is a two-way equation. It is an interplay between your income and the part of that income you invest in compounding assets.

I don’t think we are unaware of where income comes from or what we can do to increase our income. We know.

However, the thought of investing 3 months, 7 months or 12 months as the case may be in developing a new skill or a new income source doesn’t sit well with us. We want an immediate result. If you invest in the stock market today, you can wake tomorrow and your portfolio is up 10%. Free money from doing absolutely nothing is sweet.

But you can’t solve your income problem with investing. While the 200% ROI from above will still leave you with a paltry income, just 10% on some capital can take care of your year’s expenses. Give or take, having N100m and earning 10% ROI per year means N10m per year. For an average person, that’s more than enough to maintain an upper-middle-class lifestyle. Can you see the power of a robust capital base? And yes, the capital base comes from your income. Else, where will N100m come from?

When you have an income problem the best you can do is to focus on solving that. Don’t be lazy around looking for some 200% that won’t even change your life significantly. People with a large capital base don’t look for that kind of high returns because little is enough in the scheme of things.

Where income comes from

Income comes from value creation. You make money when you contribute value to society.

Value creation may be arranged in the form of corporate employment or self-employment. It doesn’t matter where it comes from as long as someone is ready to pay you for the value you are creating or created.

Income is a societal way of saying “this person has created this value to someone at a particular time, so they can also earn equivalent value from someone else.” Your income is a representation of the amount of value that society owes you.

When is it right to start investing then?

Immediately! Right now is the answer. The fact that 200% on $200 isn’t that much doesn’t mean you shouldn’t get it if it’s available.

Investing should start immediately for everyone. There’s a caveat though. If you have an income problem, don’t obsess too much on investing in assets. Let your priority be geared towards investment in yourself.

That statement implies that if you find an opportunity to invest in yourself with great ROI but that investment would require you to empty your stock or other investment accounts, do not hesitate. You want to transition your career to a more lucrative field and you realise that everyone in that field has done a course. However, doing it for you mean emptying your stock or any other investment account, please do not hesitate. Emptying it already indicates that you don’t have a lot there relative to where you are going. Make necessary sacrifices and you will be fine.

Again, you can’t invest your way out of an income problem.

There Is Wisdom In Investing With Risevest

February 3, 2021 / David Alade

Last year was the year a lot of us were first introduced to stock market investing. It was an awesome and advantageous year for those who invested as much as a little of their money.

It was a bull market where the price of almost everything is increasing. We were all smart and made good money. On Twitter, I see a lot posting some 100% gain on some individual stock. In my opinion, there’s no better time to be introduced to the market.

Beyond the gain from the stock market, converting your money to dollars alone is enough to make you about 30% ROI. That’s because Naira lost that much in value from last year.

Amid this endless opportunity to make money from investing, I had people messaging me about how they bought a stock and lost 30% or more of their capital. I felt bad for them and wished they didn’t lose the money but they did already.

So a bull market, a lot of people making money and some even losing money. Why should you then give up buying stocks yourself and subscribe to a Risevest plan?

PS: I am an independent writer and I’ve not been paid to write this.

The extra work may not worth it

Risevest’s ROI in 2020 was 41%. Yes, a whopping 41%. The implication of that is, without doing any extra work, without investing any extra hour to research, without spending the time for rest on your broker’s app, you could have conveniently made 41% ROI in 2020.

But is the extra work that you did worth it? Two things will help you answer that question correctly.

One, what ROI did you make on your portfolio last year? I’m not talking about ROI on an individual stock but on every stock that you bought (and probably sold) during the year. If that ROI is not up to 40% you may need to reconsider if you are good with what you are doing now or you would like to do something new. Let Risevest which is freely available to you be a benchmark. Also, while considering that, remember not to take for skill what is pure luck.

Two, if your goal of investing is beyond the return you make, then you may be fine. Even if you do not make up to the Risevest’s benchmark. I know this because 2017 when I started investing, my goal was beyond the money made. It included the education that comes with it, the emotion, the intellect, the mistakes and the wins. All added to me and have made me better today.

Otherwise, if all you are interested in is to focus on your work, and not have to disturb yourself about which stock to buy and which to sell, then going with a product like Risevest will be a great option.

