Minus the Minutia: the Power of Automation
by Clayton Daniel, Financial Commentator
Around twelve months ago I
surveyed some 25 – 40 year olds as to what they wanted out of life and what
they wanted to avoid. I expected the results to reflect everything I had ever
read about Gen X and Y wanting to be rich, retire early on a passive income,
kick up the heels or go travelling around the world. The results however did
not reflect that expectation.
Instead of early retirement,
people wanted job satisfaction. Instead of wanting more money,
people wanted more time. Instead of perpetual travel, people
wanted something to show for their hard work.
“[Baby boomers] were taught safety and security was
purchased with the ownership of assets…..we have now seen the concept of
ownership go from the domain of security, to the realm of responsibility”
I was amazed at the findings. Had
I been lied to, or had no one simply done what I had done – gone to the
demographic and asked? What I realised is that over the last twenty years, a
lot has changed. In fact, that is an understatement, everything has
changed.
The baby boomers grew up with
parents from a war torn era. They were taught safety and security was purchased
with the ownership of assets. And that’s what the baby boomers did. They
bought. From homes to cars to fancy appliances. Ownership guaranteed freedom.
“Ownership takes time, it takes hard work, and it
removes instant gratification”
Gen Y on the other hand have
grown up in an economy of uninterrupted growth for the last 25 years. Add in
the growth of technology, and the boom of the sharing economy, and we have seen
the concept of ownership go from the domain of security, to the realm of
responsibility. Why own a car when Uber can pick me up from anywhere and take
me to anywhere I want to go. I don’t have to find parking, I don’t have to own
a depreciating asset, I don’t even need to worry about sobriety. More
convenience for a lower cost, where do I sign?
“Our brain is not built to handle so many things
competing for our attention”
This idea of access over
ownership has been a massive shift in the way we interact with the world.
Ownership takes time, it takes hard work, and it removes instant gratification.
And there is so much to be
instantly gratified by these days. Whether you Tinder your way through the
weekend, Netflix binge your new favourite series, or stream a new album on
Spotify, whatever you want these days you can have it. Immediately.
The problem is, these new
services comes with a time cost. And despite the amazing complexity of our neo
cortex to create fully functioning and (mostly) rational humans, we still
haven’t outpaced our 200,000 year history. Put simply, our brain is not built
to handle so many things competing for our attention.
Even a couple of hundred years
ago it was simply:
a) Is there food?
b) Is there water?
c) Is there shelter?
If all three are checked, you
were good.
These days our tick boxes are a
lot more complex. Does your boss like you, did you choose the right career
path, and is there kale in your green smoothie?
“You adapt, and create shortcuts to get big results
from little changes. And my pro tip is automation”
Our brains are so exhausted by
these open loop questions, when you add on the fact we are working longer than
ever, and filling every other second we aren’t indulging our senses with a
social media hit, it’s no wonder some of us are feeling under the pump.
But this is modern day life, you
can’t avoid it. And saying ‘let’s go back to the old days when it was better’
is redundant advice. Instead you adapt, and create shortcuts to get big
results from little changes. And my pro tip is automation.
“Once we remove ourselves from needing to make
every single financial decision, we can free our minds up to focus on what we
should be giving attention to”
Research tells us all these
distractions and interruptions require us to make decisions every day. And each
of these decisions saps you of your ability to make good decisions. It’s called
decision fatigue and explains why over the course of a day, your decisions get
worse. Judges make worse decisions in the afternoon compared to the morning,
people buy useless extras at car dealerships, and we are susceptible to
‘impulse purchases’ at the checkout. Therefore, the lower amount of decisions
you make, the higher your ability to make good decisions.
“One of the best things you can do with your money
is to set it all up on automation”
So when the results of the survey
I conducted came back, I realised what people needed was a way to deal with
modern life. With so many things competing for your attention, how is it
possible to make the best decisions? What I found was the more decisions were
set to automation in the background, the better the results were for every
other part of life.
Once we remove ourselves from
needing to make every single financial decision, we can free our minds up to
focus on what we should be giving our attention to: performing better at our
jobs, making time with family, and finding new experiences.
“[Raiz] hits the spot on two fronts, access and
automation”
After implementing this theory
for a few years and seeing the results, I am convinced; one of the best
things you can do with your money is to set it all up on automation. I
don’t know when my rent is paid, how much I have for my next holiday to New
York in August, or whether my long term asset base is getting larger, all I
know is it is. Why? I don’t control it. It’s all on automation.
In no small way, this is why Raiz
has been as successful as it has been. It hits the spot on two fronts, access
and automation. It’s easy for me to see my investments as I can access them
right on my phone, and secondly I don’t have to do anything, the money is
deposited into my account with every purchase. For more information on Raiz fees, click here.For more information on Raiz fees, click here.
Avoid decision fatigue and
outsource to automation. Go spend your time on things that matter.
Clayton Daniel, Financial Commentator
You can start using Raiz at any time by clicking this link!
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