- Richard Meadows
Optionality is the right, but not obligation, to take an action.
Restrict Your Choices
Consumer capitalism is designed to give us the illusion of great choice, even while it traps us within one narrow sector of possibilities.
By restricting your choices along one dimension, you can create more freedom along a dimension that’s more important to you. Example of choices to restrict include:
- The clothes your wear every day
- The food you eat every day
Generate Better Options
Generating better options is much more important than being a perfect decision-maker. The single most important ways to open up options in life are (a) having more money, and (b) requiring less of it. This is why frugality is so important.
Money, however, is only valuable so long as it continues to open up options: after some point, it isn’t.
Frugality does not equate to acting dead.
Are you spending as little money as possible? Are you escaping work? These are all things that your dead grandpa already has you beat. A good litmus test for acting dead is inverting the advice, and see if it still sounds wise.
We can classify options based on their risk-reward ratio:
- Bottomless Pits of Doom: High risk, low reward. E.g. driving motorcycles has little reward over cars, but the fatality rate is much higher
- Dead Ends: Modest risk, modest reward. E.g. buying stocks. This leads to modest gains, in exchange for taking modest risk.
- Treasure Chests: Low risk, high reward. E.g. scalable side-hustles: selling software over and over again with little marginal cost.