Risvest ROI in context

It is not enough to use one year to judge Risevest as well and past performance is no way a guarantee of future performance. However, because they are an asset management company with a defined investment they may have a hedge over you. Also, unlike you, that is their day to day work. It is not justled with something else.

Yes, I cannot give them the pass mark just on one year’s performance. However, I am giving them merit based on the fact that they have a defined process, and it is their primary responsibility to make your money work for you. In order words, I can trust them enough to work to the best of their ability to make my money work for me while I focus on my primary which I enjoy or that is taking a lot from me already.

If you like ease and you don’t want to bother with which stock is trending or which is not, you may choose them and watch your money grow with them.

The 4 Horsemen Apocalypse Of The Stock Market

February 2, 2021 / David Alade

Fear, Greed, Hope and Ignorance are the 4 Apocalypse. Of the 4, the first 3 have to do with human emotions and they have together wiped out more wealth in the world of investing than any bear market had done in history.

The last one, ignorance has to do with the intellect. Ordinarily, it should be the only thing that causes us to lose wealth. Unfortunately, it is not even as harmful as emotion agents.

At the peak of GameStop’s fiasco last week, some people invested their life savings, some invested other people’s money, others their rent and the story goes on. As it would turn out, a lot of them were buying at the peak of the price. And now they have to painfully pay for it. Emotions ruled, greed prompted them to think they could make easy money and cash out, fear of missing out from the trendy was their guiding light and the hope that the price would rise again won’t free them from cutting their losses.

We are all subjected to these emotions, GameStop only came in as an example because of its recency. How many people bought Tesla for the same reason or Zoom or any other stock. How many have sold a stock because they couldn’t control their emotion or buy because emotion prompted them to?

Handling the apocalypse

Fear

Fear can drive us to either buy an asset or sell one. Fear of missing out will drive us to buy what you were not prepared to buy and fear of being in will force you to sell an asset you are supposed to hold. On both ends, knowledge and having an investment process will save you a lot. Knowledge about the asset in question and having a process about what to do when what happens is a saving grace.

I know emotion though, and I know we cannot always act according to reasoning from knowledge and process. So It may be wise to follow the process advised here.

Hope

Just like fear, hope works both sides of the market. You can hope that the price will fall further allowing you to buy at the bottom. Or you can hope that the price will rebound therefore holding your position instead of cutting your loss. Again, knowledge and process is your best solution here. Knowing what factors drive the value and paying attention to the behaviour of that factor is how you arm yourself with sufficient knowledge.

Here again, emotion will want to overpower you. My suggestion is that you note when you are being led by hope or by knowledge.

Greed

This is the father of all wealth destroyers. I will use an example of a trader here. If you are a trader, the most important skill you need to cultivate is to know when to take profit and move on. Ordinarily, you might have set that from the moment you enter your trade. But you see as your strike price approaches, the potential of getting more gains from the trade will entice you and you will adjust your analysis to accommodate your greed. That’s the beginning of failure. You see, we all want to make the maximum money from the market and this has cost a lot of us. Your goal as I’ve always said is not to make the maximum return in the market. Rather it is to make enough within your acceptable threshold or risk.

You will have to deal with your greed (and we all have it) to be able to control this horseman apocalypse who can turn your fortune into an overnight misery.

Ignorance

Ignorance should have been the cause of a lot of woes in the market unfortunately it’s not. However, it has its fair share of woes as well. A friend called me towards the middle of last year to lament how he has lost about 50% of what he invested in the stock market. How do you lose that much in a bull market? He’d bought stocks in an industry that was negatively affected by the pandemic. He was unaware. That’s the reason.

Ignorance can only be solved with knowledge. Get knowledge about whatever you are investing in and you will solve this easily. Remember the mantra, ‘never invest in anything you do not understand’. Well, that’s me saying it again.

2 years ago, I wrote here that the stock market can be as simple as buying and selling. However, what is most important is your motivation for buying and selling. Is it greed or fear or hope or ignorance for you? Be aware. The most optimal reason for your buy and sell of course would be knowledge.

Get knowledge, have a process, yield less to emotions and you will see your wealth grow with time. Fear, greed & hope have wiped out more money than any bear market in history.

Social Media Is A Wealth Creating Tool

February 1, 2021 / David Alade

I use Social Media as a tool because out of all wealth-creating machines since human existence, it is the first machine to be made available to everyone at a fraction of a cost.

