Gradually, then suddenly
There’s a passage in Ernest Hemingway’s novel The Sun Also Rises in which a character named Mike is asked how he went bankrupt. “Two ways,” he answers, “Gradually, then suddenly.”
That quote popped out of something I read a couple of months ago and it really made me think. And the more I thought, the more those three words explained so much. In such a simple and profound way.
Let me count the ways
It took a couple of centuries or so of consumption and innovating solutions and technologies — mass production, cars, airplanes, air conditioning, semiconductors, computers, unsustainable agriculture — all seriously fooling with Mother Nature (and, we were well-warned) until once-in-a-hundred year firestorms, droughts, hurricanes, floods, tornados, heat domes, and other terrifying climate events suddenly became the norm. Gradually, then suddenly.
We know we’re not supposed to smoke or drink too much, do drugs, eat food that’s bad for us, or be sedentary. But along the way, as the effects are compounding in our bodies, we feel ok. We can still run that 10k or hit the surf and catch some waves. Until one day we can’t. One day we’re unable to breathe, or walk, or to unjumble thoughts or remember simple things. Gradually, then suddenly.
Think of how the impact of technology in our daily lives snuck up on us. From punchcards fed into massive machines, to semiconductors, the World Wide Web, personal computers, wifi, the internet of things, social media, big data, AI. In an instant, the very way we live was dizzyingly changed — how and where we work, how and where we interact, how and where we spend our time, how and where we consume. Gradually, then suddenly.
Nowhere is this truth more eye-popping than in the principle of compounding in growing our money. You know the drill: start saving and investing when we’re young. Do it consistently. Be patient. Then retire in comfort. (And we don’t even need to save a whole lot or earn outsized returns to make this happen). Along the way, though, it’s excruciating. It looks like nothing’s happening or will ever happen, or worse, our nest egg gets slashed by half in a nasty recession. Morgan Housel, in The Psychology of Money*, says we often overlook the key driver of financial success: time. And a steely resolve to never interrupt the compounding process: endurance. If we behave ourselves, after 20 or 30 years (and even more so after 40 or 50 years), the exponential magic always happens. It’s iron-clad. Gradually, then suddenly.
And this compounding effect in all these scenarios applies to our relationships, mastering (or not) the hobbies we’re passionate about, or the work we pursue, and so much more. Gradually, then suddenly.
Blame prognostic myopia
Justin Gregg tells us in If Nietzsche Were a Narwhal, in which he compares human and animal intelligence, that “prognostic myopia” is to blame for our human-made whack-a-moles. He calls it “the most dangerous flaw in human thinking. An extinction level threat.”
It’s basically this. We have the intelligence, the capacity to solve problems in extraordinary ways: electricity, cars, planes, air conditioning, plastic, technology. Yet, even when we realize the future calamity of our brilliance, which we don’t always do, we live the knowing-doing gap. “Our minds are not wired to truly care about these consequences in a way we would if the consequences were more immediate.” Our biology focuses us on the here and now.
We can intellectualize the environmental cost of that banana in our fruit bowl, yet our circuitry doesn’t compel us to act because there isn’t an immediate consequence. We can intellectualize the power of compounding and know it to be true. But our fear during a market fall, the allure of that new Tesla, or the upside of a risky investment overpowers our ability to stay the course. A friend who worked as a behavioral economist at Fidelity once asked me to guess what their best performing portfolios were. I couldn’t. They were the accounts of people who had passed away only Fidelity didn’t know it. The dearly departed couldn’t sell out in reaction to a nest egg decline, cash out to buy a boat, or succumb to a get-rich-quick scheme.. The money just sat there doing what patient money does when it rides the ups and downs over the long-term.
Begin again
A quick google search reveals that we make on the order of 35,000 decisions a day. All of those decisions we’ve made up until now brought us here — in our own lives, and en masse.
If you’ve somehow put those decisions to work for your future health and well-being and the good of our future planet and society, you get to keep compounding those decisions. If you’re like the rest of us, there are 35,000 new opportunities each day to do just a little better. And the power of the pause is our friend. In that pause, we can take just a moment to think a little harder about the consequences of what we’re about to do, and try to connect our senses to the outcomes.
Remember what your mom used to call after you as you ran out the door to school: “Make good choices!”