We've seen this advice all the time to think out of the box. However, we've been in the box for so long throughout our entire lives, specializing in what we do best. Now, didn't the great investor Warren Buffett said that we should focus within our circle of competence and don't stray too far from it? I don't think there's much difference between a circle and a square when we're talking about such things. So, should we specialize within our box of competence or shall we stray from it?
I think instead of thinking out of the box, how about we grow the box? We still do what we do best within our area of expertise, but we take potshots at new materials, take them, form new connections and grow our box bigger. By doing so, we have a base area where we're already good at, but we incorporate new materials and expand outwards. This is differently from getting out of what you're doing and coming up with totally new ideas. Being creative is to come up with new ideas, but I think more importantly, it's coming up with new relationship between existing ideas.
I think that's why it's important to read widely, instead of just deeply. You're building the supports in order to build the interconnecting beams across them, so that the structure will be robust. I think that if you want to learn more about finances, it's important not only to read finance books and also other genre and then you try to link the connection. That's exactly how our memory functions in our brain - we grow our synapses and the interconnection between brain cells.
I will give some examples of how, in my contorted mind, I tried to link seemingly unrelated topics to derive some new insights about existing ones:
1. In music theory, there are silence intervals called rest. In order for a piece of music to sound nice, there must be periods of silence interwoven in that piece. I think likewise, when you're conversing with others, it's important to have 'rest' in between the 'notes'. It's important to have planned silence when talking to emphasize certain points or create certain effect. This is to make the music of a presentation much nicer. How about in relationships? Should there be a rest between the crescendo and the diminuendo? There is a value in silence.
2. In accounting theory, for every debit, there is an equal entry on the credit side of the balance sheet. It does show that for every good thing, there's a cost to it. When someone gives you something good, there'll be a need to reciprocate that, otherwise the relationship balance sheet won't be balanced. In fact, that's the basis of a relationship - give and take. You can't just take and take or give and give, the whole balance sheet will be upset. Now imagine between any relationship, there is an invisible balance sheet - so how are you going to make it work?
3. In engineering theory, you use the margin of safety to overestimate bad things and underestimate good things. Combined with cost-effectiveness, you derive an optimized solution to situations. There are no perfect answers, just how you want to balance things up. I use it all the time to budget big ticket items and my ability to save for them. Engineering is the art of applying existing theories to practical situations to obtain an optimized solution.
4. In science, you learn about the scientific method of observation, hypothesis and experimentation with independent variable to prove or disprove the hypothesis. When my computer hangs, I'll do the same method for fault finding. If just before it hung up on me, I've installed a new hardware, I'll try removing it first and test the hypothesis that this new hardware is the thing that causes it. I'll be careful to change one variable at a time to observe one factor at a time. This can be used to finetune investment and TA strategies too. Change stepwise to observe before jumping the whole ship in.
5. In air rifle (I was the school team for some years), I learned that in order to shoot accurately and consistently, the psyche is as important as the technical skills. Knowing what to do does not mean you can do it. Furthermore, the best way to perform at your peak is not to think that you're in a competition. I don't look at what others are shooting nor do I count how many bull's eye I had hit. I just keep on doing what I can control - focus on my breathing, ensuring that my rifle sight is aligned and try to sing myself a melody. Most importantly, I will try to forget that I'm even in a competition. I still remember all these whenever I'm required to perform under stress.
I think if I'd tried to come up with one new relationship between existing ideas everyday, it'll really allow my box to grow bigger.
I think that's why it's important to read widely, instead of just deeply. You're building the supports in order to build the interconnecting beams across them, so that the structure will be robust. I think that if you want to learn more about finances, it's important not only to read finance books and also other genre and then you try to link the connection. That's exactly how our memory functions in our brain - we grow our synapses and the interconnection between brain cells.
I will give some examples of how, in my contorted mind, I tried to link seemingly unrelated topics to derive some new insights about existing ones:
1. In music theory, there are silence intervals called rest. In order for a piece of music to sound nice, there must be periods of silence interwoven in that piece. I think likewise, when you're conversing with others, it's important to have 'rest' in between the 'notes'. It's important to have planned silence when talking to emphasize certain points or create certain effect. This is to make the music of a presentation much nicer. How about in relationships? Should there be a rest between the crescendo and the diminuendo? There is a value in silence.
2. In accounting theory, for every debit, there is an equal entry on the credit side of the balance sheet. It does show that for every good thing, there's a cost to it. When someone gives you something good, there'll be a need to reciprocate that, otherwise the relationship balance sheet won't be balanced. In fact, that's the basis of a relationship - give and take. You can't just take and take or give and give, the whole balance sheet will be upset. Now imagine between any relationship, there is an invisible balance sheet - so how are you going to make it work?
3. In engineering theory, you use the margin of safety to overestimate bad things and underestimate good things. Combined with cost-effectiveness, you derive an optimized solution to situations. There are no perfect answers, just how you want to balance things up. I use it all the time to budget big ticket items and my ability to save for them. Engineering is the art of applying existing theories to practical situations to obtain an optimized solution.
4. In science, you learn about the scientific method of observation, hypothesis and experimentation with independent variable to prove or disprove the hypothesis. When my computer hangs, I'll do the same method for fault finding. If just before it hung up on me, I've installed a new hardware, I'll try removing it first and test the hypothesis that this new hardware is the thing that causes it. I'll be careful to change one variable at a time to observe one factor at a time. This can be used to finetune investment and TA strategies too. Change stepwise to observe before jumping the whole ship in.
5. In air rifle (I was the school team for some years), I learned that in order to shoot accurately and consistently, the psyche is as important as the technical skills. Knowing what to do does not mean you can do it. Furthermore, the best way to perform at your peak is not to think that you're in a competition. I don't look at what others are shooting nor do I count how many bull's eye I had hit. I just keep on doing what I can control - focus on my breathing, ensuring that my rifle sight is aligned and try to sing myself a melody. Most importantly, I will try to forget that I'm even in a competition. I still remember all these whenever I'm required to perform under stress.
I think if I'd tried to come up with one new relationship between existing ideas everyday, it'll really allow my box to grow bigger.