Erstwhile it was Land and Capital both of which also needed “mass labour” to be applied to them to build wealth.

Now, social media is the leverage that offers an unfair advantage. However, what we are all lacking now is how to apply it.

You see, once a thing becomes commonplace, and access is evenly distributed, abuse becomes the common theme of such. It takes a witty mind to bring value out of a commonplace asset.

So it explains why a lot abuse it or don’t see its value.

If it was capital, because that is scarce, you tend to place lots of value on it. Same goes for land.

Social media gives one thing that I’ve addressed on a large scale in a thread that I titled “What The Internet Did”

I will touch a bit on it again.

Before that, let me quickly tell you not to be narrowly minded…

When I say wealth, I don’t mean money alone, sure money is part of it. But only a fraction of it.

Wealth of all kinds are a game of asymmetry (benefiting from fat tails).

What’s the meaning of that?

If you want a rich relationship, the good thing to do is to work on it to make big attempts to impress your girl/guy and to make them happy.

But it turns out more often than not that while the big things are good and must be done, what really makes your partner happy and impressed are in the little things you do that you don’t even count on. When you ask the other, that’s why you will be acclaimed for.

That doesn’t mean you shouldn’t do the big things, you should and if you don’t, it won’t be nice. But little things, in the end, added up, make the most important memories that strengthen the relationship.

Those little things are the asymmetry returns that I’m talking about.

Think about it sort of in terms of the Pareto principle of 80/20.

I will now talk about money because I know we all need that as well.

It is my opinion that when you don’t have money, to live a free life, the first thing to optimize for is that money. It gives you options

Same asymmetry returns are seen in the money as a fraction of wealth.

You will do all the work and more. But what launches you to plenty of money is the fat tail (the little things that you do).

The little thing can be just the 10% of your income that you save monthly and you allowed it to compound over the period. It could also be some side bets that you take on the side.

You may just help someone without even knowing and that will be the beginning of a life free from money issues or you build a thing that you never thought could sell and it sells like harmattan fire.

Asymmetry returns are what builds all sorts of wealth.

The thing about asymmetry returns (fat tails) is that you can bring yourself closer to it.

I mean that. I’ve seen it happen again and again.

Why do you think the rich keep getting richer and the poor keep getting poorer?

The rich are closer to asymmetries that position them to benefit from such than the poor. Even Jesus said from those who do not have we’ll take and give to those who do have. “Having” gets you closer to asymmetry returns.

Before now, “having” used to be constrained to land and capital. And those two things are very difficult to come by (I mean that). So it makes it difficult for the poor to have. The one major thing that “having” brings is its distribution power.

Distribution has ramifications.

The rich have a lot of capital, in effect, he can get a lot of things and all he needs to become richer is for one to two of those bets among 100 to give some asymmetry returns and the result is more wealth. That’s richer yet again. The poor can’t afford such a luxury. You can’t spread much.

What I’m talking about can also be explained by the power law in mathematics (check that out). Well, the game is usually stacked against the poor man from time immemorial. Social Media changed that.

Look at me for instance, my parents have no big money to hand over to me, so I have no capital endowment or land endowment, invariably, I can’t compound labour. But a time came in 2019 when I needed a new job. The one I was doing at the time, I got from social media to start with.

For the new job, even though no one knows my papa’s name, I just messaged a contact on social media that I needed a new job and specified which industry I wanted that to be. Less than 2 months later, I had a new job offer.

Growing up, what society taught me and you through stories and Nollywood was that only those with capital (the rich) can make such calls and they will have it done. Well, the machines of wealth now include a new thing; that’s the social capital through social media.

With the help of social media, I also could make such a call even without capital or land. How could I or the “rich” folks do that?

That’s the point of distribution that I mentioned earlier.

Capital gives you access to distribution that gets you closer to asymmetry returns. Social Media is doing that for me. It’s getting interesting now, don’t stop reading yet.

The currency of capital is money (more money means more distribution power). I don’t have that but I can still get a type of distribution. The currency of social media is VALUE.

Social media is a place that once you prove yourself as a person of value, distribution will be handed over to you. Let me explain.

The person I called for that job said something about me later on after that episode:

“…I spot your talent”

That’s the word.

You see because you have no capital (money) you need to give the world an alternative to be worthy of that distribution. Distribution for social media is simply a function of “how many people can spot your talent”

The more people who can spot it, the more distribution you get and the more wealth you can command. That’s the social media equation.

And let me tell you this, if that value is there, it will ALWAYS be spotted. I’ve done it on two social media platforms (LinkedIn & Twitter) and I got results. When you exhume Value on social media, what naturally happens is that those who can relate to your kind of value will gravitate towards you. The more people who gravitate towards you, the “wealthier” you become. That’s because those gravitations are people who have spotted your talent and can be called on at any time once you build the relationship.

Okay, I exclaimed lobatan (it is finished) when I saw a comment from someone as I was writing this. This is someone I added to my list of “those to meet.” I didn’t know he’s been “understanding how I think” (his comment on a post I made).

I should just stop writing this long explanation now. You should know by now that I know what I’m talking about. Social Media (Internet as the parent) is a leveller and the ultimate leverage.

How I Use Twitter – Beyond the surface

January 31, 2021 / David Alade

In part one of this article, I explained how my journey started with a series of unfollowing and then some deliberate following. In case you missed that, you should read it here.

It is not enough to follow. I also needed to know what I am looking from this people. Just as everything that I might talk about may not interest you, so will everything not interest me about a person. Beyond that, I was clear about how I will prioritize different information.

This is where I talk about all those.

Threads above Tweet

There are two kinds of thread on Twitter. You may not know.

Obvious threads that are woven together. This for example.
Threads like comments. This category is none obvious and you need to be a very curious person to unlock its power. In my opinion, it’s one of the treasure troves of Twitter.

Threads are like short articles. Except they being in a thread made them very easy to read on Twitter. That’s compared to having to click on a link that will take you out of Twitter. What I discovered was that people use thread to share their thoughts on a deeper level than a single tweet would do. Sometimes, those thoughts are spontaneous which in my opinion adds more ice on the cake.

So I learn more from reading threads than from scrolling through tweets. Many times, I equate reading threads to reading for that day. And yes, that’s what it is. I spend hours going through some threads and they’ve been incredibly helpful.

Now the second type of threads.

A lot of people don’t do this, but when you stumble on this kind of thread, you might just have discovered the most valuable curation of resources on the internet. It’s best explained with an example:

https://twitter.com/APompliano/status/1063797074964217856?s=20

Whenever questions like this are asked, the world gathers under such a thread to comment on the best of resources that are available out there. Utilizing threads like this have helped me to reduce the ratio of noise to signal whenever I’m reading. I always know that this is the best on this topic that I could find on the internet. I know this because I’ve contributed to some of the threads as well with the absolute best of what I have found on a topic.

You see, it’s all about being deliberate for me. Although I am still experimenting, I believe I’m yet to fully explore the ramifications of Twitter as I seek to create value.

Another example that is relevant here is what Dr Joe Abah is doing with #NaijaKnowledgeX. The thread is now a source of research for me on any topic that might have been raised.

Look for resource trove like that and keep it forever.

How I digest tweets

240 characters are more powerful than you may think. However, If you don’t think about it or read it in context, you may not understand.

To start with, remember I have my timeline well-curated. So relatively, I know what topic will show up on my timeline. This allows me to either get the idea of the tweet quickly or spark my curiosity as to why I don’t know something that I should know. In the latter case, I’d have to go down some rabbit hole to understand what they tweet is trying to say. The rabbit hole, by the way, starts with comments under the tweet where those who understand the tweet tend to share their understanding of what it is saying.

Sometimes, the comment is not sufficient. In such a case I will pick keywords from the tweet and do a google search for more resources to understand what I don’t get.

Some other times, I check their bio to see if they have a website that I can check to understand their background and how they think. And oftentimes, those that have a website may have picked their thoughts from an article on the site which solves the problem. I think my strength as you would have noticed is that I am never tired or bored of reading. Knowledge is always my priority.

Comment for context and understanding

There have been uncountable occasions when some would say something and I wouldn’t understand it. Here’s what I know, I’m not the only one that won’t understand. Secondly, more often than not, someone else would have attempted to explain the tweet either by retracing or even liking an article that explains it in the comment section.

I don’t just pass by if I’m curious. I click on the tweet to peruse the comment section for understanding. Often, I end up bookmarking the comment and not the tweet if it’s worth it.

You think it’s the person that said something that can teach you, well, it’s not always so.

Learn to explore the comment.

Mind My Business

Twitter is full of different drama. I hate chaos and that is freely distributed on Twitter daily. I stay away from it by not getting involved in any chaotic conversations. Especially when it’s on a topic where people have their identity tied to it. Topics like religion, politics, feminism, morals and basic dos and don’ts that requires a strong opinion.

I won’t comment on them or like them not to talk of RT.

I believe I don’t need to get involved in those conversations before I achieve my aim on Twitter. I am right. I simply mind my business and if I must engage in a conversation, I don’t criticize.

If I have a critical comment to make, I imagine how some of my tweets are basically just about me learning something new exploring an idea. So many times I excuse things. Beyond that though, who likes to be criticized in public? I just simply don’t want to add to that kind of conversation.

Occasions occur that I break that though. But that’s my principle on that. Lastly, join this:

https://twitter.com/DavidAlade__/status/1341478777327595522?s=20

That’s it in summary so far

You see, my life creed is that “if we can commit ourselves to reading and this increasing knowledge, only God can limit how far we can go in life.”

I’ve believed that statement since 2014 when I first stumbled on it and about 7 years down the line, I can tell you I am a living testimony of that. So when I came on Twitter, what I was just looking for is a new way to manifest my belive. of course, I had fun between all this. However, like Marcus Aurelius said in meditation:

“I have to go to work — as a human being. What do I have to complain of, if I’m going to do what I was born for — the things I was brought into the world to do? Or is this what I was created for? To huddle under the blankets and stay warm? So you were born to feel “nice”?

Instead of doing things and experiencing them? Don’t you see the plants, the birds, the ants and spiders and bees going about their individual tasks, putting the world in order, as best they can?

And you’re not willing to do your job as a human being? Why aren’t you running to do what your nature demands? You don’t love yourself enough. Or you’d love your nature too, and what it demands of you.”

How I Use Twitter – Who I Follow and More

January 30, 2021 / David Alade

As I cross 3,000 followers on Twitter today I am reflecting on the journey down here and the good tidings it has brought me. When I started using Twitter seriously, I thought I needed at least 10k followers before I could start to see its dividend. I was wrong. When I started, I had less than 300 followers and wondered how on earth can my voice be heard in this universe of 20 seconds expiring tweets. Then my last question was how will I always have something to say. As it will turn out, I appeared to have mastered a lot of things and got exciting dividends.

The journey from 300 to 3,000 was interesting, to say the least. So here’s not how I got the following but how I use Twitter.

First, I unfollowed

The first thing I did when I realized that I will be spending a lot of my hours on Twitter was to curate my fields. I couldn’t help it seeing all that I was seeing before then every day. It was either useless to me or toxic. I’ve always been the type that optimizes for knowledge. Anything less than knowledge is a waste of time if I will be spending that many hours. And that’s about 3hours daily on average.

So what does this curating my fields entails?

I started with unfollowing everyone that I do not understand why I was following them in the first place. Yes, for me then, if I can’t point to a reason why I followed you, I unfollowed immediately. Sometimes back, I’ve followed some people in a “follow for follow” request, they were the next I unfollowed after those I couldn’t tell why I followed them. How did I know them?

Here’s a thing I noticed on Twitter, those who do “follow me I follow you back” don’t have the kind of knowledge that I’m looking for on their timeline. And I don’t say this to diminish anyone. It is just an observation as it relates to what I am looking for. So all it took to figure out those to unfollow next was to check their timeline and I will be sure to not find anything other than some RTs and comments asking for a follow back. To be candid I wonder why the following matters to anyone if they are not offering some sort of value in return. Well, we are looking for different things.

The category of those that I unfollow goes on and I am still not done. I also unfollowed every corporate account that is not innovative in their engagement or that I have nothing to do with. I didn’t follow any influencer that doesn’t make me more intelligent. I don’t follow those with large followings already. Especially those who I can’t escape whatever they post whether I follow them or not. A good example of this is @dmuthuk. I like his content a lot and even though I don’t follow him, not a week goes by that I don’t see him on my timeline. By my estimation, if I follow him, I will be seeing too much of his content and I don’t want that. Yes, I am that deliberate. It’s the reason why I get better with every hour that I spend on Twitter.

You see, every follow you make on Twitter is a contract you are making for your thinking to be challenged. It is a contract for your life to be shaped. It is a contract you are making for you to be influenced. If that’s the case, you can as well choose to be deliberate about the kind of people that challenge your thoughts, shape your life and influence you.

Unfollowing is not enough, you have to deliberately follow as well. Some of my followers have told me things like they unfollowed everyone that they follow to follow everyone that I follow. There is brilliance in that. It took me about 6 months of aggressive curation to come up with my following. And I’m still working on it, improving with more following and more unfollowing.

For those who may want to follow those that I follow though, there’s a caution. It’s not the most effective way but I won’t dismiss its effectiveness. Like I mentioned earlier, every person I follow has a reason. Having such a reason for me is the height of optimization. You should get there.

Those who do that also do so because they want to have a sneak peek into my information digest. However, my following is not all. I have some more.

Using LIST on Twitter

We all fall for confirmation bias as human beings. We like opinions that amplify our own opinion. So we’d rather follow those who agree with us over those who challenge our thinking. Or even outrightly oppose us. I am no different but I find a balance.

Investment knowledge is a big topic for me and I have found a lot of brilliant people on Twitter on this topic. Following all of them would mean investing topic alone would take 90% of things that show up on my timeline. I consider that counterproductive and maybe even self indoctrination. So I only followed a few and created a list for every other that I found fascinating. Fascinating here doesn’t have to be that I agree with them nor they with me. Rather, it means a command of knowledge at what they do. Such LISTs (I have many of them) have helped me to maintain a diverse and more intelligent timeline.

If I’d allowed a 90% investment content on my timeline, I’d be given to 24/7 confirmation bias. Thinking that’s the only world that exists.

That’s not all about how I use LIST. I also use it for my research. The most recent list I created was done because I found a new love. After listening to Josh Wolfe conversations on a couple of Podcasts, I became fascinated by the subject of human progress. Such fascination is of course why I shared a tweet like this:

https://twitter.com/DavidAlade__/status/1352400810081202180?s=19

To sustain my interest and have an easy frame of reference, I started building a new list called “past and future”. Past and future is a list that has strictly people who are studying and sharing their ideas on how we got here (past). And people who are building technologies that could shape the future or those investing in it. It’s been an interesting list so far.

A lot of these lists are private so you can’t find them. LISTs are incredibly powerful. Those are just two ways I’ve unlocked their power that I thought I should share with you. I definitely have more.

But you see, while some are seeing Twitter just as another social media, I’ve simply used it in ways that you might not have thought off.

DMs

I keep my DM open so that I won’t have to follow anyone before they can send me DM. More importantly though so as to allow for serendipity. I believe at this stage of my Twitter life, locking my DM will be an obvious absurdity. A time may come (though I don’t see it happening) when I will lock it. For now, it’s forever opened so send me all those opportunities and send me the questions.

DM is an important feature of Twitter that unlocks opportunities. Closing it is just equal to closing the room to those opportunities as well.

Of course, this is about me. Remember it’s how I use Twitter not how you should use Twitter. I am not on the platform just to play away time. I’m on it to become a better person and for opportunities to locate me easily.

Read the second part – How I Use Twitter – Beyond The Surface

Biased Towards Monopoly

January 29, 2021 / David Alade

Winners-take-all is the language of the internet. In fact, it is often what serves the common good.

Google is the dominant search engine and Facebook serves more than 2 billion people to become an advertisement behemoth. As it is happening in the world of corporations, so is it happening in the world of creators. The top 1.5% on Spotify pull 90% of royalties, top 10 writers on Substack make $7m. The more you check the creator economy and the technology corporations, the more you see similar divides. A situation where the top 1% make approximately more than the bottom percentages.

I conclude after observing this narrative that this is a feature of the internet and not a bug. Since network effect is what drives a lot of the successes, plus the mimetic desire in humans, it’s only expected that such a pattern emerges.

Network effect means a system/phenomenon becomes more valuable with every additional user to the network. I will benefit more from WhatsApp if everyone that I know uses it. So will others who use it and the network will grow thereby to emerge as the winner that will take all. In the world of individual creators, this happens when a creation gains more approval based on the fact that it has gotten a lot reviews and say feedbacks.

Mimetic desire means we desire a thing once we realize that our neighbour has it or is demanding it as well. It’s the reason why social proof will help you sell more products/services than the service/product’s feature itself.

This is the way of the internet and it’s the reality that the creator in the gig economy must be made quickly aware of.

The internet is biased towards monopoly. It always optimizes for a winner-take-all. That’s not a bug though, but a feature of the internet. The way it makes up for that inherent ”weakness” is to give room for originality. The analogue world rewards conformity instead.

The Internet allows for originality

Li Jin said in a tweet, “all the things I loved doing while growing up that were dismissed as “wasting time” are now activities that have value.” When we were kids when there are a finite number of things that you can do to bring you money (representation of value). Today, almost anything imaginable that you can do and publish on the internet can bring you money. Times have changed and the demand problem that used to devalue those activities have been solved.

https://twitter.com/ljin18/status/1352131482932928512?s=20

The reason why those activities don’t have value then is that there is no demand for them. Anything that you can do that commands demand is a thing of value. Demand means someone is willing and able to pay for it.

Pre-internet, conformity is necessary because society has exhausted the threshold of craft possible. So you cannot produce a skit and expect to make a living from it. Even if you can, you may be discouraged because it’s not “noble”. Skits are even more feasible, playing video games used to be a time-wasting activity for example, but not anymore. As it stands now, there are a lot of video games streaming services that can help you turn your passion into a money generating activity. The number of things that you do to earn money now is a lot, since global demand has been unlocked. Anything now can be of value. How is this relevant?

This phenomenon implies that you can now be yourself without the need for conformity. You can do this and still give value to the world. As I noted in the thread referenced below, “In an ideal world of the internet, when you distribute anything, it is supposed to reach the current 4.5 billion people on the internet. Once it reaches them, you should get the ‘45,000’ people that will be able to connect with you and what you’ve created. Your audience is that ‘45,000’ spread across the world.” But pre-internet, there was no way your uniqueness could connect with those 45,000 people spread across geographies, hence, the need to confirm.

https://twitter.com/DavidAlade__/status/1234223798670561280?s=20

So the way the internet works now is that it doesn’t reward duplicity so much, you cannot be another Joe Rogan, there can only be one, and that one has been abundantly rewarded. You cannot be another Naval. The more of yourself that you bring on the internet, the more unique you become on the internet and the greater your reward. Those who mimic get lost in the crowd.

Does that mean everyone can become the top 1%?

The simple answer is no. What you become from your craft will be a function of your uniqueness, relatable audience and tenacity. To be mathematical completely, I will add a “plus an error term (sometimes called luck).”

You see, even though what the internet reward is your uniqueness, which makes it hand over a monopoly to you, all monopolies are not the same. Some can bring you $100,000 a year and others may only give you $10,000 a year. Yet, as we’ve learned, a $1m a year is not impossible.

An honest question: what do you need to lead a comfortable and stress-free life? Maybe not an amount of that will bring you to the %. What some people need is some 1,000 true fans while 100 true fans will do for others.

The concept of true fans is to highlight to creators that to be successful, you don’t need millions of customers or millions of clients. You only need some true fans who believe in you and would pay for your services. The “1,000” concept is saying all you need is 1,000 true fans that would pay you $100/year. While “100” concept proposes to look for 100 true fans that would pay you $1,000/year. In both scenarios, the idea is that $100k per year is big enough a reward for any creator online. This number would anyone to the middle class in the richest countries comfortably. Of course, the numbers are only hypothetical and you can work out what is good for yourself. But to get those true fans, you will need to act in a way that will get you abundantly rewarded which is bringing your unique self into your creation.

The search for the true fans

Time Urban wrote a thread a month ago on how the interplay between what you create and how they translate to fans.

Here’s how he described it:

If you create art/content—songs, YouTube videos, articles, podcasts—think about people who come across your work as 4 categories of reactions:

1) Didn’t like it

2) Thought it was solid/fine

3) Really liked it

4) Absolutely loved it

1s and 2s are gone forever. 3s might come back. 4s will subscribe and evangelize your work to everyone they know. 4s are what make your work take off, not 3s. A piece of work that yields 4s at a 20% vs 5% rate probably ends up with probably 10X (or 1,000X) the spread.

The thing is, content that yields a lot of 4s also usually yields a lot of 1s—more 1s is the cost of going for more 4s. Likewise, creators trying to minimize 1s also usually minimize 4s. So it’s really two choices: the 1-4 strategy or the 2-3 strategy. 1-4 beats 2-3!

I like his methodical description of how the creator economy works. Like I noted above, it relies on network effect and mimetic desire in humans. 4s are those who would compel mimetic tendencies. They are the initial true fans and the evangelists. And because they like your content or art, more people from other groups of the divide would find a reason to like it as well. Sure, not all will end up liking but enough for you to make your life comfortable and venture profitable.

And yes, to get them, you will have to choose an interplay between your various forms of content/art.

Largely, the internet is some beautiful tool that we have now. Never before have we had access to so large a pull of demand that each of can tap into with our originality. And never before has monetizing our originality been this easy.

So we are all individually left to maximize the advantage that is in our hands.

Money Is Whatever We Believe It To Be

January 28, 2021 / David Alade

As I study the history of money and how we got here I am lost in awe of how interesting the journey has been.

Yes, this is an article about the history of money that was not taught in class. It is relevant for our understanding of where we might be headed next.

In case you don’t know, money has not always been the note we carry around today. It has not always been fiat. We’ve moved from stones (yes that’s not a mistake) to seashells and from one form precious metal to another. It’s been a long journey down here and I want you to know that. I’m telling you this story not in any chronological order at all.

Rai Stones of the Yap Island

I picked Rai Stones first because it is one that most counters the idea of money as we know it today.

These stones were not native to Yap and we’re brought in from a neighbouring community of Palau or Guam. The beauty and rarity of the stones made them desirable and valuable to the Yapese. Procuring it was difficult because it involved a laborious process of quarrying and then shipping.

This feature of it, scarcity and the work required to get it made it become the way the Yapese transfer value among each other. That is, it’s their money.

And because of the size of the stone, they were usually placed in the public square. At the public square, the ownership of the stone is transferred through a public announcement. This was used for centuries if not millennia on the island until no more.

The Rai stone stopped being the way to exchange value when a business-minded man named O’Kafee flooded the island with different Rai Stones which he got for free and imported to the Yap Island. When scarcity is taken away from money, it stops being money.

Other forms of money

While the story of Yap Island is unique, historically, some other forms of money have also been used in the past.

Cows and Sheep – they were used around 9000BC as a unit or exchange. This was one of the first iterations of money after the era of a trade by barter. It was made possible because men started domesticating them and since they tend to share common characteristics.

Unlike trade by barter, you don’t have to locate someone else that needs your good. Cows can be easily exchanged. That’s it, and we had new money.

Seashells – they were widely used in Africa, Europe, and Asia. They are similar to today’s coin and might have also birthed the idea of coins that were later of bronze and copper.

Gold – this is still in use today but more as a store of value asset than as a currency.

Fiat – what we know as money. A dollar or Naira or Rupee bill. It’s been a journey to where we are now.

As you’ve seen from all these examples, money can be anything once society agrees that it is. Money of itself should not necessarily have any intrinsic value. Anything that we agreed upon to use as money becomes money. And it will interest you to know that you can have your form of money as long as someone else is willing and ready to accept from you what you have to offer in exchange for the value they will provide.

On a societal level though, for value exchange to be as frictionless as possible, a generally accepted form of money must emerge. That’s how we can all have a common language. And that’s why we are currently settled on USD and NGN and Rupee or anything your country might have agreed on.

When money is not scarce, it is no longer money

All through history, the reason why money has changed is that the former form of money stopped being scarce. Once it stops being scarce, it stops being a medium of exchange and won’t be able to store value. At that point, it definitely doesn’t matter again if it serves the unit of account function.

The reason why Rai stone stopped being money is that O’Kafee took away its scarcity from the island. He flooded the island with different Rai Stones and it crumbled.

Gold has been for ages and a lot more other innovation has come and gone. Yet, Gold remains today as something that can serve as money. Because people can’t easily make a lot of it.

Fiat on the other is just as scared as the government wants it to be now. And while it still serves as the mainstream money, its inherent flaw of infinite printability may become its fall.

Whatever may happen, the world will always find a way to move value across space and time.